primary purpose of the basic economic order quantity model is
a. |
to calculate the reorder |
b. |
to minimize the sum of |
c. |
to maximize the customer |
d. |
to minimize the sum of setup |
e. |
to calculate the optimum |
12. If
an item is ordered at its economic order quantity, the annual carrying cost
should be:
a. |
slightly less than the annual |
b. |
equal to the annual ordering |
c. |
twice the annual purchase |
d. |
the square root of the annual |
e. |
cannot be determined because |
13. What
inventory factor may be omitted from the basic EOQ derivation because it is a
constant?
a. |
Annual order-processing cost |
b. |
Annual purchase cost of goods |
c. |
Annual capital cost |
d. |
Annual setup costs |
e. |
all of these |
14. Which
of the following is not an assumption of the economic order quantity model?
a. |
Demand is known, constant, |
b. |
Lead time is known and |
c. |
Quantity discounts are not |
d. |
Production and use can occur |
e. |
The only variable costs are |
15. The
cost of a widget is $5, and the carrying rate is 40%; cost of processing an
order is $25, annual demand is for 400 widgets, and supply and usage patterns
are stable. What is the economic order quantity (EOQ)?
a. |
5 |
b. |
20 |
c. |
25 |
d. |
100 |
e. |
200 |
16. If
usage is constant, as order size increases, annual order costs ____ but annual
carrying costs ____.
a. |
increase ….. increase |
b. |
decrease ….. decrease |
c. |
increase ….. decrease |
d. |
decrease ….. increase |
e. |
remain the same ….. |
17. Which
one of the following statements regarding the economic order quantity is true?
a. |
The EOQ model combines |
b. |
If an order quantity is |
c. |
The EOQ model assumes a |
d. |
When the interest rate drops, |
e. |
EOQ is used to determine the |
18. Use
this information below to calculate the optimal order quantity:
Annual demand for backpacks |
|
The cost to place an order is |
|
The per unit cost of the item |
|
The annual holding rate is |
Choose the closest answer.
a. |
920 units |
b. |
250 units |
c. |
710 units |
d. |
830 units |
19. If
your company had an annual purchase cost of items equal to $2,000,000, an
annual holding cost of $150,000 and an annual ordering cost of $750,000 this
scenario would reveal that:
a. |
Your fixed lot size was lower |
b. |
Your fixed lot size was equal |
c. |
Your fixed lot size was |
d. |
Nothing because there is |
20. The
EOQ model with quantity discounts attempts to determine
a. |
what is the lowest purchasing |
b. |
whether to use fixed-quantity |
c. |
how many units should be |
d. |
what is the shortest lead |
e. |
what is the lowest amount of |
Figure 7-1
Use the graph below to answer
the question(s).
.jpg”>
21. Which
of the following is TRUE in relation to Figure 7-1?
a. |
Curve J represents the annual |
b. |
A lot size of G has an annual |
c. |
At lot size H both holding |
d. |
The EOQ is most likely lot |
22. If
the actual order quantity is the economic order quantity in a problem that
meets the assumptions of the model, the average amount of inventory on hand
a. |
is zero |
b. |
is affected by the amount of |
c. |
is one-half of the economic |
d. |
is smaller than the holding |
e. |
cannot be determined from the |
23. In
the absence of demand and delivery lead time variation, if demand is eight per
day and purchase lead time is four days, the reorder point is:
a. |
3. |
b. |
8. |
c. |
32. |
d. |
35. |
e. |
56. |
24. In
the absence of demand and delivery lead time uncertainty, reorder point is the
____.
a. |
demand during lead time |
b. |
safety stock |
c. |
sum of demand during lead |
d. |
economic order quantity |
e. |
average inventory |
25. The
UNLV Bookstore sells a unique calculator to college students. The demand for
this calculator has a normal distribution with an average daily demand of 20
units and a standard deviation of 4 units per day. The lead time for this
calculator is very stable at 9 days. Compute the statistical reorder point that
results in a 95 percent in-stock probability (Z = 1.65).
a. |
19.8 units |
b. |
80 units |
c. |
180 units |
d. |
199.8 units |
e. |
720 units |