Question 1

In an order-up-to system, the order-up-to level should become higher when inventory storage becomes cheaper

	True
	False

Question 2

To plan for periodic inventory replenishment, we need to know

a)	how the supplier allocates its production capacity to our orders

b)	the work schedule of the warehouse associates

c)	the customers payment method (e.g., cash, credit card, debit card)

d)	how frequently the third-party logistics company service their trucks

Question 3

Which of the following is NOT an assumption for applying the order-up-to policy to the example in the lecture

a)	The excess inventory is partially carried over to the future because of perishability

b)	The inventory holding cost is proportional to the quantity stored

c)	The supplier is reliable and is able to deliver the purchase order in full quantity on time

d)	The suppliers delivery lead time is consistent over time

Question 4

In a periodic-review inventory system,

a)	The system inventory is completely ignored during the review cycle

b)	The purchasing orders are issued only when the supplier has enough stock of finished products

c)	The cost for shipping is higher than in a continuous review system

d)	The scheduling of production is easier for the supplier than in a continuous-review inventory system

Question 5

Which one of the following is true for an order-up-to system

a)	The pipeline inventory should not account for work-in-progress at the suppliers facility that are processed for past purchasing orders

b)	The order-up-to level is the target for the on-hand inventory that we would like to reach by issuing the purchasing order

c)	The order-up-to level is the total of the on-hand inventory and in-transit orders

d)	The difference between the order-up-to level and the prior-order inventory position is the amount in the purchasing order