Deck 6: Inventory Planning and Control

Question 1

Inventory planning and control refers to the process that any organization adopts to determine the optimal quantity as well as the timing of inventory.

Answer 1

True

Question 2

Independent demand is demand for demand for a finished product.

Answer 2

True

Question 3

Independent demand is demand for a component part or subassembly.

Answer 3

False

Question 4

A typical channel of distribution is comprised of:

A) Producer
B) Wholesaler
C) Retailer
D) All the above

Question 5

Which of the following is not a main type of inventory?

A) Raw materials
B) Work-in-progress
C) Semi-finished goods
D) Maintenance, Repair and Overhaul

Question 6

All the following are inventory classifications with the exception of:

A) Cycle
B) Safety
C) Psychic
D) Batch

Question 7

Inventory held for several reasons, including seasonal demand, project price adjustments or potential product shortages is_________ inventory.

A) Safety
B) Pipeline
C) Speculative
D) Dead

Question 8

Cost that are associated with storing inventory that remains unsold are

A) Purchase cost
B) Ordering cost
C) Carrying cost
D) Set-up cost

Question 9

Warehouse cost and maintenance charges generally include four categories; handling expenses, physical storage expenses, operational administration, and ______________.

A) Transportation expenses
B) Physical storage expenses
C) Insurance expenses
D) None of the above

Question 10

____________ cost is the loss of inventory through employee theft, shoplifting, and administrative error.

A) Pilferage
B) Shrinkage
C) Relocation
D) A and B

Question 11

Expenses incurred to create and process an order to a supplier are _________ cost.

A) Administrative
B) Carrying
C) Ordering
D) Payment

Question 12

Setup cost are comprised of both fixed and variable cost.

Question 13

_______ is a set point designed to help organizations minimize the cost of ordering and holding inventory.

A) JIT
B) ERP
C) MIS
D) EOQ

Question 14

Which of the following is not an assumption of EOQ?

A) Demand is known and constant.
B) lead time is known and constant.
C) Quantity discounts are possible.
D) receipt of inventory in instantaneous.

Question 15

Which ordering system has inventory continuously monitored and replenishment stock is ordered when at-hand stock falls to established fixed quantities.

A) Fixed order quantity system
B) Fixed order interval system
C) Re-order point system
D) Safety order system

Question 16

Which ordering system evaluates stock levels and a periodic schedule of fixed order is developed?

A) Fixed order quantity system
B) Fixed order interval system
C) Re-order point system
D) Safety order system

Question 17

Which ABC analysis system categorization item is tightly controlled and requires accurate records?

A) A
B) B
C) C
D) E

Question 18

_______________ is a ratio that measures the number of times inventory is sold or consumed in a given period.

A) Stock runs
B) Inventory turnover
C) Inventory accuracy
D) None of the above

Question 19

All the following are methods through which inventory accuracy can be improved except.

A) Physical inventory
B) Process improvement
C) Cycle counting
D) Transaction increase

Question 20

An inventory technique in which the supplier of a product takes full responsibility for optimizing and maintaining the inventory held by the buyer is.

A) EOQ
B) VMI
C) EOB
D) APS