Week 7 Exam

QUESTION 1

1. Customer service requirements play very little role in setting inventory policy.

True

False

QUESTION 2

1. Lot-for-lot replenishment is most appropriate for which of the following types of orders?

	a.	Any independent demand items
	b.	Large, infrequent orders
	c.	Infrequent orders of varying sizes
	d.	Orders in a JIT shop

QUESTION 3

1. Which of the following inventory costs is a variable cost that increases as the level of inventory increases?

	a.	Ordering costs
	b.	Backorder costs
	c.	Capacity variance costs
	d.	Carrying costs

QUESTION 4

1. Which of the following is a definition of inventory?

	a.	Items to support production, supporting activities, and customer service
	b.	Speed at which items pass through an organization
	c.	Branch of management concerned with planning and controlling items
	d.	Cost roll-up as a part goes through a manufacturing process

QUESTION 5

1. Placing an order for replenishment inventory early can

	a.	reduce the bullwhip effect.
	b.	cause a spike in demand.
	c.	require a very large increase in safety stock to get to 100 percent order fulfillment.
	d.	create the potential for a very large overstock.

QUESTION 6

1. The plan that provides, in effect, a contractual agreement ensuring salespeople that they can make delivery promises is the ________________.

	a.	sales and operations plan.
	b.	material requirements plan.
	c.	distribution resources plan.
	d.	master production schedule.

QUESTION 7

1. Which of the following measures the efficiency of an organization's inventory?

		Gross profit
		Inventory turnover
		Cost of goods sold
		Standard costing

QUESTION 8

1. A company that divides its inventory into three categories and counts the items in each category on different schedules is engaged in the type of inventory audit called periodic review.

True

False

QUESTION 9

1. If you wanted to know the operation that would be performed on a particular component at a specific workstation, you would look on which of the following?

	a.	Bill of material
	b.	Master production schedule
	c.	Routing
	d.	Inventory status
	e.	Any of the above

QUESTION 10

1. Which of the following is an objective of aggregate inventory management?

	a.	To perform master scheduling at optimum efficiency and effectiveness
	b.	To translate strategic inventory goals into tactical plans for execution
	c.	To balance customer service, operations efficiency, and inventory investment cost objectives
	d.	To determine the relative importance of inventory by placing it in categories

QUESTION 11

1. Rough-cut capacity planning at the end-item level is part of which of the following processes?

	a.	Business planning
	b.	Preparation of the master production schedule
	c.	Input-output control
	d.	Resource planning

QUESTION 12

1. Which of the following is a major source of data for the material requirements plan?

	a.	Route file
	b.	Master production schedule
	c.	Demand forecasts
	d.	Capacity requirements plan

QUESTION 13

1. Which of the following would be classified as work-in-process inventory?

	a.	A lubricant intended to keep production equipment running
	b.	A component part that has just been received at the factory
	c.	An item that is on its way to a customer in a truck
	d.	A completely processed item awaiting inspection

QUESTION 14

1. Determinations about the delivery of components for operations are made in the _______________________ .

	a.	production planning process.
	b.	master production scheduling process.
	c.	capacity planning process.
	d.	material requirements planning process.

QUESTION 15

1. To find out the types of components in a clock radio, you would look at which of the following?

	a.	Bill of material
	b.	Routing sheet
	c.	Resource requirements plan
	d.	Master production schedule