SCMN 3730 Exam 3 Questions and Answers Graded A 2024
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Course
SCMN 3730
Institution
SCMN 3730
What types of problems can be hidden by high inventory levels?
a. poor material quality
b. inaccurate demand-forecasting systems
c. unreliable supplier delivery
d. all of the above
e. none of the above
f. a and b -Correct Answer all of the above
Items purchased from suppliers or produced...
SCMN 3730 Exam 3 Questions and
Answers Graded A 2024
What types of problems can be hidden by high inventory levels?
a. poor material quality
b. inaccurate demand-forecasting systems
c. unreliable supplier delivery
d. all of the above
e. none of the above
f. a and b -Correct Answer ✔all of the above
Items purchased from suppliers or produced internally to directly go into production
requirements. It includes items purchased in bulk or unfinished condition. Examples
include bulk quantities of chemicals, resins, or petroleum.
Semifinished inventory include those items used as inputs during the final product
process (examples: computer chips, wiring harness sub-assemblies)
a. finished goods
b. raw materials/components
c. work in process -Correct Answer ✔raw materials/components
At any given point in time, this is the sum total of inventory within all manufacturing
process centers. If ______ increases over a certain level, this may indicate production
bottlenecks or delays
a. finished goods
b. raw materials/components
c. work in process -Correct Answer ✔work in process
_________ inventory includes completed items or products that are available for
shipment or future customer orders
a. finished goods
b. raw materials/components
c. work in process -Correct Answer ✔finished goods
Includes the items used to support production and operations, these items are not
physically part of a finished product but are critical for the continuous operation of plant,
equipment, and offices
ex: manufacturing spare parts, tools, office supplies, and computers -Correct Answer
✔MRO inventory
SCMN 3730 Exam 3
,SCMN 3730 Exam 3
What does "MRO" stand for? -Correct Answer ✔Maintenance, repair, and operating
supplies
___________ measures how many times a year a company needs to replace its
average inventory to support sales volume -Correct Answer ✔Inventory turns
(AKA turnover)
T/F:
Smaller "turn" numbers show efficient use to the company's capital or investment in
inventory -Correct Answer ✔False
(HIGHER "turn" numbers show efficient use to the company's capital or investment in
inventory)
T/F:
A small number of "turns" implies weak sales and/or excessive inventory -Correct
Answer ✔True
= annual sales / average value of inventory -Correct Answer ✔inventory turns =
When firms produce goods in anticipation of future customer orders. They expect to
hold finished inventory in anticipation of future demand
EX: Apple -Correct Answer ✔Make to Stock (MTS)
When firms produce goods in response to a customer order
EX: Tesla, Viking Sports Boats -Correct Answer ✔Make to Order (MTO)
These are components of what?
1. capital cost
2. taxes
3. insurance
4. obsolescence
5. storage -Correct Answer ✔Inventory carrying costs
Out of all the components for Inventory Carrying Costs, which one has a range of 0 to
4%?
a. capital cost
b. taxes
c. insurance
d. obsolescence
e. storage
f. b and d -Correct Answer ✔storage
Out of all the components for Inventory Carrying Costs, which one has a range of 0 to
2%?
SCMN 3730 Exam 3
, SCMN 3730 Exam 3
a. capital cost
b. taxes
c. insurance
d. obsolescence
e. storage
f. b and d -Correct Answer ✔insurance
Out of all the components for Inventory Carrying Costs, which one has a range of 8 to
40%?
a. capital cost
b. taxes
c. insurance
d. obsolescence
e. storage
f. b and d -Correct Answer ✔capital cost
Out of all the components for Inventory Carrying Costs, which one has a range of 0.5 to
2%?
a. capital cost
b. taxes
c. insurance
d. obsolescence
e. storage
f. b and d -Correct Answer ✔b and d
= AI x P x ACC -Correct Answer ✔Inventory carrying cost =
(AI = average inventory in units
P = unit price
ACC = carrying cost per year (%))
Are these RIGHT or WRONG reasons for investing in inventory?
-avoid disruptions in operational performance
-support operational requirements
-support customer service requirements
-hedge against marketplace uncertainty
-take advantage of order quantity discounts -Correct Answer ✔Right reasons
Are these RIGHT or WRONG reasons for investing in inventory?
-poor quality and material yield
-unreliable supplier delivery
-extended order-cycle times from global sourcing
-inaccurate or uncertain demand forecasts
-specifying custom items for standard application
SCMN 3730 Exam 3
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