operations management final exam review`

work-in-process inventory is devoted to maintenance, repair, and operating materials

true or false

false

for which corporate strategy (ies) should supply chain inventory be minimized

a) low cost

b) response

c) low cost and response

d) low cost and differentiation

low cost and diffrentiation

outsourcing:

a) transfers traditional internal activities to outside vendors

b) utilizes the efficiency that comes with specialization

c) allows the outsourcing firm to focus on its key success factors

d) all of the above are true of outsourcing

all of the above are true for outsourcing

which of the following is NOT one of the six sourcing strategies?

a) negotiation with many suppliers

b) vertical integration

c) keiretsu

d) short-term relationships with few suppliers

short-term relationships with few suppliers

a disadvantage of the “few suppliers” sourcing strategy is:

a) the risk of not being ready for technological change

b) the lack of cost savings for customers and suppliers

c) possible violations of the sherman antitrust act

d) the high cost of changing partners

e) the suppliers are less likely to understand the broad objectives of the procuring firm and the end customer

the high cost of changing partners

which sourcing strategy is particularly common when the products being sourced are commodities?

a) few suppliers

b) many suppliers

c) keiretsu

d) vertical integration

e) virtual companies

many suppliers

when chrysler and bmw pooled resources to develop standardized auto componnents, the sourcing strategy could be described by which of the following?

a) keiretsu

b) virtual companies

c) joint venture

d) vertical integration

e) few suppliers

joint venture

which of the following is NOT one of the four main types of inventory?

a) raw material inventory

b) work-in-process inventory

c) maintenance/repair/operating supply inventory

d) safety stock inventory

e) finished-goods inventory

safety stock inventory

all EXCEPT which of the following statements about abc analysis is true?

a) in the abc analysis, inventory may be categorized by measures other than dollar volume

b) abc categorizes on-hand inventory into three groups based on annual dollar volume

c) abc analysis is an application of the pareto principle

d) abc analysis suggests that all items require the same high degree of control

e) abc analysis suggests that there are the critical few and the trivial many inventory items

abc analysis suggests that all items require the same high degree of control

abc analysis divides on-hand inventory into three classes, generally based upon which of the following?

a) item quality

b) unit price

c) the number of units on hand

d) annual demand

e) annual dollar volume

annual dollar value

what is the primary purpose of the basic economic order quantity model shown below?

q*=

a) to calculate the reorder point, so that replenishments take place at the proper time

b) to maximize the sum of carrying cost and holding cost

c) to maximize the customer service level

d) to minimize the sum of setup cost and holding cost

e) to calculate the optimum safety stock

to minimize the sum of setup cost and holding cost

a certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. annual demand is 10,000 units, and the order cost is $150 per order. what is the approximate economic order quantity?

a) 16

b) 70

c) 110

d) 183

e) 600

110

in the basic eqq model, if d=6000 per year, s = $100, and holding cost = $5 per unit per month, what is the economic order quantity?

a) 24

b) 100

c) 141

d) 490

e) 600

141

for a certain item, the cost-minimizing order quantity obtained with the basic eqq model is 200 units, and the total annual carrying cost is $600. what is the inventory carrying cost per unit per year for this item?

a) $1.50

b) $2.00

c) $6.00

d) $150.00

e) not enough data to determine

$6.00

a product has a demand of 4000 units per year. ordering cost is $20, and holding cost is $4 per unit per year. the eqq model is appropriate. the cost-minimizing solution for this product will cost ______ per year in total annual inventory (holding and setup) costs.

a) $400

b) $800

c) $1200

d) zero; this is a class c item

e) cannot be determined because the unit price is not known

$800

the assumptions of the production order quantity model are, met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 per unit per year, the daily demand rate is 10 and the daily production rate is 100. what is the production order quantity for this problem?

a) 139

b) 174

c) 184

d) 365

e) 548

184

which of the following would NOT generally be a motive for a firm to hold inventories?

a) to decouple various parts of the production process

b) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand

c) to take advantage of quantity discounts

d) to minimize holding costs

e) to hedge against inflation

to minimize holding costs

a major challenge in inventory management is to maintain a balance between inventory investment and customer service

a) true

b) false

true

one function of inventory is to take advantage of quantity discounts.

a) true

b) false

true

in the production order quantity (pqq) model, inventory does not arrive in a single moment but flows in a steady rate, resulting in a larger production/order quantity than in an otherwise identical eqq problem.

a) true

b) false

true