One use of inventory is

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to ensure that item price is maximized.

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to administer a hedge versus inflation.
to tightly link production and also distribution processes.
to tightly connect a firm"s production with the customers" demand.

ABC analysis divides an organization"s on-hand inventory right into three great based upon

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annual dollar volume.
annual demand.
the variety of units ~ above hand.
unit price.

Cycle counting

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is a process by i m sorry inventory documents are verified.
provides a measure up of inventory turnover.
assumes that all inventory records should be proved with the exact same frequency.
cannot be done in one independent demand situation.

The difference(s) between the simple EOQ model and also the production order quantity version is (are) that

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there space no holding prices in the production order amount model.
the EOQ version does not call for the assumption of known, consistent lead time.
the production order quantity model does not require the presumption of instantaneous delivery.
the production order quantity version does not need the assumption of known, consistent demand.

Extra systems that are held in inventory to alleviate stockouts room called

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demand variance.
just-in-time inventory.
reorder point.
safety stock.

Inventory record accuracy would certainly be diminished by

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cycle counting.
ABC analysis.
increasing stockroom accessibility.
reorder points.

The two most important inventory-based questions answered by the typical inventory model are

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when to ar an order and what is the price of the order.
how many of things to order and also what is the expense of this order.
when to place an order and also how countless of an item to order.
how numerous of an object to order and also with whom the order have to be placed.

The proper level of security stock is typically determined by

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choosing the level of safety and security stock the assures a given business level.
taking the square source of the financial order quantity.
carrying sufficient safety share so regarding eliminate every stockouts.
minimizing intended stockout cost.

Which the the adhering to is NOT a type of inventory?

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raw material
work-in-process
MRP
finished goods

In the probabilistic model, raising the service level will

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reduce the price of the list policy.
increase the price of the list policy.
cannot it is in determined.
have no affect on the expense of the perform policy.

A system that root cause ordering top top a uniform time communication is dubbed a

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fixed-quantity system.
reorder allude system.
EOQ.
fixed-period system.

A firm wishes to identify the EOQ for things that has an annual demand the 2,000 units, a cost per bespeak of $75, and annual carrying expense of $7.50 every unit. What is the EOQ?

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73
200 units
40,000 units
100

A manufacturing facility is do the efforts to determine the ideal batch dimension for things that is developed intermittently. This item has actually an yearly demand of 1,000 units, an annual carrying expense of $10 every unit, and also a setup expense of $400. They operate 50 weeks per year, and can develop 40 systems per week. What is the best batch size for this item?
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65
400
283
800

A store wants to ensure a shelf complete of marshmallow peeps together the vacation season approaches. Daily need for peeps is normally spread with a mean of 25 and also a standard deviation that 5. Command time is 3 days and the save intends a 98% business level. What is your reorder point?

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107
93
87
75

A manufacturing facility is make the efforts to expand production top top a machine that is right now used to create one part. This item has an yearly demand of 1,000 units, an annual carrying price of $10 per unit, and a setup expense of $400. They operate 50 weeks per year, and can create 40 systems per week. What portion of the time are they using this machine?
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50%
30%
40%
20%

Policies based on ABC analysis might encompass investing

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more in supplier advance for A items.
extra treatment in forecasting for C items.
the most time and also effort verifying the accuracy of records for B items.
more in inventory defense for C items.

A system that keeps track of every withdrawal or addition to inventory consistently is

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a perpetual list system.
a fixed period system.
a fixed quantity system.

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a continuous inventory system.
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