1.The notion of an optimal inventory level implies that: There is a right amount of inventory for every product. Total costs can be reduced if a firm holds less-than-optimal amounts of inventory. It is preferable to hold more rather than less inventory. Less inventory is always better.

2. The key question inventory management is concerned with is: How much inventory do you need? How do you reduce inventory carrying costs? How do you move inventory faster through the supply chain? How do you price inventory for quick sale?

3. Inventory holding costs include which of the following? Machine downtime and retooling Physical warehousing charges The cost of building storage space (e.g., warehouses) Administrative processing costs

4. The inventory performance metric that measures how efficiently inventory moves through the supply chain is ___________. Inventory turnover In-stock rate Fill rate Dwell time

5. In the context of the EOQ model, the term "sawtooth" refers to which of the following? How aggressively managers are able to cut inventory levels The particular item that can be managed using the EOQ approach The basic tool used to build storage facilities The pattern of inventory consumption and replenishment over time

6. Which of the following does the basic EOQ model help inventory managers accomplish? Maximize revenues Maximize total logistics costs Minimize inventories Minimize the sum of inventory holding and order placement costs

7. The square root law of cycle stocks: Explains the reason for holding cycle stocks Explains why inventories increase less-than-proportionately with demand Shows why DCs with higher demand will achieve lower inventory turns than smaller DCs Details the penalties that apply when cycle stocks do not follow the square root law

8. When an aggregate inventory analysis is performed using data from a company's warehouses, which warehouses should be considered the best performers? Those that have the lowest absolute amount of inventory Those for which inventories fall on or close to the turnover curve Those that have the highest sales volume Those for which demand is the highest

9. In distribution requirements planning, what is the minimum planning horizon?

The name of a commonly used scheduling and routing software The visibility (in miles) from a distribution center (on a clear day) The maximum cumulative lead time it takes for products to travel from a point of origin (e.g., a central warehouse) to a store The length of the time period for which forecasters are able to make accurate demand predictions

10. In a DRP, ending inventory equals which of the following? Ending inventory of the prior period + planned receipts - forecast/usage Ending inventory of the prior week + forecast/usage - planned receipts Planned receipts - ending inventory of prior period - forecast/usage Forecast/usage + ending inventory of prior period + planned receipts

11. What is the warehouse activity that converts generic products into a wide assortment of unique items called? Mass customization Order selection Delayed gratification Formal ordering

12. How does warehousing enable you to take advantage of production economies?

Warehouses enable you to ship in full truckload quantities. Warehouses allow you to produce in large quantities and store the product until it is sold. Warehouses are very large buildings that enable you to perform final assembly for very large quantities of products. Warehouses benefit from an increased focus on safety.

13. What kind of warehouse facility performs very differently from a conventional warehouse by receiving inventory and shipping it out in the same day? Product mixing facility Mix-and-match warehouse Rapid-flow warehouse Cross-dock

14. Warehouse robotization that is designed to support human activities in the facility are called: Robotic assistance devices (RADs) Automated picker system (APS) Mechanized picking systems (MPSs) Collaborative robots (COBOTs)

15. Highly automated warehouses tend to be: Located in remote locations Highly seasonal facilities High-volume facilities Low overhead cost

16. Menu pricing refers to which of the following? Paying only for the space and service that you use Intensely competitive negotiations designed to get the lowest price possible from a warehouser Ordering lunch from the warehouse cafeteria Ordering warehousing services over the Internet

17. Which kind of warehouse arrangement is likely to have the highest variable cost for a company? Long-term contract warehousing Building a private automated warehouse Leasing a warehouse Short-term public warehousing

18. What do we call the mathematical expression that predicts the relationship between the number of warehouses and the amount of safety stock inventory that a company can expect to maintain? Pareto rule Square root of N rule Portfolio effect Center-of-gravity effect

19. Why is Six Sigma finding application in warehouses?

Governments usually require warehouses to implement Six Sigma programs. Warehouses are very unsafe places to work, and Six Sigma eliminates work hazards. Six Sigma helps to improve the quality of warehouse processes just like it helps in manufacturing processes. Warehouses typically have terrible service and require dramatic changes.

