Assignment
Question 1
"The inability to satisfy the demand for an item" is the definition of a
a. reorder point
b. stockout
c. lost sale
d. backorder
Question 2
For the single-period inventory model, solving for the optimal order quantity involves using
a. marginal economic analysis
b. total cost analysis
c. ABC analysis
d. reorder point analysis
Question 3
Inventory position is computed using all the following except
a. On-hand
b. Scheduled receipts
c. Backorders
d. Lead time demand
Question 4
Independent demand
a. can be derived/calculated
b. is related to other SKUs
c. is also called finished goods inventory
d. needs to be forecasted
Question 5
Demand that is stable over time is called ____.
a. Static
b. Dynamic
c. Stochastic
d. Deterministic
Question 6
Demand that varies over time is called ____.
a. Static
b. Dynamic
c. Stochastic
d. Deterministic
Question 7
Average inventory in the EOQ model is defined as
a. The order quantity divided by the number of inventory cycles per year
b. Annual usage divided by the number of inventory cycles per year
c. One-half the order quantity
d. One-half the annual usage
Question 8
Additional inventory kept over and above the average amount required to meet demand is called ____ inventory.
a. Seasonal
b. Work-in-process
c. Finished goods
d. Safety stock
Question 9
Backorders ____.
a. Result from lost sales
b. Have little financial impact
c. May occur as a result of a stockout
d. Force a customer to purchase elsewhere
Question 10
Costs associated with inspecting, unpacking and putting into storage incoming inventory are components of ____ cost.
a. Ordering or setup
b. Holding
c. Shortage
d. Unit
Question 11
Costs associated with backordering a product are called ____ costs.
a. Holding
b. Shortage
c. Ordering
d. Setup
Question 12
Which of the following is not a key assumption underlining the classic economic order quantity (EOQ) model?
a. The entire order quantity arrives in the inventory at one time
b. There are only two types of relevant costs: order/setup and inventory-holding
c. Demand is assumed to be stochastic
d. Stockouts are not allowed
Question 13
Inventory that represents partially completed products waiting further processing is called ____ inventory.
a. Raw materials
b. Work-in-process
c. Cycle
d. Safety stock
Question 14
Which is not an advantage of the periodic review system?
a. Helps to control "A" items
b. Inventory need not be monitored continually
c. Useful when a large number of items is ordered from the same supplier
d. Consolidated shipments lower freight costs
Question 15
Inventory that acts as a buffer between workstations in flow shops or departments in job shops is called ____ inventory.
a. Raw materials
b. Work-in-process
c. Cycle stock
d. Safety stock
Question 16
Setting order sizes and schedules for individual subassemblies and resources by week or day fits best with which level of the generic framework for resource planning?
a. Aggregate planning - Level 1
b. Disaggregation - Level 2
c. Execution - Level 3
d. Capacity requirements planning
Question 17
Capacity requirements are computed by multiplying the number of units scheduled for production at a work center by
a. The unit resource requirements minus the setup time
b. The unit resource requirements plus the setup time
c. The unit resource requirements and then adding in the setup time
d. The unit resource requirements and then sub-tracting the setup time
Question 18
If forecast demand exceeds the total factory or supply capacity, managers might simply decide not to meet forecast demand. This decision would most likely be made at which planning level?
a. Aggregate planning - Level 1
b. Disaggregation - Level 2
c. Execution - Level 3
d. Capacity requirements planning
Question 19
____ are the total demand for an item derived from all of its parents.
a. Planned order releases
b. Gross requirements
c. Scheduled receipts
d. Planned order receipts
Question 20
Which of the following is not an aggregate planning decision option?
a. Pricing and promotions
b. Subcontracting
c. Layoffs
d. Building a new plant
Question 21
Which lot sizing rule might base the order quantity on a standard-size container or pallet load?
a. Lot-for-Lot (LFL)
b. Fixed order quantity (FOQ)
c. Periodic order quantity (POQ)
d. Gross Requirements (GR)
Question 22
The Lot-for-Lot (LFL) rule
a. Minimizes purchase or setup costs
b. Allows the firm to take advantage of quantity discounts (price breaks) by suppliers
c. Is best applied when inventory carrying costs are high and setup/order costs are low
d. Masks the true nature of dependent demand
Question 23
Which lot sizing rule might use the EOQ calculation?
a. Lot for Lot (LFL)
b. Fixed order quantity (FOQ)
c. Periodic order quantity (POQ)
d. FOQ and POQ
Question 24
The words "product family," "budget allocation" and "long-term" fit best with which level of the generic framework for resource planning?
a. Aggregate - Level 1
b. Disaggregation - Level 2
c. Executing - Level 3
d. The MRP II Level
Question 25
The primary output of an MRP system is a time-phased report that gives all of the following except
a. The facilities managers a detailed schedule for acquiring additional factory space
b. The accounting and financial functions production information that drives cash flow, budgets, and financial needs
c. The production managers a detailed schedule for manufacturing the product and controlling manufacturing inventories
d. The purchasing department a schedule for obtaining raw material and purchased items
Question 26
Which lot sizing rule is best when inventory carrying costs are high and setup/order costs are low?
a. Lot for Lot (LFL)
b. Fixed order quantity (FOQ)
c. Periodic order quantity (POQ)
d. Gross Requirements (GR)
Question 27
A(n) ____ is a statement of how many finished items are to be produced and when they are to be produced.
a. Aggregate Plan
b. Master Production Schedule
c. Material Requirements Plan
d. Capacity Requirements Plan
Question 28
If a work center load report indicates insufficient capacity, options for correcting the problem include all of the following except
a. Revise the Bill-of-Materials
b. Change the Master Product Schedule
c. Subcontract
d. Transfer personnel between work centers
Question 29
Promotion of weekly discount airfares by an airline would be an example of ____.
a. Demand management
b. Production rate changes
c. Inventory changes
d. Facility, equipment, and transportation change
Question 30
The purpose of aggregate planning is to
a. Minimize the work force size
b. Maximize the production rate
c. Minimize the cost of meeting demand
d. Optimize the inventory level.