Question 1. How many of the statements are true? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4 S

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Question 1. How many of the statements are true? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4 Statement 1. For zero safety stock, the total carrying cost is equal to the total ordering cost at the economic order quantity. Statement 2. WIP is a primary type of inventory. Statement 3. In an inventory policy, ROP answers the lot sizing question. Statement 4. A periodic review inventory policy will have the form (ROP,Q) whereas a continuous review inventory policy will have the form (T,Q).

For an inventory item, suppose the demand is 320/week, the order frequency is 8/year, lead time is 1.2 weeks, and safety stock is 9

Question 2. Find the inventory policy for a periodic review system.

A. ( 384 , 2080 )

E. ( 6.5 weeks , 40 )

B. ( 393 , 40 )

F. ( 1.5 months , 2080 )

C. ( 384 , 40 )

G. ( 1.5 weeks , 2080 )

D. ( 393 , 2080 )

H. ( 6.5 months , 40 )

I.   None of the above

Question 3. Find the inventory policy for a continuous review system.

A. ( 384 , 2080 )

E. ( 6.5 weeks , 40 )

B. ( 393 , 40 )

F. ( 1.5 months , 2080 )

C. ( 384 , 40 )

G. ( 1.5 weeks , 2080 )

D. ( 393 , 2080 )

H. ( 6.5 months , 40 )

I.   None of the above

Question 4. How many of the statements are true?

(A) 0   (B) 1   (C) 2   (D) 3   (E) 4

Statement 1. The order frequency is 2/quarter.

Statement 2. The inventory period is 1.5 weeks

Statement 3. The inventory turnover is 320/month

Statement 4. The inventory turnover rate is 16/year

Question 5. How many statements are true?

(A) 0   (B) 1   (C) 2   (D) 3   (E) 4

Statement 1. The lot size increases as the inventory period increases.

Statement 2. The stockout level increases as the safety stock decreases.

Statement 3. The turnover rate increases as the lot size decreases.

Statement 4. The inventory period increases as the order frequency decreases.

Question 2. Find the inventory policy for a periodic review system.

A. ( 384 , 2080 )

E. ( 6.5 weeks , 40 )

B. ( 393 , 40 )

F. ( 1.5 months , 2080 )

C. ( 384 , 40 )

G. ( 1.5 weeks , 2080 )

D. ( 393 , 2080 )

H. ( 6.5 months , 40 )

I.   None of the above

Question 3. Find the inventory policy for a continuous review system.

A. ( 384 , 2080 )

E. ( 6.5 weeks , 40 )

B. ( 393 , 40 )

F. ( 1.5 months , 2080 )

C. ( 384 , 40 )

G. ( 1.5 weeks , 2080 )

D. ( 393 , 2080 )

H. ( 6.5 months , 40 )

I.   None of the above

Question 4. How many of the statements are true?

(A) 0   (B) 1   (C) 2   (D) 3   (E) 4

Statement 1. The order frequency is 2/quarter.

Statement 2. The inventory period is 1.5 weeks

Statement 3. The inventory turnover is 320/month

Statement 4. The inventory turnover rate is 16/year

Question 5. How many statements are true?

(A) 0   (B) 1   (C) 2   (D) 3   (E) 4

Statement 1. The lot size increases as the inventory period increases.

Statement 2. The stockout level increases as the safety stock decreases.

Statement 3. The turnover rate increases as the lot size decreases.

Statement 4. The inventory period increases as the order frequency decreases.

Explanation / Answer

When safety stock is lacking then the holding cost is only for the cycle stock.

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