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Chapter 6 quiz

# Chapter 6 quiz - Chapter 6 quiz Submitted by rjt5008 on...

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Chapter 6 quiz Submitted by rjt5008 on 3/9/2007 1:59:01 PM Points Awarded 8 Points Missed 3 Percentage 73% 1. “A” items in ABC analysis are: A. reviewed infrequently. B. particularly critical in financial terms. C. normally carried in large quantities. D. ordered infrequently. E. commonly managed by carrying inventory. Points Earned: 1/1 Correct Answer: B Your Response: B 2. Nuts and bolts (hardware) procured from a local JIT vendor, and stored in point-of-use Kanbans on the factory floor, are an example of what type of inventory? (On the exam, you will be expected to know all four of these terms – page 153) Points Earned: 1/1 Correct Answer: B Your Response: B 3. A company buys 10,000 unique items and has a total annual purchase volume of \$30 million. A part with a unit cost of one dollar (\$1.00) and an annual volume of 1,000,000 units would be classified as: Remember that ABC analysis is based on the total annual dollar value purchases of an item. So in this case, although, the item is low value, the extended anual purchase volume of \$1,000,000 is 1/30 of the total purchase volume for this company. They purchase 10,000 individual items and this one item accounts for \$1MM of the \$30MM purchase volume, so it is clearly an "A" item.

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