Question 1

Another name for safety stock is ___________ stock.

Accepted Answer

Buffer stock is another term for safety stock, which is inventory kept on hand to protect against variability in demand or supply.

Question 2

The economic order quantity EOQ)determines ___________.

Accepted Answer

The Economic Order Quantity (EOQ) model determines the optimal order quantity by finding the point at which carrying costs equal ordering costs, minimizing the total inventory costs.

Question 3

Each of the following is a component of inventory carrying cost except:

Accepted Answer

Accounting cost is not considered a component of inventory carrying cost. Inventory carrying costs typically include storage costs (such as warehousing and materials handling), shrinkage cost (loss of inventory due to theft, damage, or obsolescence), and interest cost (the cost of capital tied up in inventory). Accounting costs, while related to managing finances, are not directly tied to the physical holding or maintenance of inventory.

Question 4

Holding low levels of inventory results in ___________ inventory carrying costs and ___________ stockout costs.

Accepted Answer

Holding low levels of inventory leads to lower inventory carrying costs because there is less inventory to store, insure, and manage. However, it increases the risk of stockouts, leading to higher stockout costs due to potential lost sales and customer dissatisfaction.

Question 5

The economic order quantity EOQ)deals with calculating the proper order size with respect to ___________ costs and ___________ costs.

Accepted Answer

EOQ focuses on minimizing the total of carrying costs (associated with holding inventory) and ordering costs (related to replenishing inventory).

Question 6

Which of the following situations is likely the most damaging costly)with respect to a stockout?

Accepted Answer

When a customer goes to a competitor for a purchase due to a stockout, it is likely the most damaging situation. This not only results in a lost sale but also risks losing the customer to the competitor in the long term, potentially affecting future revenue and market share.

Question 7

Inventory costs in the United States in the twenty-first century represent approximately ___________ of total logistics costs.

Accepted Answer

Inventory costs in the United States in the twenty-first century represent approximately one-third of total logistics costs. This reflects the significant investment companies make in maintaining inventory to meet customer demand, manage production schedules, and ensure supply chain efficiency.

Question 8

___________ stock is carried to stimulate demand.

Accepted Answer

Psychic stock is carried to stimulate demand by creating an impression of abundance, encouraging customers to buy.

Question 9

With respect to determining the average cost of a stockout,the higher the probability of a delayed sale,the ___________ the average stockout costs and the ___________ the inventory that needs to be held.

Accepted Answer

The answer of With respect to determining the average cost...

Question 10

Holding high levels of inventory results in ___________ inventory carrying costs and ___________ stockout costs.

Accepted Answer

Holding high levels of inventory increases the costs associated with storing and managing the inventory, leading to higher inventory carrying costs. However, it reduces the likelihood of running out of stock, thus lowering stockout costs.

Question 11

___________ refers to stocks of goods and materials that are maintained for many purposes,the most common being to satisfy normal demand patterns.

Accepted Answer

Inventory refers to the stocks of goods and materials that organizations keep to satisfy normal demand patterns, among other purposes. It is a key component in managing supply and demand within a business.

Question 12

Under conditions of certainty,a reorder point is equal to ___________.

Accepted Answer

Under conditions of certainty, the reorder point is equal to the average daily demand times the length of the replenishment cycle. This calculation ensures that new stock is ordered just in time to replenish the inventory as it runs out, assuming demand and lead time are constant and known.

Question 13

___________ stock refers to inventory that is held for several reasons,to include seasonal demand,projected price increases,and potential shortages of product.

Accepted Answer

Speculative stock refers to inventory that is held in anticipation of market changes, such as seasonal demand, projected price increases, or potential shortages. This type of stock is kept as a speculative measure to take advantage of expected market conditions.

Question 14

___________ stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.

Accepted Answer

Buffer stock is held in addition to cycle stock to guard against uncertainty in demand and/or lead time, providing a buffer against variability.

Question 15

In the United States,___________ has traditionally provided a convenient starting point when estimating the interest charges associated with maintaining inventory.

Accepted Answer

The prime rate of interest is traditionally used as a starting point for estimating the interest charges associated with maintaining inventory in the United States because it is a benchmark interest rate used by banks to set rates on many consumer loan products.

Question 16

Which of the following costs is not a component of ordering order)costs?

