Chapter 1 Introduction To Supply Chain Management 2

1. Dependent demand and independent demand items
differ in that

I.	for any product, all components are dependent-demand items
II.	the need for independent-demand items is forecast
III.	the need for dependent-demand items is calculated

2. Which
of the following would most likely be considered a dependent demand item?

a.	Bicycle tires used to assemble a bicycle
b.	Television (TV)
c.	Couch
d.	Lawn Mower

3. Which
of the following cannot be considered as independent demand items?

a.	wholesale and retail merchandise items
b.	maintenance, repair, and operating supplies at a manufacturing company
c.	maintenance, repair, and operating supplies at a service firm
d.	raw material items that become part of the final product at a manufacturing firm
e.	service industry items such as hospital supplies or office supplies for law firms

4. ____,
such as lubricants for machines, are used in the production process, but do not
become parts of the final products.

a.	Raw materials
b.	Work-in-process
c.	Maintenance, repair and operating supplies
d.	Finished goods
e.	Cycle stock

5. Companies
hold a supply of inventory for all of the following reasons EXCEPT:

a.	meet variation in product demand
b.	increase production change/setup costs
c.	allow production scheduling flexibility
d.	purchase in bulk to take advantage of quantity discounts
e.	maintain independence of operations (Decoupling)

6. Which
of the following is a disadvantage of excessive inventory?

a.	It hides production and other problems.
b.	It leads to higher inventory ordering cost.
c.	It leads to lower average inventory.
d.	It eliminates cycle stock.
e.	It reduces the need to conduct cycle count.

7. Which
of the following is not an example of an ordering cost for products purchased
from a supplier?

a.	the cost of transmitting the order
b.	the cost of receiving the product
c.	the cost associated with processing the invoice
d.	the opportunity cost of not ordering from a least cost supplier
e.	the cost of handling the product

ABC Inventory Matrix

Use the graph below to answer
the question(s).

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8. In
the ABC Inventory Matrix, inventory in area Y suggests

9. In
the ABC Inventory Matrix, inventory in area Z suggests

10. Which
of the following is NOT an assumption of the classic Economic Order Quantity
(EOQ)?

a.	Lead time is known and constant.
b.	Demand is known and constant.
c.	Instantaneous replenishment.
d.	There is no quantity discount.
e.	The production rate must be greater than the consumption rate.

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