inventory questions
DESCRIPTION
MCQ and T or F QuestionsTRANSCRIPT
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“Top Secret”
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1.Which of the following is NOT one of the five purposes that inventory serves?A. Prevents economies of scaleB. Balances supply and demandC. Enables specialization in manufacturingD. Provides protection from uncertainties in demand
and order cycle timeE. Acts as a buffer between critical interfaces within the
supply chain
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1.Which of the following is NOT one of the five purposes that inventory serves?A. Prevents economies of scaleB. Balances supply and demandC. Enables specialization in manufacturingD. Provides protection from uncertainties in demand
and order cycle timeE. Acts as a buffer between critical interfaces within the
supply chain
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2.Variability in demand increases safety stock.A. TrueB. False
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2.Variability in demand increases safety stock.A. TrueB. False
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3.Speculative stock is held in inventory because of…A. Demand uncertaintyB. Forecasted price increasesC. Variability in lead timesD. Manufacturing requirements
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3.Speculative stock is held in inventory because of…A. Demand uncertaintyB. Forecasted price increasesC. Variability in lead timesD. Manufacturing requirements
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4.Seasonal stock is used to prevent stockouts.A. TrueB. False
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4.Seasonal stock is used to prevent stockouts.A. TrueB. False
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5. Dead stock is…A. Ready to be shippedB. Being held for extended periods of timeC. The same as safety stockD. Stock that is obsolete
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5. Dead stock is…A. Ready to be shippedB. Being held for extended periods of timeC. The same as safety stockD. Stock that is obsolete
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6. The economic order quantity model (EOQ)…A. Eliminates inventory carrying costsB. Maximizes outputC. Minimizes the total of inventory carrying costs and
ordering costsD. Has no effect on inventory carrying costs
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6. The economic order quantity model (EOQ)…A. Eliminates inventory carrying costsB. Maximizes outputC. Minimizes the total of inventory carrying costs and
ordering costsD. Has no effect on inventory carrying costs
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7. Which of the following does NOT influence forecasting accuracy?A. Economic conditionsB. Competitive actionsC. Changes in government regulationsD. Market shiftsE. All of the above influence forecasting accuracy
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7. Which of the following does NOT influence forecasting accuracy?A. Economic conditionsB. Competitive actionsC. Changes in government regulationsD. Market shiftsE. All of the above influence forecasting accuracy
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8. ______ represents the magnitude of a stockout.A. Fill rateB. EOQC. Replenishment cycleD. Fixed Order Interval Model
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8. ______ represents the magnitude of a stockout.A. Fill rateB. EOQC. Replenishment cycleD. Fixed Order Interval Model
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9. The Fixed Order Interval Model is used when orders must be placed at fixed time intervals.A. TrueB. False
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9. The Fixed Order Interval Model is used when orders must be placed at fixed time intervals.A. TrueB. False
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10. In a fixed-quantity arrangement, orders are triggered by a time. A. TrueB. False
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10. In a fixed-quantity arrangement, orders are triggered by a time. A. TrueB. False
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11. Which of the following is not a goal of purchasing?A. Keep inventory investment and loss at a minimumB. Find or develop competent suppliersC. Forecast accurate demand for materials purchasedD. Purchase items and services at lowest total cost
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11. Which of the following is not a goal of purchasing?A. Keep inventory investment and loss at a minimumB. Find or develop competent suppliersC. Forecast accurate demand for materials purchasedD. Purchase items and services at lowest total cost
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12. In the acquisition process, the most important activity is thought to be…A. Purchasing the right quantityB. Selecting the best supplierC. Purchasing materials and services at lowest costD. Minimize lead time
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12. In the acquisition process, the most important activity is thought to be…A. Purchasing the right quantityB. Selecting the best supplierC. Purchasing materials and services at lowest costD. Minimize lead time
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13. Which of the following is NOT a major product category that is purchased by most companies?A. Component partsB. Raw materialsC. Operating suppliesD. Process equipmentE. All of the above are major categories purchased by
most companies
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13. Which of the following is NOT a major product category that is purchased by most companies?A. Component partsB. Raw materialsC. Operating suppliesD. Process equipmentE. All of the above are major categories purchased by