Accepted Answer

Ordering costs typically include expenses related to preparing invoices, receiving orders, and verifying inventory availability. Transporting orders, however, is considered a part of logistics and distribution costs, not ordering costs.

Question 17

___________ stock refers to inventory that is en route between various nodes in a logistics system.

Accepted Answer

Pipeline stock refers to inventory that is currently being transported between locations in a supply chain, such as from a supplier to a warehouse or from a warehouse to a retail store.

Question 18

Inventory shrinkage ___________.

Accepted Answer

Inventory shrinkage refers to the discrepancy between the actual physical count of inventory and the amount recorded in the inventory system. This often occurs due to theft, damage, or errors in recording inventory movements, leading to more items being recorded as entering than actually leaving warehousing facilities.

Question 19

Inventory carrying costs in the United States since 2010 have ranged between ___________ and ___________ percent.

Accepted Answer

The answer of Inventory carrying costs in the United States...

Question 20

___________ stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

Accepted Answer

The answer of ___________ stock refers to inventory that is...

Quiz 8: Inventory Management

Another name for safety stock is ___________ stock.

The economic order quantity EOQ) determines ___________.

Each of the following is a component of inventory carrying cost except:

Holding low levels of inventory results in _ inventory carrying costs and _ stockout costs.

The economic order quantity EOQ) deals with calculating the proper order size with respect to _ costs and _ costs.

Which of the following situations is likely the most damaging costly) with respect to a stockout?

Inventory costs in the United States in the twenty-first century represent approximately ___________ of total logistics costs.

___________ stock is carried to stimulate demand.

With respect to determining the average cost of a stockout,the higher the probability of a delayed sale,the _ the average stockout costs and the _ the inventory that needs to be held.

Holding high levels of inventory results in _ inventory carrying costs and _ stockout costs.

___________ refers to stocks of goods and materials that are maintained for many purposes,the most common being to satisfy normal demand patterns.

Under conditions of certainty,a reorder point is equal to ___________.

___________ stock refers to inventory that is held for several reasons,to include seasonal demand,projected price increases,and potential shortages of product.

___________ stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.

In the United States,___________ has traditionally provided a convenient starting point when estimating the interest charges associated with maintaining inventory.

Which of the following costs is not a component of ordering order) costs?

___________ stock refers to inventory that is en route between various nodes in a logistics system.

Inventory shrinkage ___________.

Inventory carrying costs in the United States since 2010 have ranged between _ and _ percent.

___________ stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

Quiz 8: Inventory Management

Another name for safety stock is ___________ stock.

The economic order quantity EOQ) determines ___________.

Each of the following is a component of inventory carrying cost except:

Holding low levels of inventory results in ___________ inventory carrying costs and ___________ stockout costs.

The economic order quantity EOQ) deals with calculating the proper order size with respect to ___________ costs and ___________ costs.

Which of the following situations is likely the most damaging costly) with respect to a stockout?

Inventory costs in the United States in the twenty-first century represent approximately ___________ of total logistics costs.

___________ stock is carried to stimulate demand.

With respect to determining the average cost of a stockout,the higher the probability of a delayed sale,the ___________ the average stockout costs and the ___________ the inventory that needs to be held.

Holding high levels of inventory results in ___________ inventory carrying costs and ___________ stockout costs.

___________ refers to stocks of goods and materials that are maintained for many purposes,the most common being to satisfy normal demand patterns.

Under conditions of certainty,a reorder point is equal to ___________.

___________ stock refers to inventory that is held for several reasons,to include seasonal demand,projected price increases,and potential shortages of product.

___________ stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.

In the United States,___________ has traditionally provided a convenient starting point when estimating the interest charges associated with maintaining inventory.

Which of the following costs is not a component of ordering order) costs?

___________ stock refers to inventory that is en route between various nodes in a logistics system.

Inventory shrinkage ___________.

Inventory carrying costs in the United States since 2010 have ranged between ___________ and ___________ percent.

___________ stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

Holding low levels of inventory results in _ inventory carrying costs and _ stockout costs.

The economic order quantity EOQ) deals with calculating the proper order size with respect to _ costs and _ costs.

With respect to determining the average cost of a stockout,the higher the probability of a delayed sale,the _ the average stockout costs and the _ the inventory that needs to be held.

Holding high levels of inventory results in _ inventory carrying costs and _ stockout costs.

Inventory carrying costs in the United States since 2010 have ranged between _ and _ percent.