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Exam 18: Inventory management with known demand

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Question 31

True/False

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Total cost in the EOQ model with quantity discounts is calculated in the same way as it is in the basic EOQ model

A) True
B) False

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Question 32

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Which of the following is a consequence of being out of stock of an item?

A) Customer dissatisfaction
B) Delayed revenues
C) Costs for additional record keeping
D) Lost business
E) All of the above

F) A) and B)
G) A) and C)

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Question 33

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In the EOQ model with quantity discounts,the optimum quantity will always be found on the lowest cost curve

The average inventory level is inversely related to order size

Which of the following items would be most likely to have dependent demand?

In the EOQ model with quantity discounts,if holding costs are given as a percentage of unit price,a graph of the total cost curves will have the same EOQ for each curve

The introduction of quantity discounts will cause the optimum order quantity to be:

Safety stock is held to meet anticipated need

The total cost curve is relatively flat near the EOQ

If she was to order 80 pounds of pepperoni at a time,what would be the average inventory level?

Annual setup cost is inversely related to order size

Holding costs are a function of order size

refer to the following: Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10 per order, and holding costs are 4 cents per pound per day. Lead time for each order is 3 days, and the pepperoni itself costs $3 per pound. -At what point should she reorder pepperoni?

Which of the following are part of a MRP system?

The objective of an inventory policy is to minimize the total inventory cost per unit time

Interest,insurance,and opportunity costs are all associated with holding costs

The average inventory level and the number of orders per year are inversely related As one increases,the other decreases

In the basic EOQ model,if usage and production/delivery rates are equal,there will be no inventory buildup,and thus the order quantity cannot be calculated

The objective of inventory management is to minimize the cost of holding inventory

Which of the following is not one of the assumptions of the basic EOQ model?