One usage of list is

to ensure the item cost is maximized.

You are watching: Inventory management policies based on abc analysis might include investing

to administer a hedge against inflation.
to tightly link production and distribution processes.
to tightly link a firm"s manufacturing with its customers" demand.

ABC analysis divides one organization"s on-hand inventory right into three great based upon

annual disagreement volume.
annual demand.
the variety of units top top hand.
unit price.

Cycle counting

is a process by i m sorry inventory records are verified.
provides a measure up of perform turnover.
assumes that all perform records need to be confirmed with the same frequency.
cannot be done in an independent need situation.

The difference(s) in between the straightforward EOQ model and also the production order quantity model is (are) that

there room no holding prices in the production order amount model.
the EOQ design does not require the presumption of known, constant lead time.
the manufacturing order quantity design does not need the assumption of instantaneous delivery.
the manufacturing order quantity design does not require the assumption of known, continuous demand.

Extra units that are held in perform to minimize stockouts room called

demand variance.
just-in-time inventory.
reorder point.
safety stock.

Inventory document accuracy would be decreased by

cycle counting.
ABC analysis.
increasing stockroom accessibility.
reorder points.

The two most crucial inventory-based concerns answered through the typical inventory design are

when to place an order and what is the price of the order.
how numerous of things to order and also what is the price of this order.
when to place an order and how numerous of things to order.
how numerous of things to order and with whom the order have to be placed.

The proper level of security stock is frequently determined by

choosing the level of safety stock that assures a given organization level.
taking the square source of the economic order quantity.
carrying adequate safety share so as to eliminate every stockouts.
minimizing expected stockout cost.

Which the the complying with is NOT a type of inventory?

raw material
finished goods

In the probabilistic model, increasing the organization level will

reduce the cost of the inventory policy.
increase the expense of the list policy.
cannot be determined.
have no impact on the expense of the list policy.

A mechanism that cause ordering ~ above a uniform time basis is dubbed a

fixed-quantity system.
reorder suggest system.
fixed-period system.

A company wishes to determine the EOQ for an object that has actually an yearly demand the 2,000 units, a price per order of $75, and also annual carrying price of $7.50 every unit. What is the EOQ?

200 units
40,000 units

A manufacturing facility is make the efforts to determine the best batch size for things that is produced intermittently. This item has an annual demand the 1,000 units, an yearly carrying price of $10 every unit, and a setup price of $400. They run 50 weeks per year, and can develop 40 units per week. What is the ideal batch size for this item?

A store wants come ensure a shelf complete of marshmallow peeps together the vacation season approaches. Daily demand for peeps is normally distributed with a average of 25 and also a standard deviation that 5. Command time is 3 days and the keep intends a 98% organization level. What is your reorder point?


A production facility is do the efforts to increase production on a maker that is right now used to produce one part. This item has an yearly demand of 1,000 units, an annual carrying cost of $10 per unit, and a setup expense of $400. They run 50 weeks every year, and also can develop 40 devices per week. What percentage of the time room they using this machine?

Policies based upon ABC evaluation might encompass investing

more in supplier advance for A items.
extra care in forecasting because that C items.
the many time and also effort verifying the accuracy of documents for B items.
more in inventory defense for C items.

A system that keeps monitor of each withdrawal or addition to inventory repetitively is

a perpetual perform system.
a fixed duration system.
a fixed amount system.

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a consistent inventory system.
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