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51 Cards in this Set
- Front
- Back
Service parts sold to the repair shops are examples of ______ demand |
independent |
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T/F: Dependent Demand must be forecasted based on market conditions. |
False, Independent Demand CAN be forecasted based on market conditions |
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The four broad categories of inventory are: |
raw materials, work-in-process, finished goods, and maintenance, repair and operating (MRO) |
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_____ shows how many times a firm turns over its inventory in anaccounting period. |
Inventory turnover ratio |
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For Inventory turnover ratio, ____ is better because its faster |
more |
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The term ______ is synonymous with physically counting inventory. |
Cycle Counting |
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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. |
ABC inventory control |
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_____ is an inventory model used to determine the optimal order size thatminimizes total annual inventory costs. |
The EOQ (Economic Order Quantity) Model |
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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. |
annual usage, physical inventory |
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_____ is considered an eventual replacement of barcode because of its ability to store huge amount of information to differentiate specific unit of good. |
Radio Frequency Identification (RFID) |
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T/F: Electronic Product Code (EPC) is the only RFID standard adopted by the commercialsector and the U.S. Department of Defense. |
False, EPC and ISO |
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An _________ does not require direct line of sight to read the information stored in an RFID tag |
RFID reader |
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The _____, also known as the economic order quantity, is the optimal order size in termsof cost because it minimizes the annual total inventory cost. |
EOQ |
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The ____ is the lot size where inventory holding costs equal annual ordering costs. |
EOQ |
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The ______ is the sum of the annual purchase cost, the annualholding cost, and the annual ordering cost. |
total annual inventory cost |
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Relaxing the _______ of the EOQ model results in theEconomic Manufacturing Quantity model. |
instantaneous replenishment assumption |
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The optimal order quantity for the quantity discount model may exist at a ______ or on either one of the feasible ____. |
price breakpoint; EOQs |
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In the Economic Manufacturing Quantity model, the annual consumption rate must be ________ with the annual production rate. |
simultaneous |
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When demand and lead time are constant, _____ is the demand during lead time. |
reorder point |
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The ______ system is more expensive to monitor compared to theperiodic review inventory system. |
continuous review inventory |
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T/F: The (s, S) continuous review inventory system orders the same quantity Q whenphysical inventory reaches the reorder points. |
False. They order different quantities and different times |
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The _____ system reviews physical inventory at specific points intime. |
periodic |
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_____ 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 |
Dependent Demand |
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The demand for final products and has a demand pattern affected by trends, seasonal patterns, and general market conditions |
Independent Demand |
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The primary functions of inventory are to: _____ from uncertainty in the marketplace and ____ dependencies in the supply chain (e.g., safety stock) |
buffer; decouple |
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Unprocessed purchase inputs |
Raw Materials |
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Partially processed materials not yet ready for sales |
WIP |
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Products ready for shipment |
Finished Goods |
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Materials use in production (e.g., cleaners and brooms) |
Maintenance, repair, and operating (MRO) |
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Direct costs, indirect costs, fixed costs, variable costs, order costs, setup costs, and holding or carrying costs are examples of ______ |
Inventory costs |
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Directly traceable to unit produced (e.g., labor) |
Direct costs |
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Cannot be traced directly to the unit produced (e.g., overhead) |
Indirect costs |
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Independent of the output quantity (e.g., buildings, equipment, and plant security) |
Fixed costs |
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Vary with output level (e.g., materials) |
Variable Costs |
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direct variable costs for making an order, in mfg _____ are related to machine setups |
order costs, setup costs |
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Incurred for holding inventory in storage |
holding or carrying costs |
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What are two inventor investments? |
Absolute value of inventory and inventory turnover or ratio |
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_____ determines which inventories should be counted and managed more closely than others |
ABC inventory Control system |
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_____ 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 |
A Items |
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_____ items account for the other 80% of total items and only 20% of the cost. |
B and C |
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______ 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 |
B items |
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____ items have the lowest value and hence the lowest priority 40% of the items make up 5% of the annual dollar usage |
C items |
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Under RFID ______, goods are automatically counted and logged as they enter the supply warehouse |
materials management |
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Under RFID _____, assembly instructions are encoded on an RFID tag and provide information to computer controlled assembly devices |
manufacturing |
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Under RFID ______, shipments leaving automatically update ERP to trigger a replenishment order and notify customer for delivery tracking |
Distribution Center |
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Under RFID _______, there are no check out lines as scanners link RFID tagged goods in shopping cart with buyers credit card |
Retail store |
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A quantitative decision model based on the trade-off between anual inventory holding costs and annual order costs |
EOQ Model |
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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 |
EOQ |
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____ considers the tradeoff between purchasing in large quantities to take advntage of the price discount nd issuing fewer orders, against holding higher inventory |
Quantity Discount Model, or price-break model |
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in the ____ model, Inventory builds up gradually during the production period rather than at once as in the EOQ model |
EMQ |
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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 |
Statistical Reorder Point |