One use of inventory is

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to ensure that item price is maximized.

You are watching: The proper quantity of safety stock is typically determined by

to provide a hedge against inflation.
to tightly link production and also distribution processes.
to tightly link a firm"s manufacturing with its customers" demand also.

ABC evaluation divides an organization"s on-hand also inventory into three classes based upon

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annual dollar volume.
annual demand also.
the variety of units on hand.
unit price.

Cycle counting

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is a procedure whereby inventory documents are verified.
provides a measure of inventory turnover.
assumes that all inventory documents must be verified via the same frequency.
cannot be done in an independent demand also case.

The difference(s) in between the fundamental EOQ model and also the manufacturing order quantity model is (are) that

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tbelow are no holding costs in the manufacturing order amount version.
the EOQ model does not need the assumption of well-known, constant lead time.
the manufacturing order amount design does not need the assumption of instantaneous shipment.
the manufacturing order quantity version does not require the assumption of well-known, constant demand also.

Extra systems that are organized in inventory to minimize stockouts are called

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demand variance.
just-in-time inventory.
reorder allude.
safety stock.

Inventory record accuracy would certainly be decreased by

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cycle counting.
ABC evaluation.
increasing stockroom ease of access.
reorder points.

The 2 a lot of necessary inventory-based inquiries answered by the typical inventory design are

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when to place an order and also what is the price of the order.
exactly how many kind of of an object to order and what is the expense of this order.
when to location an order and also how many type of of a things to order.
just how many kind of of an item to order and via whom the order have to be placed.

The appropriate level of safety stock is frequently determined by

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choosing the level of safety and security stock that assures a offered company level.
taking the square root of the financial order quantity.
delivering enough safety and security stock so regarding remove all stockouts.
minimizing meant stockout expense.

Which of the following is NOT a kind of inventory?

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raw material
work-in-process
MRP
finimelted goods

In the probabilistic version, increasing the business level will

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reduce the expense of the inventory plan.
rise the expense of the inventory policy.
cannot be identified.
have actually no impact on the expense of the inventory policy.

A system that triggers ordering on a uniform time basis is referred to as a

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fixed-quantity device.
reorder point mechanism.
EOQ.
fixed-duration device.

A firm wishes to recognize the EOQ for an object that has actually an annual demand of 2,000 units, a price per order of $75, and also annual transferring price of $7.50 per unit. What is the EOQ?

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73
200 units
40,000 units
100

A production facility is trying to recognize the best batch dimension for an object that is produced intermittently. This item has an yearly demand also of 1,000 systems, an annual transporting price of $10 per unit, and a setup cost of $400. They run 50 weeks per year, and can produce 40 systems per week. What is the best batch dimension for this item?
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65
400
283
800

A save desires to ensure a shelf complete of marshmenable peeps as the holiday seachild ideologies. Daily demand also for peeps is commonly spread through a expect of 25 and a standard deviation of 5. Lead time is 3 days and the keep intends a 98% company level. What is their reorder point?

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107
93
87
75

A manufacturing facility is trying to expand production on a machine that is currently used to develop one part. This item has actually an annual demand of 1,000 units, an yearly transporting price of $10 per unit, and a setup cost of $400. They operate 50 weeks per year, and also can develop 40 systems per week. What portion of the time are they making use of this machine?
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50%
30%
40%
20%

Policies based on ABC evaluation could include investing

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more in supplier advance for A items.
additional care in forespreading for C items.
the the majority of time and effort verifying the accuracy of documents for B items.
more in inventory defense for C items.

A system that keeps track of each withdrawal or enhancement to inventory repeatedly is

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a perpetual inventory system.
a resolved period mechanism.
a solved quantity device.

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a constant inventory device.
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