Question 1

The period of time that begins when an item is at its highest desired stocking level,continues as the item is used or sold,and ends when the item is replenished is known as

Accepted Answer

The inventory cycle refers to the period from when an item is at its highest stocking level, through its usage or sale, until it is replenished.

Question 2

The period of time from order placement until goods are received is known as which of the following?

Accepted Answer

Lead time is the period from when an order is placed until the goods are received.

Question 3

Maintaining a balance between ____ and ____ is part of the difficult job of controlling inventory.

Accepted Answer

Maintaining a balance between ordering costs and holding costs is crucial in inventory management to minimize total costs and ensure efficient operations.

Question 4

Sally owns and operates an in-home daycare business,where she is the only employee.She provides all meals and snacks to the kids that she takes care of.What type of food inventory control method should she adopt?

Accepted Answer

Visual control is suitable for small-scale operations like Sally's daycare, where she can easily monitor food supplies and restock as needed without complex systems.

Question 5

Benjamin Wilson is the Distribution Manager of a small coffee company.He has found that about four percent of total inventory is lost due to product theft or spoilage.This is referred to as inventory

Accepted Answer

Inventory shrinkage refers to the loss of products between the point of manufacture or purchase from a supplier and the point of sale. This can be due to theft, spoilage, or errors, which aligns with the situation described.

Question 6

If ____ were the only inventory expense,a business would want to order as many items at a time as possible.

Accepted Answer

Ordering costs are the expenses associated with placing and receiving orders. If these were the only costs, ordering in bulk would minimize the frequency of orders and thus reduce total ordering costs.

Question 7

Small businesses with a narrow selection of items can get by with a/an ____ method of inventory control.

Accepted Answer

Visual control is suitable for small businesses with a narrow selection of items as it allows for simple, manual monitoring of inventory levels without the need for complex systems.

Question 8

A widget store sells 12,000 widgets per year and meets the qualifications outlined in the economic order quantity (EOQ)model.Ordering costs for widgets are $14 per order and holding costs are $0.50 per widget per year.How many orders per year should this business make?

Accepted Answer

The answer of A widget store sells 12,000 widgets per...

Question 9

The basic economic order quantity model assumes all but which of the following?

Accepted Answer

The basic economic order quantity (EOQ) model assumes that the average inventory level is equal to the maximum inventory level plus the minimum inventory level divided by two, not the minimum minus the maximum.

Question 10

A shoe business meets the qualifications for using the economic order quantity (EOQ)model.The business sells 20,000 pairs of shoes per year.Ordering costs for supplies are $12 per order.Holding costs are $0.96 per pair of shoes per year.What is the EOQ for this business?

Accepted Answer

The EOQ formula is √((2DS)/H), where D is demand (20,000), S is ordering cost ($12), and H is holding cost ($0.96). Plugging in these values gives √((2*20000*12)/0.96) = 707.11, which rounds to 708.

Question 11

A small businesses owner that sells little red wagons meets the qualifications outlined in the economic order quantity (EOQ)model.His store sells 800 little red wagons per year.When he orders little red wagons from his supplier,his ordering costs amount to $15.The little red wagons cost the owner $1.00 per wagon per year to hold in inventory.What is the owner's EOQ,and how many times per year should he order little red wagons from his supplier?

Accepted Answer

EOQ = sqrt((2*D*O)/H) = sqrt((2*800*$15)/$1) = 155Number of orders per year = D/EOQ = 800/155 = 5.16 (round up to 6)

Question 12

Inventory represents about ____ percent of a manufacturing firm's capital.

Accepted Answer

Inventory typically represents about 25 percent of a manufacturing firm's capital, reflecting the significant investment in raw materials, work-in-progress, and finished goods.

Question 13

____ becomes a problem for businesses in which styles,tastes,or technologies change quickly.

Accepted Answer

Obsolescence becomes a problem for businesses when styles, tastes, or technologies change quickly, as it refers to the process of becoming outdated or no longer used.

Question 14

Ordering costs tend to be ____ costs.

Accepted Answer

Ordering costs are typically fixed costs because they do not vary with the quantity of goods ordered. They are incurred each time an order is placed, regardless of the order size.

Question 15

____ refers to inventory that has been purchased but is not fit for sale due to damage or deterioration.

Accepted Answer

Spoilage refers to inventory that has been purchased but is not fit for sale due to damage or deterioration.

Question 16

The amount of an item that needs to be ordered is known as which of the following?

Accepted Answer

Reorder quantity refers to the amount of an item that needs to be ordered to replenish inventory to a desired level.

Question 17

____ begins with determining when inventory restocking is needed and how much inventory should be ordered.

Accepted Answer

Inventory cycle begins with determining when inventory restocking is needed and how much inventory should be ordered.

Question 18

If ____ were the only inventory expense,a business would want to order as few items at a time as possible.

Accepted Answer

The answer of If ____ were the only inventory expense,a...

Question 19

____ is a traditional method of inventory control that minimizes total inventory costs by balancing annual ordering costs and annual holding costs for an item.

Accepted Answer

The Economic Order Quantity (EOQ) is a traditional inventory control method that calculates the optimal order quantity to minimize the total costs of ordering and holding inventory.

Question 20

The time when a business needs to restock inventory is known as the ____.

Accepted Answer

The reorder point is the specific level of inventory at which a business needs to place a new order to replenish stock before it runs out.

Quiz 12: Small Business Marketing Product