1|Page
OSCM 373 EXAM 3 |2COMPLETE QUESTIONS WITH 100%
GRADED EXPERT SOLUTIONS | 100% CORRECT | GET A+
inventory management ......ANSWER......establish a system for tracking
items in inventory and makes decisions about what to order and how
much
A-B-C approach classification system ......ANSWER......Classifying
inventory according to some measure of importance, and allocating
control efforts accordingly
A items (ABC) ......ANSWER......very important, 10-20% of the number of
items in the inventory, and about 60-70% of the annual dollar value
B items (ABC) ......ANSWER......moderatley important
C items (ABC) ......ANSWER......50-60% of the number of items in
inventory but only 10-15% of the annual dollar value
How to do ABC classification ......ANSWER......1. For each item, multiply
annual volume by unit price to get annual dollar value
2. arrange annual values in descending order
pg. 1
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in an A-B-C system, C items typically represent about this percentage of
items: ......ANSWER......50%
Periodic System ......ANSWER......physical count of items in inventory
made at periodic intervals. many items ordered at the same time;
savings in processing and shipping of orders
perpetual inventory system ......ANSWER......System that keeps track of
removals from inventory continuously, thus monitoring current levels of
each item. continuous control; can optimize Q and place orders when
inventory drops to a predetermined minimum level
periodic system cons ......ANSWER......lack of control between reviews;
having to keep extra stock to protect against shortages
perpetual inventory system cons ......ANSWER......added cost of record
keeping; usually has to be accompanied by a periodic physical count
when is the best time to embed the RFID tag in the good?
......ANSWER......assembly
Economic Order Quantity models ......ANSWER......identify the optimal
order quantity by minimizing the sum of annual costs that vary with
order size and frequency
pg. 2
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re-order point ......ANSWER......when the quantity on hand of an item
drops to this amount (quantity-trigger), the item is reordered
what does Economic Order Quantity (EOQ) solve ......ANSWER......how
much to order
holding (carrying) costs ......ANSWER......cost to carry an item in
inventory for a length of time, usually a year
ordering costs (setup costs) ......ANSWER......the costs involved in
placing an order or preparing equipment for a job
what is not a component of holding costs? ......ANSWER......delivery
what should you do to prevent running out of gas (inventory)?
......ANSWER......increase ROP (amount left)
Using the EOQ model, if an item's holding cost increases, its order
quantity will: ......ANSWER......decrease
Single-period model ......ANSWER......model for ordering of perishables
and other items with limited useful lives
pg. 3
OSCM 373 EXAM 3 |2COMPLETE QUESTIONS WITH 100%
GRADED EXPERT SOLUTIONS | 100% CORRECT | GET A+
inventory management ......ANSWER......establish a system for tracking
items in inventory and makes decisions about what to order and how
much
A-B-C approach classification system ......ANSWER......Classifying
inventory according to some measure of importance, and allocating
control efforts accordingly
A items (ABC) ......ANSWER......very important, 10-20% of the number of
items in the inventory, and about 60-70% of the annual dollar value
B items (ABC) ......ANSWER......moderatley important
C items (ABC) ......ANSWER......50-60% of the number of items in
inventory but only 10-15% of the annual dollar value
How to do ABC classification ......ANSWER......1. For each item, multiply
annual volume by unit price to get annual dollar value
2. arrange annual values in descending order
pg. 1
,2|Page
in an A-B-C system, C items typically represent about this percentage of
items: ......ANSWER......50%
Periodic System ......ANSWER......physical count of items in inventory
made at periodic intervals. many items ordered at the same time;
savings in processing and shipping of orders
perpetual inventory system ......ANSWER......System that keeps track of
removals from inventory continuously, thus monitoring current levels of
each item. continuous control; can optimize Q and place orders when
inventory drops to a predetermined minimum level
periodic system cons ......ANSWER......lack of control between reviews;
having to keep extra stock to protect against shortages
perpetual inventory system cons ......ANSWER......added cost of record
keeping; usually has to be accompanied by a periodic physical count
when is the best time to embed the RFID tag in the good?
......ANSWER......assembly
Economic Order Quantity models ......ANSWER......identify the optimal
order quantity by minimizing the sum of annual costs that vary with
order size and frequency
pg. 2
, 3|Page
re-order point ......ANSWER......when the quantity on hand of an item
drops to this amount (quantity-trigger), the item is reordered
what does Economic Order Quantity (EOQ) solve ......ANSWER......how
much to order
holding (carrying) costs ......ANSWER......cost to carry an item in
inventory for a length of time, usually a year
ordering costs (setup costs) ......ANSWER......the costs involved in
placing an order or preparing equipment for a job
what is not a component of holding costs? ......ANSWER......delivery
what should you do to prevent running out of gas (inventory)?
......ANSWER......increase ROP (amount left)
Using the EOQ model, if an item's holding cost increases, its order
quantity will: ......ANSWER......decrease
Single-period model ......ANSWER......model for ordering of perishables
and other items with limited useful lives
pg. 3
