LSCM 3960 Exam 2 Latest Updated
Graded A+
All of the following are reasons for holding inventory EXCEPT: - Answer- Inventories
eliminate the variation in supply and demand
If demand and lead time are constant, only _____________ is necessary. - Answer-
Cycle stock
Pareto Analysis may be used to classify parts, customers, or activities. When
determining the pareto segments to classify oarts, you should: - Answer- There will
rarely be a clean break at the 80% (or 20%) point so your cut-off is subjective; however
the general 80-20 relationship still holds.
The objective of inventory management is to: - Answer- Increase corporate profitability
Which of the following is NOT a principle reason for holding finished goods inventory? -
Answer- Prevention of production shutdowns due to parts shortages
Inventory is an ASSET on the balance sheet and a(n) ____________ on the income
statement. - Answer- Variable expense
Capital cost focuses on the cost of capital tied up in ______________ and the resulting
lost opportunity from investing that capital elsewhere. - Answer- Inventory
Other things being equal, HIGH inventory carrying costs will tend to lead to: - Answer-
B, C, and D
Increasing inventory from 10 to 15 has a greater impact than increasing inventory turns
from 1 or 2. - Answer- False
Which of the following statements about just-in-time (JIT) is FALSE? - Answer- JIT
programs usually do not impact inventory turnover rates
Methods of decreasing inventory related costs include all of the following measures
EXCEPT: - Answer- Increasing the number of expedited orders
Seasonal stocks are NOT influenced by - Answer- EOQ
Management will automatically achieve least total cost logistics by minimizing inventory
carrying costs. - Answer- False
Batching economics or cycle stocks usually arise from three sources. Which of these is
NOT a source? - Answer- Demand
, In the event of an "stock out" at your location, one of the things that could happen is -
Answer- Extra shipping cost may be incurred
A DRP system is usually coupled with a ______________ system in an attempt to
manage the flow and timing of both inbound materials and outbound finished goods. -
Answer- MRP
EOQ models exist that inc,due adjustments for volume transportation rates and for
quantity discounts. - Answer- True
WIP inventories are - Answer- Associated with manufacturing
If demand DECREASES by 13% and the value of each unit DECREASES by 13%, what
will happen to the EOQ? (Assume that everything else remains the same). - Answer-
The EOQ will remain the same
Using Wilson's EOQ formula, what will happen to the average inventory level (Q/2) if
unit cost is DECREASED by 4.1% and annual demand is INCREASED by 4.1% at the
same ti Every? - Answer- (Q/2) will increase
Assuming the cost to place an order is constant, all other things remaining the same,
INCREASING the order quantity (Q) causes total ANNUAL ordering costs to: - Answer-
Decrease
Other things being equal, HIGH inventory carrying costs will tend to lead to: - Answer-
B, C, and D
Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory
turns from 1 to 2. - Answer- False
Each of the following is an inventory holding cost EXCEPT: - Answer- Accounting cost
EOQ models exist that inc,due adjustments for volume transportation rates and for
quantity discounts. - Answer- True
If you were to "manage" Wilson's EOQ as a means of reducing your company
inventories, which variable of Wilson's EOQ would make the most sense to change. -
Answer- Ordering cost.
By using the latest information technology it is possible to substitute information for
inventory and other logistics expenses. - Answer- True
Managers have server all options for software development and implementation. They
include: - Answer- All of these answers
Graded A+
All of the following are reasons for holding inventory EXCEPT: - Answer- Inventories
eliminate the variation in supply and demand
If demand and lead time are constant, only _____________ is necessary. - Answer-
Cycle stock
Pareto Analysis may be used to classify parts, customers, or activities. When
determining the pareto segments to classify oarts, you should: - Answer- There will
rarely be a clean break at the 80% (or 20%) point so your cut-off is subjective; however
the general 80-20 relationship still holds.
The objective of inventory management is to: - Answer- Increase corporate profitability
Which of the following is NOT a principle reason for holding finished goods inventory? -
Answer- Prevention of production shutdowns due to parts shortages
Inventory is an ASSET on the balance sheet and a(n) ____________ on the income
statement. - Answer- Variable expense
Capital cost focuses on the cost of capital tied up in ______________ and the resulting
lost opportunity from investing that capital elsewhere. - Answer- Inventory
Other things being equal, HIGH inventory carrying costs will tend to lead to: - Answer-
B, C, and D
Increasing inventory from 10 to 15 has a greater impact than increasing inventory turns
from 1 or 2. - Answer- False
Which of the following statements about just-in-time (JIT) is FALSE? - Answer- JIT
programs usually do not impact inventory turnover rates
Methods of decreasing inventory related costs include all of the following measures
EXCEPT: - Answer- Increasing the number of expedited orders
Seasonal stocks are NOT influenced by - Answer- EOQ
Management will automatically achieve least total cost logistics by minimizing inventory
carrying costs. - Answer- False
Batching economics or cycle stocks usually arise from three sources. Which of these is
NOT a source? - Answer- Demand
, In the event of an "stock out" at your location, one of the things that could happen is -
Answer- Extra shipping cost may be incurred
A DRP system is usually coupled with a ______________ system in an attempt to
manage the flow and timing of both inbound materials and outbound finished goods. -
Answer- MRP
EOQ models exist that inc,due adjustments for volume transportation rates and for
quantity discounts. - Answer- True
WIP inventories are - Answer- Associated with manufacturing
If demand DECREASES by 13% and the value of each unit DECREASES by 13%, what
will happen to the EOQ? (Assume that everything else remains the same). - Answer-
The EOQ will remain the same
Using Wilson's EOQ formula, what will happen to the average inventory level (Q/2) if
unit cost is DECREASED by 4.1% and annual demand is INCREASED by 4.1% at the
same ti Every? - Answer- (Q/2) will increase
Assuming the cost to place an order is constant, all other things remaining the same,
INCREASING the order quantity (Q) causes total ANNUAL ordering costs to: - Answer-
Decrease
Other things being equal, HIGH inventory carrying costs will tend to lead to: - Answer-
B, C, and D
Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory
turns from 1 to 2. - Answer- False
Each of the following is an inventory holding cost EXCEPT: - Answer- Accounting cost
EOQ models exist that inc,due adjustments for volume transportation rates and for
quantity discounts. - Answer- True
If you were to "manage" Wilson's EOQ as a means of reducing your company
inventories, which variable of Wilson's EOQ would make the most sense to change. -
Answer- Ordering cost.
By using the latest information technology it is possible to substitute information for
inventory and other logistics expenses. - Answer- True
Managers have server all options for software development and implementation. They
include: - Answer- All of these answers
