Production & OPs. (FINAL EXAM) ACTUAL QUESTIONS AND CORRECT ANSWERS

Production & OPs. (FINAL EXAM)
ACTUAL QUESTIONS AND CORRECT
ANSWERS
For class C SKUs, why is much looser inventory control appropriate? - CORRECT
ANSWERS A stockout of a class C SKU is not as crucial as for a class A SKU.



B. *****CORRECT****

The inventory holding cost of class C SKUs tends to be low.



C.

Class C SKUs tend to have very low demand.



D.

All of the above.



A perpetual inventory system requires that - CORRECT ANSWERS A.

inventory is constantly being produced.



B.

inventory is always in stock.



C.*****CORRECT*****

inventory records are always current.

,D.

inventory is always on order.



Which of the following are NOT advantages of a periodic review system? - CORRECT
ANSWERS A.****CORRECT****

Lower safety stock



B.

Can permit combining orders to common suppliers



C.

Convenient administration of inventory control



D.

All of the above.



A form of shrinkage called ________ occurs when inventory cannot be used or sold at full value,
owing to model changes, engineering modifications, or unexpectedly low demand. - CORRECT
ANSWERS A.

deterioration



B.

life-cycle shrink



C.****CORRECT****

obsolescence

, D.

pilferage



Which of these statements is NOT required in order for the EOQ model to be a reasonable
approach? - CORRECT ANSWERS A.

The demand rate is known and constant.



B.***CORRECT****

The setup/ordering cost must exceed the annual holding cost of one unit.



C.

The lead time is known and constant.



D.

No constraints are placed on the size of each lot.



Which of the following costs is NOT considered an inventory holding (or carrying) cost? -
CORRECT ANSWERS A.

inventory storage costs



B.****CORRECT****

inventory transportation costs



C.

inventory shrinkage costs