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Exam 9: Inventory Management Fundamentals and Independent Demand

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Question 21

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Extra stock held in anticipation of variable demand is known as ________.

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Question 22

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In inventory models,the rate of demand is an important factor in determining the reorder point.

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Question 23

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Producing extra inventory during periods of low demand,which is then consumed during periods of high demand,is known as ________.

In managing inventory for independent demand items,the two important decision queries that need to be answered are ________.

In inventory models,a quantity discount will lower the reorder point.

Hallmark manufactures greeting cards throughout the year,building up inventory during lean periods to be utilized during the holiday period.They are using a technique known as ________.

Classic Car Dealers has an average of 150 cars in inventory.They sold 3000 cars this past year.Assuming 365 days in a work year,how many days' worth of inventory do they carry on average?

Compute the reorder point when weekly demand is 100 units,lead time is 2 weeks,the desired service level is 98% (which corresponds to 2.06 standard deviations from the mean) and the standard deviation of demand during lead time is 30 units.

If a firm has annual cost of goods sold of $100 million and turn over inventory twice a month,the average inventory they carry would be

Classic Kitchen cabinets has forecasted demand for 200 cabinets for the upcoming month.Based on this information and knowing that each cabinet requires two knobs,they have forecasted that 400 knobs will be required.What term can be used to describe the demand for the knobs?

What would be the length of an order cycle - i.e.the time between successive orders using the EOQ?

In ABC inventory analysis,C items typically represent about 15 percent of the number of items but 80 percent of the usage.

In a continuous review inventory system,the order size is the same for each order.

The two important inventory decisions in managing inventory for independent demand items are how much to order and which vendor to use.

In ABC analysis,inventory items are classified by unit cost,with expensive items being classified as A items,and inexpensive items being classified as C items.

Products that are waiting to be sold to customers are known as

The materials manager for a tire manufacturer must periodically place orders for a key chemical,one of the raw materials used in producing tires.The manager knows that manufacturing uses the chemical at a rate of 300 lbs.each week,and the lead time for delivery is 4 days.Assume that the manufacturing operation runs 5 days a week.At what point should the chemical be reordered?

Inventory that has been received and is in the production phase is known as ________ inventory.

If a firm turns over inventory once a week,they would have 7 days' worth of inventory on hand.

In ABC inventory analysis,the typical percentage for the total dollar volume of C items is