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Exam 11: Inventory Management

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Question 61

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The optimal stocking decision in inventory management,when using marginal analysis,occurs at the point where the benefits derived from carrying the next unit are more than the costs for that unit.

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Question 62

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Which of the following are fixed-time period inventory models?

A) The EOQ model
B) The least cost method
C) The Q model
D) Periodic system model
E) Just-in-time model

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Question 63

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If demand for an item is normally distributed we plan for demand to be twice the average demand and carry 2 standard deviations worth of safety stock inventory.

The "sawtooth effect," is named after the jagged shape of the graph of inventory levels over time.

Using the fixed-time period inventory model,and given an average daily demand of 300 units,4 days between inventory reviews,5 days for lead time,1,200 units of inventory on hand,a "z" of 1.96,and a standard deviation of demand over the review and lead time of 12 units,what quantity should be ordered? ________________________

Which of the following is not one of the categories of manufacturing inventory?

Assuming no safety stock,what is the reorder point (R)given an average daily demand of 100 units and a lead time of 5 days? __________________________________

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand,which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?