most companies
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14. Supplier certification is thought to be better than inspection programs.A. TrueB. False
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14. Supplier certification is thought to be better than inspection programs.A. TrueB. False
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15. Just in time is…A. A specific method of managing inventoryB. More of a philosophy of doing business C. Uses detailed specificationsD. Promotes safety stock
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15. Just in time is…A. A specific method of managing inventoryB. More of a philosophy of doing businessC. Uses detailed specificationsD. Promotes safety stock
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16. Which of the following is not an important part of JIT?A. Safety StockB. Buyer/Supplier CommunicationC. Purchaser/Supplier relationshipD. All of the above are important parts of JIT
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16. Which of the following is not an important part of JIT?A. Safety StockB. Buyer/Supplier CommunicationC. Purchaser/Supplier relationshipD. All of the above are important parts of JIT
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17. Which of the following is not an issue related to supplier selection?A. Quality control methodsB. Supplier proximityC. Manufacturing flexibilityD. Lead time reliabilityE. All of the above are issues related to supplier
selection
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17. Which of the following is not an issue related to supplier selection?A. Quality control methodsB. Supplier proximityC. Manufacturing flexibilityD. Lead time reliabilityE. All of the above are issues related to supplier selection
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18. JIT manufacturers and their suppliers generally have short term contractsA. TrueB. False
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18. JIT manufacturers and their suppliers generally have short term contractsA. TrueB. False
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19. Which of the following is not a benefit of JIT?A. Lower inventory carrying costsB. Production levels are relatively levelC. Demand for materials is more predictableD. Increased sales
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19. Which of the following is not a benefit of JIT?A. Lower inventory carrying costsB. Production levels are relatively levelC. Demand for materials is more predictableD. Increased sales
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20. An In-Plant Representative…A. Is a supplier in the buying company’s officeB. Often replaces a purchaser, planner, and a
salespersonC. Is associated with JIT IID. All of the above
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20. An In-Plant Representative…A. Is a supplier in the buying company’s officeB. Often replaces a purchaser, planner, and a
salespersonC. Is associated with JIT IID. All of the above
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21. Typical Criteria to use in identifying critical purchases are… A. Percentage of product costB. Percentage of total purchase expenditureC. Use on high-margin end itemsD. A and CE. All of the above
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21. Typical Criteria to use in identifying critical purchases are… A. Percentage of product costB. Percentage of total purchase expenditureC. Use on high-margin end itemsD. A and CE. All of the above
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22. All of the following are ways to reduce inventory levels except… A. Lead time analysisB. Measurement of fill rate by SKUC. Eliminating high turnover D. Analysis of customer demand characteristicsE. All of the above
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22. All of the following are ways to reduce inventory levels except… A. Lead time analysisB. Measurement of fill rate by SKUC. Eliminating high turnover D. Analysis of customer demand characteristicsE. All of the above
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23. All of the following are symptoms of poor inventory management except…
A. Decreasing number of backordersB. Increasing number of orders being canceledC. Large quantities of obsolete itemsD. Wide variance in inventory turnoverE. All of the above
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23. All of the following are symptoms of poor inventory management except…
A. Decreasing number of backordersB. Increasing number of orders being canceledC. Large quantities of obsolete itemsD. Wide variance in inventory turnoverE. All of the above
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24. The idea behind ABC analysis is that 20% of a firms customers or products accounts for 80% of the sales
A. TrueB. False
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24. The idea behind ABC analysis is that 20% of a firms customers or products accounts for 80% of the sales
A. TrueB. False
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25. Many companies use ERP systems to improve…A. Materials managementB. Plant managementC. Quality managementD. Production planning and controlE. All of the above
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25. Many companies use ERP systems to improve…A. Materials managementB. Plant managementC. Quality managementD. Production planning and controlE. All of the above
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26. A primary goal of inventory management is to achieve an optimum balance between inventory carrying costs and customer service.
A. TrueB. False
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26. A primary goal of inventory management is to achieve an optimum balance between inventory carrying costs and customer service.