20. Which order fulfillment (quality) measure refers to the number (percentage) of orders delivered defect-free over a specified period of time? Order accuracy Perfect order completion Cost per order On-time delivery

21. The goal of reverse logistics is to: Improve product quality Minimize harm to employees Capture value and reduce cost Make shipping processes more efficient

22. The Basel Ban: Put an end to the export of hazardous waste from rich to poor countries Stopped the recall of hazardous waste Increased the movement of waste electronics to Africa Was coordinated by the United Nations

23. When product is returned from a position forward in the supply chain often due to slow sales, loading the trade, or the need to reposition inventory, it is considered a(n): Damage return Asset return Marketing return Environmental return

24. What is one reason a retailer would use liquidation? They want to maintain a reputation as a discount retailer. They underestimated their inventory needs. They need the capacity to hold a greater volume of inventory. They want to reduce the amount of product placed in landfills.

25. A good reverse logistics system: Increases brand loyalty Reduces risk to the consumer Increases profitability Builds customer loyalty All of the above

26. Return avoidance includes: Reclaiming or reusing materials that have scrap value Outsourcing the returns process Minimizing contact with the end customer Ensuring that the consumer can figure out how to use the product

27. Gatekeeping includes: Taking the time to make accurate decisions on the disposition of product Determining the correct target audience for a product Making acceptance decisions as close to the manufacturer as possible Using simple rules and policies to quickly decide how to manage returned product

28. Because returns are often charged against sales: Buyers expedite returns Salespeople fight returns Manufacturers encourage returns Suppliers deduct from their invoices

29. Secondary markets: Act as third-party logistics providers Can be an efficient way to get rid of excess inventories Lead to a net loss in profitability Reach the same target audience as primary markets

30. When implementing lifecycle costing, a firm should: Benchmark Consider all costs Calculate supplier costs Use exact numbers rather than estimates All of the above

31. The primary objective of inventory management is: Warehouse expansion Warehouse utilization Inventory minimization Total cost minimization

32. According to the strategic profit model, a decrease in purchase costs (all else equal) will result in which of the following? A decrease in profit margins and a decrease in asset turnover A decrease in profit margins and an increase in asset turnover An increase in profit margins and a decrease in asset turnover An increase in profit margins and an increase in asset turnover

33. All else equal, greater inventories result in which of the following? Greater current assets Greater profits Greater accounts receivable Greater fixed assets

34. Which of the following will result if a firm orders a given product in quantities lower than the EOQ? Its annual order placement costs will be lower than in the optimum. Its annual inventory holding costs will be higher than in the optimum. Customer demand will be lower than in the optimum. Total logistics costs will be higher than in the optimum.

35. According to the square root law of cycle stocks, inventory turns in a stocking facility will decrease by _____ when demand levels drop by 75%. 50% 25% 75% 100%

36. A cross-dock operation that receives truckload volumes of finished goods from a variety of consumer goods manufacturers and ships truckload volumes of assorted products to nearby retailers would be an example of a warehouse facility that serves which two purposes for the manufacturers? Supply mixing and product mixing Product mixing and long-term storage Product mixing and outbound consolidation Supply mixing and inbound consolidation

37. Which of the following is a primary role of a breakbulk warehouse? Receive large-volume truckload (TL) shipments and break them down for shipping to different customers. Help companies avoid paying customs duties on imported products. Create easy flow through of inventory through the warehouse. Perform value-added services like labeling and final assembly.

38. What role does radio frequency technology play in warehouse operations? Communicates to warehouse workers when it is time to take a break Communicates to customers when an order is shipped Helps pickers identify the right product to select to fill an order Sends signals to robotized workers to verify stocking location

39. Which reason below justifies the use of contract warehousing? It allows the company a degree of control yet is less expensive than private warehousing. It provides the warehouse customer with greater control than private warehousing. It demonstrates a greater commitment to customers than buying a private warehouse. The risks of inventory loss and damage are minimal in contract warehousing.

40. Which kind of warehouse arrangement is likely to have the greatest fixed cost for a company? Long-term public warehousing Building a private automated warehouse Leasing a warehouse Long-term contract warehousing

41. Which of the following is a characteristic of reverse logistics? Reverse logistics costs are predictable. In-depth negotiations around reverse logistics are rare. Dispositions of products may be unclear. Product quality is uniform.

42. In comparison to forward logistics costs, reverse logistics generally has: Higher shrinkage Lower obsolescence Higher inventory carrying costs Higher transportation costs 43. Avoidance: Determines what to do with returned product. Is a critical part of employee personnel training for dealing with disgruntled customers. Builds in high quality control as a means of minimizing returns. Sets strict return policies so that the consumer will be less likely to return an item because they changed their mind.

44. Having a decision process in place to return unused, new products back to the retail shelf instead of shipping them back through the returns channel is an example of: Zero returns Gatekeeping Centralized return centers Avoidance

45. Lifecycle costing can help: Switch materials Increase certainty about future costs Create visibility Increase warranty reserves