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A Reorder Point Will Fall If

Dwayne Morise

Question: The reorder point will fall if:

  1. the variance of demand rises.

  2. b.the chance of a stockout falls.

  3. c.the lead time falls.

  4. d.the setup cost rises.

  5. Answer: the lead time falls

  6. Question: What is the primary lever to reduce cycle inventory?:

  7. a. place orders closer to the time when they must be received

  8. b. improve demand forecasts

  9. c. reduce the lot sizes

  10. d. use flexible automation

  11. Answer: reduce the lot sizes

  12. Question: Inventory used to absorb uneven rates of demand or supply is referred to as:

  13. a. independent demand inventory

  14. b. anticipation inventory

  15. c. pipeline inventory

  16. d. cycle inventory

  17. Answer: anticipation inventory

  18. Question: When looking at inventory management, the term “lot size” refers to the physical dimensions of the area where the inventory is stored.

  19. True or False

  20. Answer: False

  21. Question: A quantity discount is attractive because there is a drop in the price per unit when the order is sufficiently large.

  22. True or False

  23. Answer: True

  24. Question:

  25. Answer: the setup/ordering cost must exceed the annual holding cost of one unit.

  26. Question: Inventory management is the planning and controlling of inventories in order to meet the competitive priorities of the organization.

  27. True or False

  28. Answer: True

  29. Question: A form of shrinkage called ________ occurs when inventory cannot be used or sold at full value, owing to model changes, engineering modifications,or unexpectedly low demand.

  30. a. pilferage

  31. b. deterioration

  32. c. obsolescense

  33. d. life-cycle shrink

  34. Answer: obsolescense

  35. Question: The primary lever to reduce anticipation inventory is to

  36. A. improve demand forecasts so that fewer surprises come from customers.

  37. b. match demand rate with production rate.

  38. c. streamline the methods for placing orders and marking setups.

  39. d. rely on more equipment and labor buffers.

  40. Answer: match demand rate with production rate.

  41. Question: An individual item or product that has an identifying code and is held in inventory somewhere along the supply chain is called a

  42. A. MRO.

  43. b. stock-keeping unit.

  44. c. inventory item.

  45. d. stockable unit.

  46. Answer: stock-keeping unit.