1 Show All reorder-point models assume constant lead.time. A) True B) False 2 If the production rate in an economic production lot size model is very much larger than the consumption rate, the results are practically the same for economic production lot size and EOQ. A) True B) False 3 With the quantity-discount model, an order level might not be at a minimum point of a total cost curve. A) True B) False 4 Moving goods to temporary storage is an example of a holding cost. A) True B) False 5 Setup cost is analogous to ordering cost in EOQ models. A) True B) False 6 In a reorder model the daily demand rate is normally distributed with a mean of 50 units and a standard deviation of 5 units. The lead time is 9 days, Q = 500 units, and the leadtime service level (LTSL) is 90%. What are approximate values for SS and ROP? A) 19, 69 B) 4, 69 C) 6, 469 D) 19, 469 7 If both the lead time and daily demand are constant, the ROP is equal to: A) Safety stock B) Expected demand minus safety stock. C) Expected demand plus safety stock. D) Daily demand times lead time. E) None of these. 8 Which inventory model does not provide an order quantity? A) EOQ. B) ROP C) Single-period. D) Fixed-interval E) Quantity discount 9 Which one of the following is not a requirement for effective inventory management? A) A system to keep track of inventory on hand B) A classification system for inventory items C) Reasonable estimates of holding and shortage costs D) Using an EOQ model for determining order quantity E) All are requirements 10 Which one of the following would not appear on a list of relevant costs of inventory? A) Shortage B) Carrying C) Order D) Holding E) Overtime 11 What items do students typically buy on an ROP basis? A) books B) wedding gifts C) gasoline for car D) computer E) bran muffins 12 In a two-bin inventory system, the amount contained in the second bin is equal to the: A) ROP B) EOQ C) amount in the first bin D) optimum stocking level E) safety stock 13 In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a majority of the inventory items would be classified as: A) A items B) B items C) C items D) either A items or B items E) either B items or C items 14 In the basic EOQ model, if annual demand doubles, the effect on the EOQ is: A) It doubles. B) It is four times its previous amount. C) It is half its previous amount. D) It is about 70 percent of its previous amount. E) It increases by about 40 percent. What are the two bins in twoWhen items in the first bin have been depleted, an order is placed to refill or replace them. The second bin is then supposed to have enough items to last until the order for the first bin arrives. In short, the first bin has a minimum of working stock, and the second bin keeps reserve stock or remaining material.
What inventory model uses a twoThe two-bin inventory control, often referred to as Kanban, is a model or system used in determining when resources or inputs should be restocked or recharged. This system is mostly used in the manufacturing sector. Items in the second bin are used to continue production when the first bin gets depleted.
Which of the following is not one of the assumptions of the basic EOQ model?The assumptions behind the economic order quantity (EOQ) model include all of the following EXCEPT: a constant rate of demand.
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