Production and Operations Management
171. Cycle counting
- Provides a measure of inventory turnover.
- Assumes that all inventory records must be verified with the same frequency.
- Cannot be done in an independent demand situation.
- Is a process by which inventory records are verified.
Correct answer: (D)
Is a process by which inventory records are verified.
172. Policies based on ABC analysis might include investing
- More in inventory security for C items.
- More in supplier development for A items.
- The most time and effort verifying the accuracy of records for B items.
- Extra care in forecasting for C items.
Correct answer: (B)
More in supplier development for A items.
173. Higher demand uncertainty provides higher savings by pooling which of the following inventory?
- Seasonal inventory
- Pipeline inventory
- Safety inventory
- Decoupling inventory
Correct answer: (C)
Safety inventory
174. The two most important inventory-based questions answered by the typical inventory model are
- When to place an order and what is the cost of the order.
- When to place an order and how many of an item to order.
- How many of an item to order and with whom the order should be placed.
- How many of an item to order and what is the cost of this order.
Correct answer: (B)
When to place an order and how many of an item to order.
175. Cycle inventory helps in
- Taking care of any special event that does not occur on a regular basis
- Taking care of uncertainty in demand and supply of products/components
- Finding out the amount of stock required during a finite period in order to move the materials from one location to another
- Taking advantage of economies of scale and reducing cost within the supply chain
Correct answer: (D)
Taking advantage of economies of scale and reducing cost within the supply chain
176. Centralized system will provide benefits for the items which
- Are fast-moving
- Are slow moving and have high demand variability
- Have low demand variability
- Have high demand variability
Correct answer: (B)
Are slow moving and have high demand variability
177. The difference(s) between the basic EOQ model and the production order quantity model is (are) that
- The production order quantity model does not require the assumption of known, constant demand.
- There are no holding costs in the production order quantity model.
- The production order quantity model does not require the assumption of instantaneous delivery.
- The eoq model does not require the assumption of known, constant lead time.
Correct answer: (C)
The production order quantity model does not require the assumption of instantaneous delivery.
178. The inventory which is dependent on alternative modes of transportation is known as
- Safety inventory
- Pipeline inventory
- Decoupling inventory
- Seasonal inventory
Correct answer: (B)
Pipeline inventory
179. Inventory record accuracy would be decreased by
- Abc analysis.
- Increasing stockroom accessibility.
- Cycle counting.
- reorder points.
Correct answer: (B)
Increasing stockroom accessibility.
10. A system that keeps track of each withdrawal or addition to inventory continuously is
- A perpetual inventory system.
- A continuous inventory system.
- A fixed period system.
- A fixed quantity system.
Correct answer: (A)
A perpetual inventory system.