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ISDS FINAL EXAM QUESTIONS AND ANSWERS VERIFIED A.
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ISDS FINAL EXAM QUESTIONS AND ANSWERS VERIFIED A.
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ISDS FINAL EXAM QUESTIONS ANDANSWERS VERIFIED A.
Which of the following would NOT generally be a motive for a firm to hold
inventories?
A. to hedge against inflation
B. to decouple various parts of the production process
C. to minimize holding costs
D. to provide a selection of goods for anticipated customer demand and to
separate the firm from fluctuations in that demand
E. to take advantage of quantity discounts
Verified Answer -C. to minimize holding costs
Which of the following is an element of inventory holding costs?
A. pilferage, scrap, and obsolescence
B. material handling costs
C. investment costs
D. housing costs
E. All of the above are elements of inventory holding costs.
Verified Answer -E. All of the above are elements of inventory holding costs.
In the basic EOQ model, if D = 6000 per year, S = $100, and holding cost = $5
per unit per month, what is the economic order quantity?
,A. 100
B. 600
C. 141
D. 490
E. 24
Verified Answer -C. 141
The assumptions of the production order quantity model are met in a
situation where annual demand is 3650 units, setup cost is $50, holding cost
is $12 per unit per year, the daily demand rate is 10 and the daily production
rate is 100. What is the production order quantity for this problem?
A. 184
B. 548
C. 365
D. 139
E. 174
Verified Answer -A. 184
Which of the following statements about quantity discounts is FALSE?
A. In inventory management, item cost becomes relevant to order quantity
decisions when a quantity discount is available.
, B. If carrying costs are expressed as a percentage of value, EOQ is larger at
each lower price in the discount schedule.
C. The cost-minimizing solution may or may not be where annual holding
costs equal annual ordering costs.
D. The larger the annual demand, the less attractive a discount schedule will
be.
E. The smaller the ordering cost, the less attractive a discount schedule will
be.
Verified Answer -D. The larger the annual demand, the less attractive a
discount schedule will be.
An advantage of the fixed-period inventory system is that:
A. safety stock will be lower than it would be under a fixed-quantity
inventory system.
B. there is no physical count of inventory items when an item is withdrawn.
C. no inventory records are required.
D. the average inventory level is reduced.
E. orders usually are for smaller order quantities.
Verified Answer -B. there is no physical count of inventory items when an
item is withdrawn.
Which of the following statements about aggregate planning is TRUE?
A. A disadvantage of subcontracting is that it may require skills or
equipment outside the firm's areas of expertise.
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