NPTEL POMS Week 5 Assignment 05

1. The manager at Smart sport, a sports store, has to decide on the number of skis to
purchase for the winter season. Each pair of skis costs c = $132 and retails for p =
$240. Any unsold skis at the end of the season are disposed of for $75. The inventory
holding cost for the season is $8. What is the cost of understocking per skis for this
manager??
A. 98
B. 102
C. 108
D. 112
2. The manager at Smart sport, a sports store, has to decide on the number of skis to
purchase for the winter season. Each pair of skis costs c = $132 and retails for p =
$240. Any unsold skis at the end of the season are disposed of for $75. The inventory
holding cost for the season is $8. What is the cost of overstocking per skis for this
manager?
A. 58
B. 60
C. 74
D. 65
Solution:
s = $75 – $8 = $67; Cu = p – c = $240 - $132 = $108; Co = c – s = $132 - $67 = $65
3. What the manager at Smart sport, a sports store, has to decide on the number of skis
to purchase for the winter season. Each pair of skis costs c = $132 and retails for p =
$240. Any unsold skis at the end of the season are disposed of for $75. The inventory
holding cost for the season is $8. Determine the optimal stocking level for this
manage.
A. 0.58
B. 0.63
C. 0.73
D. 0.88
Solution:
CSL = Cu/ Cu+Co = 108/(108+65) = 0.63
4. What is a two-bin system?
A. A system in which orders are placed when only one complete bin of stock is
remaining.
B. A system in which suppliers deliver two bins at a time.
C. A system in which everything is split between two storage bins.
D. A system in which two full bins of an item are always held in stock.
5. The basis for ABC analysis is-
A. Little’s law
B. Root cause analysis
C. Pareto’s 80:20 rule
 D. First In First Out (FIFO)
6. VED analysis of inventory management stands for____________.
A. Vital-essential-desirable
B. Valuable-easy-disposable
C. Very-easily-delivered.
D. Valuable-effective-dispensable
7. Which of the following is an output of Material Requirement Planning (MRP)?
A. Master production schedule
B. Bill of materials
C. Inventory Status
D. Work orders
8. The following table is an example of-
Week 1 Week 2 Week 3 Week 4
Clothes dryer 300 80 120 100
Upright freezer 200 500
Clothes washer 200 200
A. Aggregate plan
B. Master Production Schedule
C. Load report
D. Inventory record
9. Product M is made of two units of N. N is made of two units of O and three units of P.
O is made of one unit of Q and four units of R. If 60 M are required, how many units
of ‘R’ component are needed (without lead time consideration)?
A. 720
B. 830
C. 960
D. 1080
Solution:
M (1)
For 1 unit of M, requirement of R

N (2) = 1*2*2*4 = 16 units

For 75 M, requirement of R

O (2) P (3) = 60*16 = 960 units

Q (1) R (4)

10. Each R requires 4 of component S; each S requires 3 of part T. The lead time for the
assembly of R is 3 weeks. The lead time for the manufacture of S is 4 weeks. The lead
time for the procurement of T is 5 weeks. The cumulative lead time for R is _______
weeks).
A. 6
B. 9
C. 12
D. 18
Solution: Cumulative lead time = 3+4+5 = 12 weeks