1. Ordering cost only consists of the shipping cost fromsupplier to customer.
True or False
2. Ordering cost is which type of cost?
Multiple Choice
Fixed
Variable
Overhead
3.
Which of the following would be considered part of OrderingCost? (choose all that apply)
Check All That Apply
Minimum shipping chargeMinimum shipping charge
Postage to mail the order to a supplier (who still lives in theearly 20th century)Postage to mail the order to a supplier (whostill lives in the early 20th century)
Renting a truck to haul the order (and only this order, no otherbusiness is used for this truck’s one time rental)Renting a truckto haul the order (and only this order, no other business is usedfor this truck’s one time rental)
Cost of the office building housing your employees.
4.
Safety stock is inventory held to guard against uncertainty
True or False
5.
Which two things drive the need for safety stock? (choosetwo)?
Check All That Apply
Demand variabilityDemand variability
Warehouse spaceWarehouse space
DelaysDelays
Manufacturing speedManufacturing speed
Customer choice
6.
The “right†amount of safety stock is often a function ofService Level. Service Level is:
Multiple Choice
The probability of making the right product
The probability of delay
The probability of meeting demand during a delay
The probability of delay causing more demand
7.
The standard deviation of demand during lead time is the samewhether or not lead time is variable.
True or False
8.
Finding average demand during lead time involves doing which ofthe following?
Multiple Choice
Squaring average demand per day and summing
Summing the square root of average demand per day andsumming
Summing the daily average demand per day
Integrating average daily demand from zero to four
9.
Since standard deviations don’t sum, we have to sum which thinginstead?
Multiple Choice
Average
Median
Kurtosis
Variance
10.
When lead time and demand are both variable, the formula we useconsists of which two parts? (select two)
Check All That Apply
Demand variabilityDemand variability
Lead time variabilityLead time variability
Order period variabilityOrder period variability
Accounting irregularities
11.
The P-system of inventory submits inventory orders at randomtimes.
True or False
12.
What is another name for the “P-system†of inventory?
Multiple Choice
Partial Request Inventory Order System
Poorly Routed Inventory Ordering System
Particularly Responsive Complicated Ordering System
Periodic Review Inventory System
13.
What are the two main challenges of the P-system? (selecttwo)
Check All That Apply
Unhappy customersUnhappy customers
Length of review periodLength of review period
Figuring out when to orderFiguring out when to order
ComputersComputers
Amount of inventory to have
14.
What is the great benefit of the P-system?
Multiple Choice
A name that is easy to remember
Customer satisfaction is guaranteed
Simplicity in managing the system
Complicated mathematical requirements
15.
An offered discount makes no change to determining optimal orderquantity.
True or False
16.
Which of the following statements is true when comparing thetotal cost curve for a product without discounting and the totalcost curve with discounting?
Multiple Choice
The discounted curve is always below the undiscounted curve
The undiscounted curve is always below the discounted curve
The discounted curve is always below the undiscounted curve butdoes not really exist for values less than the minimum order amountto receive the discount.
The undiscounted curve is always below the discounted curve butdoes not really exist for values less than the minimum order amountto receive the discount.
17.
If I calculate the EOQ with the new, discounted material costand the resulting quantity is enough to get the discount, whatshould I do?
Multiple Choice
Order the discounted EOQ amount
Order the regular EOQ amount
Average the discounted and undiscounted EOQ amounts and orderthat
Compare total costs of the two EOQ amounts
18.
In the end, the point of using the EOQ formula is to:
Multiple Choice
Properly enter the values we have calculated
Identify the number that is best under any condition
Point us toward the possible lowest cost option
Keep people who create math models employed
