Lesson 17 Inventory Management
60. Which of the following is not one of the assumptions of the basic EOQ model? A.
Annual demand requirements are known and constant. B. Lead time does not vary.
C. Each order is received in a single delivery. D. Quantity discounts are available.
E. All of the above are necessary assumptions.
61. Which is an application for RFID tags?
A. Monitoring the temperature of fruit during shipment
B. Measuring the urine output of hospital patients
C. Adjusting medications for diabetics
D. Assessing audience response to a new movie
E. Estimating the results of a political election
62. A non-linear cost related to order size is the cost of .
A. interest
B. insurance
C. taxes
D. receiving
E. space
63. In a two-bin inventory system, the amount contained in the second bin is equal to the:
A. ROP B. EOQ
C. amount in the first bin
D. optimum stocking level
E. safety stock
64. When carrying costs are stated as a percentage of unit price, the minimum points on
the total cost curves
A. Line up
B. Equal zero
C. Do not line up
D. Cannot be calculated
E. Depend on the percentage assigned
65. Dairy items, fresh fruit and newspapers are items that:
A. do not require safety stocks
B. cannot be ordered in large quantities
C. are subject to deterioration and spoilage
D. require that prices be lowered every two days
E. have minimal holding costs
66. Which is not included in order costs?
A. processing vendor invoices for payment
B. moving delivered goods to temporary storage
C. inspecting incoming goods for quantity
D. taking an inventory to determine how much is needed
E. temporary storage of delivered goods
67. In an A-B-C system, the typical percentage of the number of items in inventory for A
items is about:
A. 10 B. 30 C. 50 D. 70 E. 90
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68. In the A-B-C classification system, items which account for fifteen percent of the total
dollar-volume for a majority of the
inventory items would be classified as:
A. A items B. B items C. C items
D. A items plus B items E. B items plus C items
69. In the A-B-C classification system, items which account for sixty percent of the total
dollar-volume for few inventory items would
be classified as:
A. A items B. B items C. C items
D. A items plus B items E. B items plus C items
70. The purpose of “cycle counting” is to:
A. count all the items in inventory
B. count bicycles and motorcycles in inventory
C. reduce discrepancies between inventory records and actual
D. reduce theft
E. count 10% of the items each month
71. The EOQ model is most relevant for which one of the following?
