Omis 320 Chapter 7

Front 1

Service parts sold to the repair shops are examples of ______ demand

Back 1

independent

Front 2

T/F: Dependent Demand must be forecasted based on market conditions.

Back 2

False, Independent Demand CAN be forecasted based on market conditions

Front 3

The four broad categories of inventory are:

Back 3

raw materials, work-­in-­process, finished goods, and maintenance, repair and operating (MRO)

Front 4

_____ shows how many times a firm turns over its inventory in anaccounting period.

Back 4

Inventory turnover ratio

Front 5

For Inventory turnover ratio, ____ is better because its faster

Back 5

more

Front 6

The term ______ is synonymous with physically counting inventory.

Back 6

Cycle Counting

Front 7

The ______ system categorizes inventory items into three groups, A, B,and C. A items are given highest priority, while C items have the lowest priority. Prioritization maybe based on annual dollar usage, shelf life, or sales volume.

Back 7

ABC inventory control

Front 8

_____ is an inventory model used to determine the optimal order size thatminimizes total annual inventory costs.

Back 8

The EOQ (Economic Order Quantity) Model

Front 9

The ABC inventory matrix shows an ABC inventory classification based on _____ on the vertical axis and an ABC inventory classification based on _____ on thehorizontal axis.

Back 9

annual usage, physical inventory

Front 10

_____ is considered an eventual replacement of barcode because of its ability to store huge amount of information to differentiate specific unit of good.

Back 10

Radio Frequency Identification (RFID)

Front 11

T/F: Electronic Product Code (EPC) is the only RFID standard adopted by the commercialsector and the U.S. Department of Defense.

Back 11

False, EPC and ISO

Front 12

An _________ does not require direct line of sight to read the information stored in an RFID tag

Back 12

RFID reader

Front 13

The _____, also known as the economic order quantity, is the optimal order size in termsof cost because it minimizes the annual total inventory cost.

Back 13

EOQ

Front 14

The ____ is the lot size where inventory holding costs equal annual ordering costs.

Back 14

EOQ

Front 15

The ______ is the sum of the annual purchase cost, the annualholding cost, and the annual ordering cost.

Back 15

total annual inventory cost

Front 16

Relaxing the _______ of the EOQ model results in theEconomic Manufacturing Quantity model.

Back 16

instantaneous replenishment assumption

Front 17

The optimal order quantity for the quantity discount model may exist at a ______ or on either one of the feasible ____.

Back 17

price breakpoint; EOQs

Front 18

In the Economic Manufacturing Quantity model, the annual consumption rate must be ________ with the annual production rate.

Back 18

simultaneous

Front 19

When demand and lead time are constant, _____ is the demand during lead time.

Back 19

reorder point

Front 20

The ______ system is more expensive to monitor compared to theperiodic review inventory system.

Back 20

continuous review inventory

Front 21

T/F: The (s, S) continuous review inventory system orders the same quantity Q whenphysical inventory reaches the reorder points.

Back 21

False. They order different quantities and different times

Front 22

The _____ system reviews physical inventory at specific points intime.

Back 22

periodic

Front 23

_____ describes the internal demand for parts based on the demand of the final product in which the parts are used. Subassemblies, components, and raw materials are examples of dependent demand items

Back 23

Dependent Demand

Front 24

The demand for final products and has a demand pattern affected by trends, seasonal patterns, and general market conditions

Back 24

Independent Demand

Front 25

The primary functions of inventory are to: _____ from uncertainty in the marketplace and ____ dependencies in the supply chain (e.g., safety stock)

Back 25

buffer; decouple

Front 26

Unprocessed purchase inputs

Back 26

Raw Materials

Front 27

Partially processed materials not yet ready for sales

Back 27

WIP

Front 28

Products ready for shipment

Back 28

Finished Goods

Front 29

Materials use in production (e.g., cleaners and brooms)

Back 29

Maintenance, repair, and operating (MRO)

Front 30

Direct costs, indirect costs, fixed costs, variable costs, order costs, setup costs, and holding or carrying costs are examples of ______

Back 30

Inventory costs

Front 31

Directly traceable to unit produced (e.g., labor)

Back 31

Direct costs

Front 32

Cannot be traced directly to the unit produced (e.g., overhead)

Back 32

Indirect costs

Front 33

Independent of the output quantity (e.g., buildings, equipment, and plant security)

Back 33

Fixed costs

Front 34

Vary with output level (e.g., materials)

Back 34

Variable Costs

Front 35

direct variable costs for making an order, in mfg _____ are related to machine setups

Back 35

order costs, setup costs

Front 36

Incurred for holding inventory in storage

Back 36

holding or carrying costs

Front 37

What are two inventor investments?

Back 37

Absolute value of inventory and inventory turnover or ratio

Front 38

_____ determines which inventories should be counted and managed more closely than others

Back 38

ABC inventory Control system

Front 39

_____ items are given highest priority with larger safety stocks. They account for approximately 20% of the total items, and are about 80% of the total inventory cost

Back 39

A Items

Front 40

_____ items account for the other 80% of total items and only 20% of the cost.

Back 40

B and C

Front 41

______ items require closer management since they are relatively more expensive per unity and require more effort to purchase or make and may be more prone to obsolencence. 40% of the items make up 15% of the annual dollar usage

Back 41

B items

Front 42

____ items have the lowest value and hence the lowest priority 40% of the items make up 5% of the annual dollar usage

Back 42

C items

Front 43

Under RFID ______, goods are automatically counted and logged as they enter the supply warehouse

Back 43

materials management

Front 44

Under RFID _____, assembly instructions are encoded on an RFID tag and provide information to computer controlled assembly devices

Back 44

manufacturing

Front 45

Under RFID ______, shipments leaving automatically update ERP to trigger a replenishment order and notify customer for delivery tracking

Back 45

Distribution Center

Front 46

Under RFID _______, there are no check out lines as scanners link RFID tagged goods in shopping cart with buyers credit card

Back 46

Retail store

Front 47

A quantitative decision model based on the trade-off between anual inventory holding costs and annual order costs

Back 47

EOQ Model

Front 48

Assumptions of the ______ model are:

Demand must be known and onstant

Delivery time is known and constant

Replenishment is instantaneous

Price is constant

Holding cost is known and constant

Ordering cost is known and constant

and Stock outs are not allowed

Back 48

EOQ

Front 49

____ considers the tradeoff between purchasing in large quantities to take advntage of the price discount nd issuing fewer orders, against holding higher inventory

Back 49

Quantity Discount Model, or price-break model

Front 50

in the ____ model, Inventory builds up gradually during the production period rather than at once as in the EOQ model

Back 50

EMQ

Front 51

The lowest inventory level at which a new order must be placed to avoid a stockout. Demand and delivery lead time are never certain and require safety stock

Back 51

Statistical Reorder Point