MGMT 430 - Final Exam Study Guide With
Complete Solutions
Cycle inventory exists because producing or
purchasing in large lots allows a stage of the
supply chain to
a. exploit economies of scale and raise cost.
b. exploit economies of scale and lower cost.
c. exploit customers and lower cost.
d. exploit customers and raise cost - ANSWER a. exploit economies of scale and
raise cost
The price paid per unit is referred to as
a. the material cost and is denoted by C.
b. the fixed ordering cost and is denoted by S.
c. the holding cost and is denoted by H.
d. the purchase price and is denoted by P. - ANSWER a. the material cost and is
denoted by C.
The cost of carrying one unit in inventory for a
specified period of time, usually one year, is
referred to as
a. the material cost and is denoted by C.
b. the fixed ordering cost and is denoted by S.
c. the holding cost and is denoted by H.
d. the purchase price and is denoted by P. - ANSWER c. the holding cost and is
denoted by H.
Inventory holding costs would include which
of the following?
a. Obsolescence cost
b. Buyer time
c. Transportation cost
d. Receiving cost - ANSWER a. Obsolescence cost
A key to reducing cycle inventory is
a. the reduction of holding cost.
b. the reduction of manufacturing cost.
c. the reduction of lot size.
d. the reduction of warehouse space - ANSWER c. the reduction of lot size.
,A key to reducing lot size without increasing costs is to
a. reduce the holding cost associated with each lot.
b. reduce the fixed cost associated with each lot.
c. reduce the material cost associated with each lot.
d. reduce the manufacturing cost associated with each lot. - ANSWER b. reduce
the fixed cost associated with each
lot.
Quantity discounts lead to
a. a significant buildup of cycle inventory in the supply chain.
b. a slight buildup of cycle inventory in the supply chain.
c. a decrease in cycle inventory in the supply chain.
d. minor fluctuations of cycle inventory in the supply chain. - ANSWER a. a
significant buildup of cycle inventory in
the supply chain.
The practice where a firm charges differential prices to maximize profits is
a. lot pricing.
b. marginal pricing.
c. price incrimination.
d. price discrimination. - ANSWER d. price discrimination.
Replenishment orders in multiechelon supply chains should be
a. synchronized to increase cycle inventory and order costs.
b. synchronized to facilitate supplier
evaluation and selection.
c. synchronized to keep cycle inventory and
order costs low.
d. separated to increase cycle inventory and
order costs. - ANSWER c. synchronized to keep cycle inventory and
order costs low.
Manufacturers use trade promotions to offer a discounted price to retailers and
a. try to get greater discounts from retailers.
b. guarantee to buy back any stock that is
left.
c. try to meet the expected upturn in
demand.
d. set a time period over which the discount
is effective. - ANSWER d. set a time period over which the discount
is effective.
The key goals (from the manufacturer's
perspective) of a trade promotion are
a. to induce retailers to use price discounts.
b. to show the competition you are winning
, suppliers.
c. to select a new marketing plan.
d. to show retailers your product range. - ANSWER a. to induce retailers to use
price discounts.
A forward buy helps reduce the retailer's
future
a. storage needs.
b. cost of goods for product sold after the
promotion ends.
c. delivery and purchase intentions.
d. reliance on a supplier. - ANSWER b. cost of goods for product sold after the
promotion ends.
A key to reducing lot size is the
a. good relations with the supplier.
b. ability to reduce the number of orders.
c. need to find new suppliers
d. reduction of the fixed cost incurred per
lot. - ANSWER d. reduction of the fixed cost incurred per
lot.
Other ways to achieve aggregation include
a. having a single delivery coming from
multiple suppliers.
b. having multiple deliveries into one
warehouse.
c. using the company's own transport.
d. requiring all suppliers to communicate. - ANSWER a. having a single delivery
coming from
multiple suppliers.
When considering fixed costs, one cannot
ignore the
a. internal administration costs.
b. human resource cost.
c. company strategy.
d. receiving or loading costs. - ANSWER d. receiving or loading costs.
The quantity of inventory that a stage of the
supply chain either produces or purchases at a
given time is
a. an order.
b. a job.
c. a shipment.
d. a lot or batch. - ANSWER d. a lot or batch.
