Inventory Management-Quiz

1. EOQ models are concerned with the size of orders. Carrying cost is a function of
order size; the larger the order, the higher the inventory carrying cost.
a)True
b)False

2. Larger order quantities lead to higher inventory carrying cost ROP models indicate to
managers the time between orders.
a)True
b)False

3. The calculation of safety stock requires knowledge of __________ and __________.

:Service level and lead time variability

4. What are the two basic issues in inventory management?

1. What to order
2. How much to order

5. Most of the time it would be too costly to avoid all stockouts.Which of the following
is not one of the assumptions of the basic EOQ model?

a) Annual demand requirements are known and constant.

b) Lead time does not vary.
c) Each order is received in a single delivery.
d) Quantity discounts are available.
e) All of the above are necessary assumptions.

D. Quantity discounts are available

6. Which of the following interactions with vendors would potentially lead to inventory
reductions?
A. reduce lead times
B. increase safety stock
C. less frequent purchases
D. larger batch quantities
E. longer order intervals
A. Reducing lead times

7. Which of these products would be most apt to involve the use of a single-period
model?

A. gold coins
B. hammers
 C. fresh fish
D. calculators
E. frozen corn
C. fresh fish

8. The management of supply chain inventories focuses on:

A. internal inventories
B. external inventories
C. both internal and external inventories
D. safety stock elimination
E. optimizing reorder points
C. both internal and external inventories

9. An operations strategy for inventory management should work towards:

A. increasing lot sizes

B. decreasing lot sizes
C. increasing safety stocks
D. decreasing service levels
E. increasing order quantities
B. decreasing lot sizes

10. An operations strategy which recognizes high carrying costs and reduces ordering
costs will result in:

A. unchanged order quantities

B. slightly decreased order quantities
C. greatly decreased order quantities
D. slightly increased order quantities
E. greatly increased order quantities
C. greatly decreased order quantities