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24 Cards in this Set
- Front
- Back
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1. Which of the following statements best describes SKUs?
A. Sodas in a 6-pack and 12-pack are the same SKU because the cans are the same SKU. B. White shirts of different sizes but in the same size box are the same SKU. C. Wires of different gauges that area stocked in reels are the same SKU. D. Two white shirts in the same inventory but of different sizes or styles would be different SKUs. |
D
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2. If the order quantity is increased, which of the following occurs?
A. The cost of carrying inventory decreases and the cost of ordering increases. B. The cost of carrying inventory increases and the cost of ordering decreases. C. The cost of carrying inventory increases and the cost of ordering increases. D. The cost of carrying inventory decreases and the cost of ordering decreases. |
B
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3. In developing the standard EOQ formula, which of the following assumptions are made?
A. Demand for the item is relatively uniform. B. Replenishment is in lots or batches that arrive all at once. C. Ordering and carrying costs are constant and known. D. All of the above are assumed. |
D
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4. Which of the following statements is best?
A. Order point (OP) = demand during lead time (DDLT) + safety stock (SS) B. Average inventory = (Q + SS) / 2 C. Safety Stock is always needed. D. Safety Stock = order point + order quantity |
A
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5. Safety Stock will depend on which of the following?
A. Variability of demand B. Cost of carrying inventory C. Cost of placing an order D. Product obsolescence |
A
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6. Which of the following statements is most accurate?
A. About 20% of the items will usually account for about 80% of the total value. B. “A” items should have the loosest possible control. C. The general rule for using the ABC approach is to have plenty of everything in stock. D. “C” items account for about 50% of the total value. |
A
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7. Which of the following statements is best?
A. “A” items usually account for about 50% of the total usage. B. About 50% of the items usually account for 5% of the value. C. “C” items should be given top priority in inventory management. D. All inventory items should be managed in the same way. |
B
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8. What type of inventory record system keeps a continuous account of transactions as they occur?
A. Perpetual inventory system B. Periodic inventory system C. Two-bin system D. Safety Stock system |
A
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9. If the lead time is one week, the review period one week, the average demand 100 units per week, and the safety stock 50 units, the target level will be
A. 150 units B. 200 units C. 250 units D. 300 units |
C
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10. Which of the following is an advantage of cycle counting?
A. Timely detection and correction of problems B. Reduction of direct labor costs C. Use of spare labor D. Replenishment of inventory |
A
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Costs that may include lost sales, backorder costs, expediting, and additional manufacturing and purchasing costs?
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STOCK OUT COSTS
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A measure, usually expressed as a percentage, or satisfying demand through inventory or by the current production schedule in time to satisfy the customers’ requested delivery dates and quantities?
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SERVICE LEVEL
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A type of fixed-order system in which inventory is carried in two bins; replenishment quantity is ordered when the first bin (working) is empty. During the replenishment lead time, material is used from the second bin.
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TWO BIN INVENTORY SYSTEM
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An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year?
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CYCLE COUNTING
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The classification of a group of items in decreasing order of annual dollar volume (price multiplied by projected volume) or other criteria; this array is then split into three classes called A, B, C?
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ABC CLASSIFICATION
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A computer record or manual document on which each inventory transaction is posted so that a current record of the inventory is maintained?
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PERPETUAL INVENTORY RECORD
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An unfilled customer order or commitment?
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BACK ORDER
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The amount of a particular item that is ordered from the plant or a supplier or issued as a standard quantity to the production process?
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ORDER QUANTITY
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A set inventory level where, if the total stock on hand plus on order falls to or below that point, action is taken to replenish the stock?
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ORDER POINT
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A pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers?
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KANBAN
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a) A span of time required to perform a process (or series of operations); b)In a logistics context, the time between recognition of the need for an order and the receipt of goods?
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LEADTIME
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A physical inventory taken at some recurring interval (monthly, quarterly, or annually)
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PERIODIC INVENTORY
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A quantity of materials awaiting further processing?
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BUFFER
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A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply?
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SAFETY STOCK
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