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Exam 9: Inventory Management Fundamentals and Independent Demand

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Question 31

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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?

A) When 0 lbs. are remaining
B) When 240 lbs. are remaining
C) When 375 lbs. are remaining
D) When 1200 lbs. are remaining

E) C) and D)
F) B) and C)

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Question 32

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If a firm turns over inventory once a week,they would have ________ inventory turns per year.

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Question 33

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Manufacturers of seasonal demand products who manufacture the product throughout the year,so as to build up an inventory buffer to be used during the high demand season are using a technique called

Demand that is calculated from a parent item is called ________.

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

The order quantity at which total annualized inventory-related costs are minimized is known as the ________.

In fixed time period inventory models,inventory is reordered when it reaches a predetermined stock level.

The period between placing and receiving an order is known as ________.

Building up inventory in anticipation of unforeseen global supply chain interruptions is known as ________.

As the variability of demand during lead time increases,required safety stock for the same service level will ________.

Stock that is owned by the supplier but is in the physical possession of the buyer is known as ________.

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

Best Home Cabinets orders wood,their main raw material,from their supplier once every week.The inventory model they are using is known as a ________ model.

A repetitive procedure for counting inventory on a regular basis is known as ________.

Production smoothing is balancing the cost of set-ups with inventory carrying costs.

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

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

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

In setting the reorder point for an item with variable demand,a service level of 95% will imply which of the following?

Inputs to production that take the form of either fundamental supplies or subassemblies and components received from suppliers are known as ________.