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Exam 9: Inventory Management Fundamentals and Independent Demand

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Question 41

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In fixed time period inventory models,inventory is reordered when it reaches a predetermined stock level.

A) True
B) False

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Question 42

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Inventory that has been received and is in the production phase is known as

A) raw material inventory.
B) work-in-process inventory.
C) make-to-stock inventory.
D) make-to-order inventory.

E) A) and C)
F) All of the above

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Question 43

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The EOQ inventory model helps determine the quantity to order to minimize costs.

Producing extra inventory during periods of low demand,which is then consumed during periods of high demand is known as

Because price isn't a factor in the EOQ formula,quantity discounts won't affect EOQ calculations.

In ABC inventory analysis,items that account for only up to 10% of the revenue but for a majority of the inventory items are classified as

In a continuous review inventory system,if daily usage is 20 units and lead-time is 5 days,the reorder point will be when on-hand inventory is

The order quantity at which total annualized inventory-related costs are minimized is known as the ________.

Inventory models that order in regular weekly or monthly time intervals are known as ________ models.

Inventory that is kept at the intersection of differing stages of production to maintain continuity of processing is called hedge inventory.

Products sent directly to customers and not placed in finished goods inventory are known as ________ inventory.

Inventory that is completed and placed into inventory for sale at a later date is known as ________ inventory.

Inventory turnover is the average inventory divided by total sales.

An inventory model that is used when product cannot be received at the full order quantity is known as the ________ inventory model.

The rate at which firms use up their inventory is known as economic inventory rate.

A repetitive procedure for counting inventory on a regular basis is known as ________.

Production smoothing is balancing the cost of set-ups with inventory carrying costs.

In managing inventory for independent demand items,the phrase "timing" refers to the decision query "when to place an order."

Inputs to production that take the form of either fundamental supplies or subassemblies and components received from suppliers are known as ________.

Use the information below to answer the following question(s) : The materials manager for a billiard ball maker must periodically place orders for resin,one of the raw materials used in producing billiard balls.She knows that manufacturing uses resin at a rate of 50 kilograms each day,and that it costs $.04 per day to carry a kilogram of resin in inventory.She also knows that the order costs for resin are $100 per order,and that the lead time for delivery is four (4) days.Assume 365 days in a year. -At what point should resin be reordered?