Question 1

In a perishable products model,if shortage and excess costs are equal,then the optimum service level is:

Accepted Answer

A)  0 
B)  0 33 
C)  0 5 
D)  0 67 
E)  1 F) B) and C)
G) A) and E)

Question 2

If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0 3,0 3,0 2,and 0 2 respectively,what is the service level if two units are stocked?

Accepted Answer

A)  0 2 
B)  0 3
C)  0 5 
D)  0 6 
E)  0 8 F) C) and E)
G) A) and E)

Question 3

The service level in a perishable product model is the probability that no shortage will occur

Accepted Answer

A) True 
 B)False

Question 4

Holding backorders when shortages occur and then filling them when inventory is replenished is referred to as shortordering

Accepted Answer

A) True 
 B)False

Question 5

A multiechelon inventory system is a system with multiple echelons of inventory where each echelon is used to replenish the inventories at the various sites of the next lower echelon

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not an assumption of the perishable product model?

Accepted Answer

A)  Each application involves a single time period 
B)  It is possible to dispose of any units of the product remaining at the end of the period 
C)  The only decision to be made is how many units to order 
D)  The probability distribution of demand is unknown 
E)  There are costs incurred for both underordering and overordering F) C) and D)
G) None of the above

Question 7

Which one of the following is not generally a determinant of the reorder point?

Accepted Answer

A)  Average demand 
B)  Length of lead time 
C)  Setup cost 
D)  Shortage cost 
E)  Purchase cost F) B) and C)
G) B) and E)

Question 8

In the ABC control method,items that have high unit costs are always classified as A items

Accepted Answer

A) True 
 B)False

Question 9

The reorder point equals the average sales during lead time plus the number of backlogged items

Accepted Answer

A) True 
 B)False

Question 10

If average demand for an inventory item is 200 units per day,lead time is three days,and safety stock is 100 units,the reorder point is:

Accepted Answer

A)  100 units 
B)  200 units 
C)  300 units 
D)  600 units 
E)  700 units F) C) and D)
G) A) and D)

Question 11

The need for safety stocks can be reduced by an operation strategy which:

Accepted Answer

A)  increases lead time 
B)  increases lot sizes 
C)  decreases ordering costs 
D)  decreases lead time variability 
E)  None of the above F) A) and E)
G) None of the above

Question 12

The EOQ and (R,Q)models are appropriate if unused items can be carried over into subsequent time periods

Accepted Answer

A) True 
 B)False

Question 13

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds,two fundamental decisions must be made about inventory: the timing and size of orders

Accepted Answer

A) True 
 B)False

Question 14

The ABC control method involves classifying items by unit cost

Accepted Answer

A) True 
 B)False

Question 15

Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods?

Accepted Answer

A)  EOQ 
B)  Continuous review 
C)  Perishable product 
D)  Quantity discounts 
E)  (R,Q)  F) B) and D)
G) D) and E)

Question 16

The choice of the distribution to use as the demand distribution has little effect on the reorder point

Accepted Answer

A) True 
 B)False

Question 17

A company's supply chain consists of the flow of materials and information from suppliers,through production,to the end users

Accepted Answer

A) True 
 B)False

Question 18

One consequence of uncertain demand is the risk of incurring shortages

Accepted Answer

A) True 
 B)False

Question 19

When the item is offered for resale,shortage costs in the perishable product model can include a charge for loss of customer goodwill

Accepted Answer

A) True 
 B)False

Question 20

The goal of the perishable product model is to identify the order quantity that will minimize the shortage costs

Accepted Answer

A) True 
 B)False

Exam 19: Inventory management with uncertain demand

The choice of the distribution to use as the demand distribution has little effect on the reorder point

Correct AnswerverifiedShow Answer

The EOQ and (R,Q)models are appropriate if unused items can be carried over into subsequent time periods

Correct AnswerverifiedShow Answer

When the item is offered for resale,shortage costs in the perishable product model can include a charge for loss of customer goodwill

Correct AnswerverifiedShow Answer

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds,two fundamental decisions must be made about inventory: the timing and size of orders

Correct AnswerverifiedShow Answer

The reorder point equals the average sales during lead time plus the number of backlogged items

Correct AnswerverifiedShow Answer

The service level in a perishable product model is the probability that no shortage will occur

Correct AnswerverifiedShow Answer

If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0 3,0 3,0 2,and 0 2 respectively,what is the service level if two units are stocked?

Correct AnswerverifiedShow Answer

One consequence of uncertain demand is the risk of incurring shortages

Correct AnswerverifiedShow Answer

Which one of the following is not generally a determinant of the reorder point?

Correct AnswerverifiedShow Answer

A company's supply chain consists of the flow of materials and information from suppliers,through production,to the end users

Correct AnswerverifiedShow Answer

Holding backorders when shortages occur and then filling them when inventory is replenished is referred to as shortordering

Correct AnswerverifiedShow Answer

The ABC control method involves classifying items by unit cost

Correct AnswerverifiedShow Answer

Which of the following is not an assumption of the perishable product model?

Correct AnswerverifiedShow Answer

The need for safety stocks can be reduced by an operation strategy which:

Correct AnswerverifiedShow Answer

A multiechelon inventory system is a system with multiple echelons of inventory where each echelon is used to replenish the inventories at the various sites of the next lower echelon

Correct AnswerverifiedShow Answer

In the ABC control method,items that have high unit costs are always classified as A items

Correct AnswerverifiedShow Answer

If average demand for an inventory item is 200 units per day,lead time is three days,and safety stock is 100 units,the reorder point is:

Correct AnswerverifiedShow Answer

In a perishable products model,if shortage and excess costs are equal,then the optimum service level is:

Correct AnswerverifiedShow Answer

Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods?

Correct AnswerverifiedShow Answer

The goal of the perishable product model is to identify the order quantity that will minimize the shortage costs

Correct AnswerverifiedShow Answer

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