A. TrueB. False
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27. Cost reduction and cost avoidance programs include all of the following except…
A. Supplier developmentB. StandardizationC. Make or Buy analysisD. Increase in inventory
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27. Cost reduction and cost avoidance programs include all of the following except…
A. Supplier developmentB. StandardizationC. Make or Buy analysisD. Increase in inventory
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28. Which of the following is not a performance measure?A. Price effectivenessB. Value analysisC. Material flow controlD. Cost savingsE. All of the above
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28. Which of the following is not a performance measure?A. Price effectivenessB. Value analysisC. Material flow controlD. Cost savingsE. All of the above
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29. System contracts are a means of reducing materials related costs A. TrueB. False
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29. System contracts are a means of reducing materials related costs A. TrueB. False
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30. All of the following are objectives of system contracts and stockless purchasing except…
A. Lower inventory levelsB. Increase in number of suppliersC. Reduction in administrative cost and paperworkD. Timely delivery of material directly to userE. All of the above
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30. All of the following are objectives of system contracts and stockless purchasing except…A. Lower inventory levelsB. Increase in number of suppliersC. Reduction in administrative cost and paperworkD. Timely delivery of material directly to userE. All of the above
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31. ______ is a physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.A. Raw materialsB. Work-in-processC. InventoryD. Finished goods
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31. ______ is a physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.A. Raw materialsB. Work-in-processC. InventoryD. Finished goods
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32. Inventory impacts all of the following except…A. Customer SatisfactionB. Logistics activity performanceC. Company performance D. Forecasting accuracyE. All of the above are impacted by inventory
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32. Inventory impacts all of the following except…A. Customer SatisfactionB. Logistics activity performanceC. Company performance D. Forecasting accuracyE. All of the above are impacted by inventory
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33. Which of the following is not an objective of inventory? A. Fulfill corporate policies and goalsB. Create customer demandC. Minimize total logistics activitiesD. Promote corporate profitabilityE. All of the above are objectives of inventory
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33. Which of the following is not an objective of inventory? A. Fulfill corporate policies and goalsB. Create customer demandC. Minimize total logistics activitiesD. Promote corporate profitabilityE. All of the above are objectives of inventory
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34. The three types of inventory are…
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34. The three types of inventory are… Raw materials Work-in-process Finished goods
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35. Which of the following is not a key decision of inventory?A. How much to orderB. When to orderC. Where to hold inventoryD. When to substitute transportation for inventoryE. All of the above are key decisions of inventory
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35. Which of the following is not a key decision of inventory?A. How much to orderB. When to orderC. Where to hold inventoryD. When to substitute transportation for inventoryE. All of the above are key decisions of inventory
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36. Which of the following is NOT an aspect of inventory that must be managed?A. Holding costsB. Number of productsC. Value analysisD. Lead timeE. All of the above are aspects of inventory that must be
managed
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36. Which of the following is NOT an aspect of inventory that must be managed?A. Holding costsB. Number of productsC. Value analysisD. Lead timeE. All of the above are aspects of inventory that must be
managed
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37. All of the following are internal measurements of inventory except…A. Inventory turnB. Selling days on handC. Backorder levelD. Inventory sales to ratioE. All of the above are internal measurements
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37. All of the following are internal measurements of inventory except…A. Inventory turnB. Selling days on handC. Backorder levelD. Inventory sales to ratioE. All of the above are internal measurements
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38. Which of the following is NOT an external measurement of inventory?A. Customer service levelB. Customer delivery quantityC. Customer delivery cycle timeD. ABC analysis
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38. Which of the following is NOT an external measurement of inventory?A. Customer service levelB. Customer delivery quantityC. Customer delivery cycle timeD. ABC analysis
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39. All of the following are symptoms of poor inventory management except…A. Decreasing numbers in backordersB. Higher customer turnover rateC. Periodic lack of storage spaceD. Increasing number of canceled ordersE. All of the above are symptoms of poor inventory
management
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39. All of the following are symptoms of poor inventory management except…A. Decreasing numbers in backordersB. Higher customer turnover rateC. Periodic lack of storage spaceD. Increasing number of canceled ordersE. All of the above are symptoms of poor inventory
management
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40. Which of the following is NOT a strategy to manage inventory?A. ABC analysisB. Real-time visibilityC. Inventory modelsD. Centralized decision makingE. All of the above are strategies to manage inventory
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40. Which of the following is NOT a strategy to manage inventory?A. ABC analysisB. Real-time visibilityC. Inventory modelsD. Centralized decision makingE. All of the above are strategies to manage inventory