In ABC inventory classification system, class A items may:

a.

Require frequent deliveries

b.

Require higher safety stock

c.

Require batch updating of inventory records

d.

Require a periodic inventory system

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Question 12

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Using regression analysis for forecasting, a high value for R² suggests that we can:

Select one:

a.

Be totally confident in our forecast

b.

Be reasonably confident in our forecast

c.

Have no confidence in our forecast

d.

Have little confidence in our forecast

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Question 13

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The choice of a forecasting method should be based on an assessment of the costs and benefits of each method in a specific application

Select one:

True

False

Question 14

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For a company that uses a continuous review inventory system, which of the following is true?

a.

The order quantity may vary with each order

b.

The order interval is fixed

c.

The order interval may vary with each order

d.

The order quantity and the order interval are fixed

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What question must be considered in any inventory system?

a.

What is to be ordered?

b.

How much should be ordered?

c.

When should the order be placed?

d.

All of the above

e.

Only (b) and (c) of the above

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Question 16

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A bill of material specifies all of the following except

a.

How many of each component is needed

b.

Lot size and lead time of each component

c.

A brief description of each component in the product

d.

When a component is needed in the assembly process

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Question 17

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MRP systems are:

a.

Intended to determine an appropriate master production schedule

b.

Appropriate for all end items in the product line

c.

Intended to reduce inventory requirements, production lead times, and delivery times to customers

d.

Substitutes for fixed order point/order quantity systems

e.

Intended to be used for independent demand items

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Question 18

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The ABC approach to inventory control is best described by which of the following?

a.

Reduce the amount of B parts on hand

b.

Always maintain a high safety stock level

c.

Stock ample C parts

d.

Stock ample A parts

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Question 19

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Production planning is generally a direct input in which of the following?

a.

Material requirements planning

b.

Master production scheduling

c.

Rough-cut capacity planning

d.

Customer order planning

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Question 20

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A system that triggers ordering on a uniform time basis is called a:

a.

Fixed-period system

b.

EOQ

c.

Reorder point system

d.

Fixed-quantity system

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