Reference no: EM131184026

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