QUESTION 1

When does a base stock system issue an order for inventory?

Group of answer choices

Whenever a withdrawal is made

When the amount in inventory reaches amount x

At the end of the period

When a bin is empty

When the purchasing agent notices it needs to be

QUESTION 2

Which of the following statements is NOT correct regarding the newsvendor model?

Group of answer choices

There are shortage costs if your order quantity turns out to be too low.

All of the others are correct.

You only have one production or procurement opportunity.

There are excess costs if your order quantity turns out to be too high.

The best order quantity generally is equal to the average forecast demand.

QUESTION 3

Cycle counting is used to ensure _________.

Group of answer choices

Overtime

Shortage costs

Order quantities

Inventory accuracy

Depreciation

QUESTION 4

What is the total inventory cost if annual demand is 75,000 units per year, the order quantity is 2,400 units, the holding cost is $0.375 per unit, and the ordering costs are $14.40?

Group of answer choices

$600

$900

$750

$450

$1,200

QUESTION 5

A components manufacturer uses approximately 20,000 units annually of an item. They are used at a steady rate during the 250 workdays that the plant operates. The cost of each item is $7.00, and the annual carrying cost is $0.50 per unit per year. The ordering cost is $50. What is the annual ordering costs using the EOQ order quantity?

Group of answer choices

$1,000

$2,000

$500

$1,500

$2,500