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OSCM 373 Exam 4(Chapters 13, 9, & 10) questions well answered to pass
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OSCM 373 Exam 4(Chapters 13, 9, & 10) questions well answered to pass
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OSCM 373 Exam 4(Chapters 13, 9, & 10)Objectives of Inventory Management - correct answer ✔✔1. Satisfactory levels of customer service
2. While keeping inventory costs (ordering & carrying) within reasonable bounds (minimize)
Performance Measures - correct answer ✔✔1. Customer satisfaction (# & quantity of backorders,
customer complaints)
2. Keeping costs low (inventory turnover, = ratio of average cost of goods sold to average inventory
investment during a period)
ABC Classification System - correct answer ✔✔Classifying inventory according by importance, and
allocating control efforts accordingly
1. A items (10%-20% of the # of items in inventory, about 60%-70% of the annual $ value)
2. B items (moderately important)
3. C items (50%-60% of the # of items in inventory but only about 10%-15% of the annual $ value)
Periodic Tracking System - correct answer ✔✔Physical count of items in inventory made at periodic
intervals (many items ordered at the same time, savings is processing and shipping of orders)
Perpetual Tracking System - correct answer ✔✔System that keeps track of removals from inventory
continuously thus monitoring current levels of each item
Holding Cost of Inventory - correct answer ✔✔Cost to carry an item in inventory for length of time,
usually a year (rent)
Ordering Cost of Inventory - correct answer ✔✔The costs involved in placing an order (for preparing
equipment for a job)
Finding the Re-Order Point - correct answer ✔✔1. the rate of demand
2. the lead time equals time interval between ordering and receiving the order
, 3. the extent of demand and/or lead time variability
4. the degree of stockout risk acceptable to management
ROP=L x R
Calculating the Economic Order Quantity (EOQ) - correct answer ✔✔Assumptions: non-perishable items,
continuous inventory control, no variability, orders can be placed at anytime
√2xDxS/H
Calculating Total Cost - correct answer ✔✔TC=H*Q/2+S*D/Q
Single Period Model - correct answer ✔✔Model for ordering for perishables and other items with
limited useful lives, the goal is to identify an order quantity that will maximize profit = minimize the long
run excess and shortage costs
Shortage Cost (marginal benefit) - correct answer ✔✔Generally the unrealized profit per unit, Cs=
revenue per unit - cost per unit
Excess Cost (marginal cost) - correct answer ✔✔Different between purchase cost and salvage value of
items left over at the end of the period, Ce= cost per unit - salvage value premium
Calculating Optimal Service Level - correct answer ✔✔Service level equals probability that demand will
not exceed the stocking level
Continuous Demand - correct answer ✔✔One reason for scheduling material first
Discrete Demand - correct answer ✔✔The probability of occurrence of each value of a discrete random
variable
Quality - correct answer ✔✔The ability of a product or service to consistently meet or exceed customer
expectations
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