1 for specific request mail
OPM 3000 Final Exam Prep Questions and Correct
Answers | Latest Update
If two firms have the same annual inventory turns, they also have the
same days-of-supply. Ans: True
Why: (If two firms have the same annual inventory turns, then they have
the same years-of-supply because years-of-supply = 1 / annual inventory
turns. If they have the same years-of-supply, then they must have the
same days-of-supply as well because Days-of-supply = Years-of-supply ×
365.)
Assignment Expert
Product A's annual inventory turns is 4 and product B's annual inventory
turns is 6. Which product has the higher amount of inventory, measured
Guru01 - Stuvia
in dollars? Ans: Cannot be determined (could be either one)
Why: (Turns is the ratio of Sales to Inventory. Just because produce A has
the lower turns doesn't mean that it has the higher amount of inventory.
2026
Product A could have sales of $10,00 per year and product B could have
sales of $100,000 per year.)
©
Which of the following possible responses by a customer who is faced
with a stockout is the most costly to the firm?
*Lose the sale and lose the customer. Correct
*Lose the sale.
*Lose the sale of one item, but the customer purchases another item.
*Customer waits for the item to become available. Ans: Lose the sale and
lose the customer
Firms in the same industry will have the same inventory turns. Ans:
False
, 2 for specific request mail
Why: (There can be variation in inventory turns among the same firms
within an industry.)
A local bookstore turns over its inventory once every four months. The
bookstore's annual cost of holding inventory is 35 percent.
What is the inventory holding cost (in $) for a book that the bookstore
purchases for $12 and sells for $19? ______ per book Ans: Answer is 1.40
per book
Why:
Assignment Expert
Inventory turnover = 12 months / 4 months = 3 times.
Inventory holding cost for 12 months = 35% of unit cost
Guru01 - Stuvia
Inventory holding cost for 4 months = 35% × (4/12) = 11.67 % per 4
months
Unit cost of the book = $12
2026
Holding cost per unit per 4 months = unit cost × holding cost for 4
©
months
= $12 x 11.6%
= $ 1.392 per book per 4 months
= $1.40 per book per 4 months.
Hence, inventory holding cost (in $) for a book that the bookstore per
book is IS 1.4.
A bicycle manufacturer purchases bicycle seats from an outside supplier
for $23 each. The manufacturer's inventory of seats turns over 1.2 times
per month, and the manufacturer has an annual inventory holding cost of
33 percent.
OPM 3000 Final Exam Prep Questions and Correct
Answers | Latest Update
If two firms have the same annual inventory turns, they also have the
same days-of-supply. Ans: True
Why: (If two firms have the same annual inventory turns, then they have
the same years-of-supply because years-of-supply = 1 / annual inventory
turns. If they have the same years-of-supply, then they must have the
same days-of-supply as well because Days-of-supply = Years-of-supply ×
365.)
Assignment Expert
Product A's annual inventory turns is 4 and product B's annual inventory
turns is 6. Which product has the higher amount of inventory, measured
Guru01 - Stuvia
in dollars? Ans: Cannot be determined (could be either one)
Why: (Turns is the ratio of Sales to Inventory. Just because produce A has
the lower turns doesn't mean that it has the higher amount of inventory.
2026
Product A could have sales of $10,00 per year and product B could have
sales of $100,000 per year.)
©
Which of the following possible responses by a customer who is faced
with a stockout is the most costly to the firm?
*Lose the sale and lose the customer. Correct
*Lose the sale.
*Lose the sale of one item, but the customer purchases another item.
*Customer waits for the item to become available. Ans: Lose the sale and
lose the customer
Firms in the same industry will have the same inventory turns. Ans:
False
, 2 for specific request mail
Why: (There can be variation in inventory turns among the same firms
within an industry.)
A local bookstore turns over its inventory once every four months. The
bookstore's annual cost of holding inventory is 35 percent.
What is the inventory holding cost (in $) for a book that the bookstore
purchases for $12 and sells for $19? ______ per book Ans: Answer is 1.40
per book
Why:
Assignment Expert
Inventory turnover = 12 months / 4 months = 3 times.
Inventory holding cost for 12 months = 35% of unit cost
Guru01 - Stuvia
Inventory holding cost for 4 months = 35% × (4/12) = 11.67 % per 4
months
Unit cost of the book = $12
2026
Holding cost per unit per 4 months = unit cost × holding cost for 4
©
months
= $12 x 11.6%
= $ 1.392 per book per 4 months
= $1.40 per book per 4 months.
Hence, inventory holding cost (in $) for a book that the bookstore per
book is IS 1.4.
A bicycle manufacturer purchases bicycle seats from an outside supplier
for $23 each. The manufacturer's inventory of seats turns over 1.2 times
per month, and the manufacturer has an annual inventory holding cost of
33 percent.