Complete Solutions
Cycle inventory exists because producing or
purchasing in large lots allows a stage of the
supply chain to
a. exploit economies of scale and raise cost.
b. exploit economies of scale and lower cost.
c. exploit customers and lower cost.
d. exploit customers and raise cost - ANSWER a. exploit economies of scale and
raise cost
The price paid per unit is referred to as
a. the material cost and is denoted by C.
b. the fixed ordering cost and is denoted by S.
c. the holding cost and is denoted by H.
d. the purchase price and is denoted by P. - ANSWER a. the material cost and is
denoted by C.
The cost of carrying one unit in inventory for a
specified period of time, usually one year, is
referred to as
a. the material cost and is denoted by C.
b. the fixed ordering cost and is denoted by S.
c. the holding cost and is denoted by H.
d. the purchase price and is denoted by P. - ANSWER c. the holding cost and is
denoted by H.
Inventory holding costs would include which
of the following?
a. Obsolescence cost
b. Buyer time
c. Transportation cost
d. Receiving cost - ANSWER a. Obsolescence cost
A key to reducing cycle inventory is
a. the reduction of holding cost.
b. the reduction of manufacturing cost.
c. the reduction of lot size.
d. the reduction of warehouse space - ANSWER c. the reduction of lot size.
,A key to reducing lot size without increasing costs is to
a. reduce the holding cost associated with each lot.
b. reduce the fixed cost associated with each lot.
c. reduce the material cost associated with each lot.
d. reduce the manufacturing cost associated with each lot. - ANSWER b. reduce
the fixed cost associated with each
lot.
Quantity discounts lead to
a. a significant buildup of cycle inventory in the supply chain.
b. a slight buildup of cycle inventory in the supply chain.
c. a decrease in cycle inventory in the supply chain.
d. minor fluctuations of cycle inventory in the supply chain. - ANSWER a. a
significant buildup of cycle inventory in
the supply chain.
The practice where a firm charges differential prices to maximize profits is
a. lot pricing.
b. marginal pricing.
c. price incrimination.
d. price discrimination. - ANSWER d. price discrimination.
Replenishment orders in multiechelon supply chains should be
a. synchronized to increase cycle inventory and order costs.
b. synchronized to facilitate supplier
evaluation and selection.
c. synchronized to keep cycle inventory and
order costs low.
d. separated to increase cycle inventory and
order costs. - ANSWER c. synchronized to keep cycle inventory and
order costs low.
Manufacturers use trade promotions to offer a discounted price to retailers and
a. try to get greater discounts from retailers.
b. guarantee to buy back any stock that is
left.
c. try to meet the expected upturn in
demand.
d. set a time period over which the discount
is effective. - ANSWER d. set a time period over which the discount
is effective.
The key goals (from the manufacturer's
perspective) of a trade promotion are
a. to induce retailers to use price discounts.
b. to show the competition you are winning
, suppliers.
c. to select a new marketing plan.
d. to show retailers your product range. - ANSWER a. to induce retailers to use
price discounts.
A forward buy helps reduce the retailer's
future
a. storage needs.
b. cost of goods for product sold after the
promotion ends.
c. delivery and purchase intentions.
d. reliance on a supplier. - ANSWER b. cost of goods for product sold after the
promotion ends.
A key to reducing lot size is the
a. good relations with the supplier.
b. ability to reduce the number of orders.
c. need to find new suppliers
d. reduction of the fixed cost incurred per
lot. - ANSWER d. reduction of the fixed cost incurred per
lot.
Other ways to achieve aggregation include
a. having a single delivery coming from
multiple suppliers.
b. having multiple deliveries into one
warehouse.
c. using the company's own transport.
d. requiring all suppliers to communicate. - ANSWER a. having a single delivery
coming from
multiple suppliers.
When considering fixed costs, one cannot
ignore the
a. internal administration costs.
b. human resource cost.
c. company strategy.
d. receiving or loading costs. - ANSWER d. receiving or loading costs.
The quantity of inventory that a stage of the
supply chain either produces or purchases at a
given time is
a. an order.
b. a job.
c. a shipment.
d. a lot or batch. - ANSWER d. a lot or batch.
