AAT LEVEL 3 MATS FLASHCARDS QUESTIONS AND ANSWERS
Buffer Inventory - CORRECT ANSWER✅✅Re-order level - (avg usage x avg lead time)
Re-order level - CORRECT ANSWER✅✅(Avg usage x avg lead time) + buffer inventory
Max Inventory Level - CORRECT ANSWER✅✅Buffer inventory + max re-order quantity
Max re-order quantity - CORRECT ANSWER✅✅Max inventory level - buffer inventory
Min re-order quantity - CORRECT ANSWER✅✅Avg usage x avg lead time
High-Low (Variable) - CORRECT ANSWER✅✅(Highest activity cost - Lowest activity cost) / (Highest
activity units - Lowest activity units)
High-Low (Fixed) - CORRECT ANSWER✅✅Highest activity cost - (variable cost per unit x highest activity
units)
Economic re-order quantity - CORRECT ANSWER✅✅Sqrt( (2 x annual demand x ordering cost) /
inventory holding cost per unit per year )
Overhead Recovery Rate (ABC Costing) - CORRECT ANSWER✅✅Cost pool total / Cost driver
Buffer Inventory - CORRECT ANSWER✅✅Re-order level - (avg usage x avg lead time)
Re-order level - CORRECT ANSWER✅✅(Avg usage x avg lead time) + buffer inventory
Max Inventory Level - CORRECT ANSWER✅✅Buffer inventory + max re-order quantity
Max re-order quantity - CORRECT ANSWER✅✅Max inventory level - buffer inventory
Min re-order quantity - CORRECT ANSWER✅✅Avg usage x avg lead time
High-Low (Variable) - CORRECT ANSWER✅✅(Highest activity cost - Lowest activity cost) / (Highest
activity units - Lowest activity units)
High-Low (Fixed) - CORRECT ANSWER✅✅Highest activity cost - (variable cost per unit x highest activity
units)
Economic re-order quantity - CORRECT ANSWER✅✅Sqrt( (2 x annual demand x ordering cost) /
inventory holding cost per unit per year )
Overhead Recovery Rate (ABC Costing) - CORRECT ANSWER✅✅Cost pool total / Cost driver
