7

38 Questions | Total Attempts: 418

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7 - Quiz

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Questions and Answers
  • 1. 
    The Economic Manufacturing Quantity (EMQ) model relaxes which assumption of the classical EOQ model?
    • A. 

      Constant Demand

    • B. 

      Instantaneous Replenishment

    • C. 

      Constant Price

    • D. 

      Zero Safety Stock

  • 2. 
    An RFID system consists of:
    • A. 

      The code, band, writer, and reader

    • B. 

      The header, manager, object, and serial number

    • C. 

      The tag, reader, communication network, and software

    • D. 

      The standards, the equipment, the software, and the printer

  • 3. 
    When using the ABC Inventory Classification, A items typically account for about:
    • A. 

      80% of the annual dollar usage

    • B. 

      20% of the annual dollar usage

    • C. 

      80% of the items

    • D. 

      15% of the overstocked items

  • 4. 
    Which of the following is not an assumption of the basic economic order quantity model?
    • A. 

      Demand is known and constant

    • B. 

      Replenishments take place at the proper time

    • C. 

      Price is constant

    • D. 

      Order lead time is known and constant

  • 5. 
    The categories of inventory are raw materials, work-in-process, finished goods and _______.
    • A. 

      Anticipation inventories

    • B. 

      In-transit inventories

    • C. 

      Maintenance, repair and operating supplies

    • D. 

      Operating Items

  • 6. 
    Completed items ready for shipment are classified as:
    • A. 

      Product demand inventories

    • B. 

      Finished goods inventories

    • C. 

      Work in completion inventories

    • D. 

      MRO inventories

  • 7. 
    Use of the periodic review system is characterized by:
    • A. 

      Variable order quantities at constant time intervals.

    • B. 

      Constant order quantities at constant time intervals

    • C. 

      Variable order quantities at variable time intervals

    • D. 

      Constant order quantities at variable time intervals

  • 8. 
    Which of the following is not a dependent demand item?
    • A. 

      Hamburger buns at mcDonalds

    • B. 

      Service Parts at an auto shop

    • C. 

      Retail goods at a department store

    • D. 

      Raw materials at a manufacturer

  • 9. 
    The two types of RFID tag are:
    • A. 

      EPC and ISO

    • B. 

      Active and passive.

    • C. 

      Bar code and writeable

    • D. 

      Line of sight and radio signal

  • 10. 
    The quantity discount model is used when
    • A. 

      The purchase lead time varies.

    • B. 

      The EOQ is discounted

    • C. 

      The purchase price varies

    • D. 

      Demand varies over time

  • 11. 
    When using the continuous review system, stockouts can occur:
    • A. 

      During the delivery lead time

    • B. 

      Between review periods

    • C. 

      Prior to the reorder period

    • D. 

      At any time

  • 12. 
    When General Motors purchases tires for their automobiles, this can be classified as:
    • A. 

      Customer demand

    • B. 

      Independent demand

    • C. 

      Continuous demand

    • D. 

      Dependent demand

  • 13. 
    If the EOQ assumptions hold, and if a firm orders the EOQ, the average inventory level over time should be
    • A. 

      The square root of the EOQ.

    • B. 

      Equal to the lead time quantity

    • C. 

      Twice the EOQ

    • D. 

      Half the EOQ

  • 14. 
    Cycle counting can be described as:
    • A. 

      The analysis performed by an ABC analysis

    • B. 

      Inventory control in a motorcycle shop

    • C. 

      Stock counts of MRO items

    • D. 

      Physically counting inventory on a periodic basis

  • 15. 
    Too much inventory creates:
    • A. 

      Excess carrying cost

    • B. 

      Excess stockout cost

    • C. 

      Excess setup cost

    • D. 

      Excess ordering cost

  • 16. 
    Each unit produced contains $1.25 in materials. This is an example of
    • A. 

      Setup Cost

    • B. 

      Processing Cost

    • C. 

      Direct Cost

    • D. 

      Carrying Cost

  • 17. 
    Independent demand is the:
    • A. 

      Internal demand for all end-item parts and materials

    • B. 

      Demand for a firm's end products

    • C. 

      Forcasted demand for purchased items

    • D. 

      Absolute demand for all items

  • 18. 
    Which of the following would be considered a dependent demand item?
    • A. 

      Bicycle tires used to assemble a bicycle

    • B. 

      Televisions

    • C. 

      Furniture

    • D. 

      Retail customers

  • 19. 
    Lubricants for production equipment which are not parts of the final products are called:
    • A. 

      Raw materials

    • B. 

      Work in process

    • C. 

      MRO

    • D. 

      Finished goods

    • E. 

      Cycle stock

  • 20. 
    Which one of the following is NOT a reason for firms to carry inventory?
    • A. 

      To meet variations in product demand

    • B. 

      To increase production change/setup costs

    • C. 

      To allow for production scheduling flexibility

    • D. 

      To take advantage of quantity discounts

    • E. 

      To maintain independence of operations

  • 21. 
    Which of the following is a disadvantage of carrying too much inventory?
    • A. 

      It creates an unnecessary waste of scarce resources

    • B. 

      It leads to higher annual inventory ordering costs

    • C. 

      It leads to lower average finished goods inventories

    • D. 

      It increases the need to purchase items

    • E. 

      It reduces the need to conduct cycle counts

  • 22. 
    Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system?
    • A. 

      80 percent of the items account for 20 percent of the groups

    • B. 

      20 percent of the items account for 80 percent of the tasks

    • C. 

      80 percent of the unit cost accounts for 20 percent of the items

    • D. 

      80 percent of the total annual $ usage is accounted for, by 20 percent of the items4

  • 23. 
    Which of the following describes a global RFID challenge?
    • A. 

      Foreign firms will not use global RFID since the field communication standards tend to vary from country to country

    • B. 

      Globally, the RFID industry does not have its own UHF spectrum allocation

    • C. 

      RFID tags are passive in undeveloped countries

    • D. 

      RFID can track outbound shipments only

  • 24. 
    Which one do you like?
    • A. 

      Option 1

    • B. 

      Option 2

    • C. 

      Option 3

    • D. 

      Option 4

  • 25. 
    The primary purpose of the basic economic order quantity (EOQ) model is to:
    • A. 

      Calculate the reorder point, so that replenishments take place at the proper time

    • B. 

      Minimize the sum of purchase cost and holding cost

    • C. 

      Maximize the customer service level

    • D. 

      Calculate the optimum safety stock level

    • E. 

      None of the above

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