M06 for Supply Chain

Quiz: Inventory

1. Which of the following is not one of the categories of manufacturing inventory?

A) Raw materials

B) Finished products

C) Component parts

D) Just-in-time***

E) Supplies

2. Which of the following is one of the categories of manufacturing inventory?

A) Economic Order Inventory

B) Work-in-process***

C) Quality units

D) JIT Inventory

E) Re-order point

3. Firms keep supplies of inventory for which of the following reasons?

A) To maintain dependence of operations

B) To provide a feeling of security for the workforce

C) To meet variation in product demand***

D) To hedge against wage increases

E) In case the supplier changes the design

4. Which of the following is not a reason to carry inventory?

A) To provide a safeguard for variation in raw material delivery time

B) To take advantage of economic purchase-order size

C) To maintain independence of operations

D) To meet variation in product demand

E) To keep the stock out of the hands of competitors***

5. When developing inventory cost models, which of the following are not included as costs to place an order?

A) Phone calls

B) Taxes***

C) Clerical

D) Calculating quantity to order

E) Postage

6. Which of the following is not included as an inventory holding cost?

A) Annualized cost of materials***

B) Handling

C) Insurance

D) Pilferage

E) Storage facilities

7. Which of the following is usually included as an inventory holding cost?

A) Breakage***

B) Order placing

C) Typing up an order

D) Quantity discounts

E) Annualized cost of materials

8. In making any decision that affects inventory size, which of the following costs do not need to be considered?

A) Holding costs

B) Setup costs

C) Ordering costs

D) Fixed costs***

E) Shortage costs

9....