WGU C720 OA FINAL SCRIPT 2026
QUESTIONS WITH ANSWERS GRADED A+
◉Safety Stock. Answer: A cushion of inventory to protect against
unexpected demand. In this way, they can continue to meet
customer demand without delays.
◉Stock Out. Answer: Occurs when inventory is depleted.
◉Perpetual Inventory System. Answer: Continuously monitors
inventory levels and is also called a continuous review system.
Requires human input (i.e. cashier) and the ordering of more
inventory is triggered by reorder point.
o Requires an exact inventory balance at all times
o Best for big businesses, retail stores, or banks
o High value and high volume
o Expensive to implement and maintain
◉Periodic Inventory System. Answer: Randomly monitors inventory
levels and is also called the fixed order interval system.
,o Requires a physical count periodically
o Used when a supplier will only deliver at specific time intervals
o Low value and volume
o Used for small businesses
o Inexpensive to implement and maintain
◉ABC analysis. Answer: Has been developed to determine which
inventory items should receive the highest level of control. By
multiplying the dollar value of each item by its annual usage, a dollar
usage value can be obtained. Dollar usage follows the Pareto
Principle in that frequently, only 20% of all the items account for
80% of the total dollar usage, while the remaining items frequently
account for only 20% of the dollar usage. This principle leads to the
_____ classification, which is based on focusing efforts where the
payoff is highest
◉Pareto Principle. Answer: Only 20% of all the items account for
80% of the total dollar usage, while the remaining items frequently
account for only 20% of the dollar usage. This principle leads to the
ABC classification, which is based on focusing efforts where the
payoff is highest
◉Economic Order Quantity (EOQ). Answer: For inventory that
doesn't require production, when demand is constant and known,
when cost per unit does not depend on order quantity.
,Most appropriate for retail stores or companies that order finished
goods.
◉Economic Production Quantity (EPQ). Answer: For inventory that
will be used in production, When incremental ordering and
depletion of inventory is allowed, Also called production order
quantity.
Most appropriate for manufacturing and production companies
◉The goal of firms using the EOQ & EPQ model. Answer: Minimize
the total annual costs of ordering and holding inventory by varying
the order quantity.
◉Quantity discount model. Answer: A discount offered in price for
ordering above a specified amount
◉Transportation discounts. Answer: A discount offered on shipping
cost for ordering above a specified amount
◉Revenue Sharing. Answer: When 2 or more companies partner and
divides the profits received based on an agreement between all
parties involved.
, ◉Reserve Capacity. Answer: When a company stores, or pays
another company to store, excess inventory to be used for
unexpected demand
◉Quality. Answer: the degree to which a specific product conforms
to its design characteristics or specifications
The amount of a specific, desired attribute
The capacity to satisfy customers' needs
Consistently meeting or exceeding the customer's needs and
expectations
Is everyone's responsibility in the organization
◉Internal orientation of quality. Answer: Directly measure
characteristics of the product or service, such as the number of
packages delivered on time or the thickness of an engine part based
on manufactures specification.
◉External orientation of quality. Answer: Fitness for use for the
customer or the capacity to satisfy customer's needs.
QUESTIONS WITH ANSWERS GRADED A+
◉Safety Stock. Answer: A cushion of inventory to protect against
unexpected demand. In this way, they can continue to meet
customer demand without delays.
◉Stock Out. Answer: Occurs when inventory is depleted.
◉Perpetual Inventory System. Answer: Continuously monitors
inventory levels and is also called a continuous review system.
Requires human input (i.e. cashier) and the ordering of more
inventory is triggered by reorder point.
o Requires an exact inventory balance at all times
o Best for big businesses, retail stores, or banks
o High value and high volume
o Expensive to implement and maintain
◉Periodic Inventory System. Answer: Randomly monitors inventory
levels and is also called the fixed order interval system.
,o Requires a physical count periodically
o Used when a supplier will only deliver at specific time intervals
o Low value and volume
o Used for small businesses
o Inexpensive to implement and maintain
◉ABC analysis. Answer: Has been developed to determine which
inventory items should receive the highest level of control. By
multiplying the dollar value of each item by its annual usage, a dollar
usage value can be obtained. Dollar usage follows the Pareto
Principle in that frequently, only 20% of all the items account for
80% of the total dollar usage, while the remaining items frequently
account for only 20% of the dollar usage. This principle leads to the
_____ classification, which is based on focusing efforts where the
payoff is highest
◉Pareto Principle. Answer: Only 20% of all the items account for
80% of the total dollar usage, while the remaining items frequently
account for only 20% of the dollar usage. This principle leads to the
ABC classification, which is based on focusing efforts where the
payoff is highest
◉Economic Order Quantity (EOQ). Answer: For inventory that
doesn't require production, when demand is constant and known,
when cost per unit does not depend on order quantity.
,Most appropriate for retail stores or companies that order finished
goods.
◉Economic Production Quantity (EPQ). Answer: For inventory that
will be used in production, When incremental ordering and
depletion of inventory is allowed, Also called production order
quantity.
Most appropriate for manufacturing and production companies
◉The goal of firms using the EOQ & EPQ model. Answer: Minimize
the total annual costs of ordering and holding inventory by varying
the order quantity.
◉Quantity discount model. Answer: A discount offered in price for
ordering above a specified amount
◉Transportation discounts. Answer: A discount offered on shipping
cost for ordering above a specified amount
◉Revenue Sharing. Answer: When 2 or more companies partner and
divides the profits received based on an agreement between all
parties involved.
, ◉Reserve Capacity. Answer: When a company stores, or pays
another company to store, excess inventory to be used for
unexpected demand
◉Quality. Answer: the degree to which a specific product conforms
to its design characteristics or specifications
The amount of a specific, desired attribute
The capacity to satisfy customers' needs
Consistently meeting or exceeding the customer's needs and
expectations
Is everyone's responsibility in the organization
◉Internal orientation of quality. Answer: Directly measure
characteristics of the product or service, such as the number of
packages delivered on time or the thickness of an engine part based
on manufactures specification.
◉External orientation of quality. Answer: Fitness for use for the
customer or the capacity to satisfy customer's needs.
