Chap017 - Chapter 17 - Inventory Control Chapter 17...

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Chapter 17 - Inventory Control Chapter 17 Inventory Control True / False Questions 1. Inventory is defined as the stock of any item or resource used in an organization. TRUE Level: Easy 2. An inventory system is a set of policies and controls that monitors Levels of inventory and determines what Levels should be maintained, when stock should be replenished and how large orders should be. TRUE Level: Easy 3. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered. TRUE Level: Easy 4. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the Level of quality to specify. FALSE Level: Easy 17-1
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Chapter 17 - Inventory Control 5. One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be. TRUE Level: Easy 17-2
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Chapter 17 - Inventory Control 6. In inventory models, high holding costs tend to favor high inventory Levels. FALSE Level: Easy 7. In inventory models, high holding costs tend to favor low inventory Levels and frequent replenishment. TRUE Level: Medium 8. If the cost to change from one product to another were zero the lot size would be very small. TRUE Level: Easy 9. Shortage costs are precise and easy to measure. FALSE Level: Easy 10. Dependent demand inventory Levels are usually managed by calculations using calculus- driven, cost-minimizing models. FALSE Level: Easy 17-3
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Chapter 17 - Inventory Control 11. The fixed-time period inventory system has a smaller average inventory than the fixed- order quantity system because it must also protect against stockouts during the review period when inventory is checked. FALSE Level: Easy 12. The fixed-order quantity inventory model favors less expensive items because average inventory is lower. FALSE Level: Easy 13. The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout. TRUE Level: Easy 14. The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged. TRUE Level: Easy 15. Fixed-order quantity inventory models are "event-triggered". TRUE Level: Easy 17-4
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Chapter 17 - Inventory Control 16. Fixed-time period inventory models are "event-triggered". FALSE Level: Easy 17. Fixed-order quantity inventory systems determine the order point, R and the order quantity, Q values. TRUE Level: Easy 18. The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory and then subtracting back-ordered inventory. TRUE
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This note was uploaded on 07/17/2011 for the course MBA 587 taught by Professor None during the Spring '11 term at Missouri (Mizzou).

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Chap017 - Chapter 17 - Inventory Control Chapter 17...

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