Question 1

Variable or dynamic information changes with each transaction and includes:

Accepted Answer

Variable or dynamic information refers to data that changes with each transaction, such as quantities ordered, issued, and received.

Question 2

What is the purpose of safety stock?

Accepted Answer

Safety stock is intended to protect against uncertainty in supply and demand.
Uncertainty may occur in two ways: quantity uncertainty and timing uncertainty. Carrying extra stock or safety stock is a way to protect against uncertainty along with ordering early.

Question 3

The cost of stockout varies depending on:

Accepted Answer

The cost of stockout can vary based on customer expectations, competitive landscape, the specific market being served, and the particular item in question.

Question 4

Order quantity is 1,000 units and safety stock is 300 units. What is the average annual inventory?

Accepted Answer

The answer of Order quantity is 1,000 units and safety...

Question 5

An objective of a distribution inventory management system is:

Accepted Answer

The primary objective of a distribution inventory management system is to ensure that the required level of customer service is provided by having the right products available at the right time and place.

Question 6

The advantage of a centralized system is:

Accepted Answer

Coordination between factory, central supply, and distribution center needs is an advantage of a centralized system.

Question 7

The two- bin system is a simple way of keeping control of____________ items because they are of low value.

Accepted Answer

The two-bin system is typically used for C items, which are low-value items in inventory management.

Question 8

Permanent or static inventory includes data such as:

Accepted Answer

Permanent or static inventory includes data such as part number, name, description, order point, quantity, lead time, and safety stock.

Question 9

What is the service level and what does it mean?

Accepted Answer

The answer of What is the service level and what...

Question 10

In a centralized system:

Accepted Answer

In a centralized system, inventory management focuses on replenishing stock that has been sold and accommodating special situations, rather than decentralizing forecasting or involving distribution centers in decision-making.

Question 11

Distribution inventory management systems can be classified as:

Accepted Answer

Distribution inventory management systems can be classified into decentralized, centralized, and Distribution Requirements Planning (DRP) systems, covering all three options.

Question 12

Given the following actual demands for a 10- week period, calculate the average x- bar of the distribution. $\begin{array} { l c } 
\text {Period}\
\text {Actual}\
\text {demand}\
1 & 1200 \ 2 & 1000 \ 3 & 800 \ 4 & 900 \ 5 & 1400 \ 6 & 1100 \ 7 & 1100 \ 8 & 700 \ 9 & 1000 \ 10 & 800 \end{array}$

Accepted Answer

The answer of Given the following actual demands for a...

Question 13

In the order point system, an order is placed when:

Accepted Answer

In the order point system, an order is placed when the quantity on hand falls to a predetermined order point to ensure that stock is replenished before it runs out.

Question 14

What is distribution requirements planning?

Accepted Answer

The answer of What is distribution requirements planning?...

Question 15

Planned order releases from the various distribution centers become the ________to the material plan of central supply in DRP.

Accepted Answer

Planned order releases from distribution centers serve as the input to the material plan of central supply in Distribution Requirements Planning (DRP).

Question 16

Demand is 200 units a week, the lead time is 3 weeks, and safety stock is 300 units. Calculate the order point.

Accepted Answer

The answer of Demand is 200 units a week, the...

Question 17

The forecast interval is 4 weeks and the lead time interval is 2 weeks. Sigma for the forecast interval is 150 units. Calculate the standard deviation for the lead time interval.

Accepted Answer

The answer of The forecast interval is 4 weeks and...

Question 18

The kanban system is a simply system that signals the need for less product.

Accepted Answer

The kanban system signals the need for more product or materials to be produced or moved, not less.

Question 19

Why do stickouts cost money?

Accepted Answer

The answer of Why do stickouts cost money?...

Question 20

Describe how the standard deviation is calculated.

Accepted Answer

The answer of Describe how the standard deviation is calculated....

Quiz 11: Independent Demand Ordering Systems