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SCM 300 Module 2 + Case
The items that are owned by a company for the purpose of present or future sale or for use in day-to-day operations. Any items the company owns can be included as part of its: a)Inventory b)Lead time c)Lot size d)None of the above - correct answer โโa) Inventory is your insurance against risk at every stage of the supply chain. - correct answer โโTrue Stock of any ITEM or RESOURCE used in an organization is considered inventory - correct answer โโTrue Raw materials, replacement parts, matintenance, repair and operations are just some of the types of inventory - correct answer โโTrue An accepted order size. Sometimes also refers to a possible order size increment: a)Inventory b)Lead time c)Lot size d)None of the above - correct answer โโc) The period of time between when an order is placed and when the order is received: a)Inventory b)Lead time
c)Lot size d)None of the above - correct answer โโb) Your company sells 200 units per week. Your supplier presently has a lead time of 4 weeks. What is the minimum level of inventory required when you place an order? a) 800 units b)400 units c)200 units d)600 units - correct answer โโa) Your company sells 200 units per week. Your supplier presently has a lead time of 4 weeks. The minimum level of inventory required when you place an order is 800 units. If you don't have 800 units when you place an order, it is very likely that you WON'T run out of stock before the next order arrives - correct answer โโFalse As your company decides between multiple suppliers, you should consider the value of having suppliers with short lead times and flexible lot sizes - correct answer โโTrue If a company has too much inventory they risk higher holding cost, which would also include damage, theft, and obsolescence - correct answer โโTrue Not carrying inventory also comes at a risk: the risk of not having inventory, the risk of not being able to satisfy the needs of the customer. - correct answer โโTrue Theft or damage to inventory, late shipments from suppliers, employee sickness, employee strike, harsh weather, machine malfunctions are examples of what type of risk? a)Company risks b)Supplier risks c)Customer risks - correct answer โโa)
c) Both a & b are correct d) None of the above - correct answer โโa) Using queries of experts to predict future demand is an example of which type of Demand Forecasting technique? a)Quantitative b)Qualitative c) Both a & b are correct d) None of the above - correct answer โโb) A specific product or service's identification code used to track inventory or catalog sales: a)Raw materials b)Stock Keeping Unit (SKU) c)Finished Goods(FG) d)Work-in0Process(WIP) - correct answer โโb) An item for which demand levels are not directly impacted by the demand of another related item: a)Independent Demand Item b)Dependent Demand Item - correct answer โโa) An item for which demand levels are not directly impacted by the demand of another related item a)Independent Demand Item b)Dependent Demand Item - correct answer โโb) A car is an example of an independent demand item - correct answer โโTrue
A tire is a dependent demand item - correct answer โโTrue All of these are examples of independent demand items EXCEPT: a) Computer b) Tires c)Refrigerators d)Dining tables - correct answer โโb) Materials, parts, or components that will be used to create an end item or service: a)Raw materials b)Work-in-Process(WIP) c)Finished Goods(FG) d)Maintenance, Repair, and Operations(MRO) - correct answer โโa) Unassembled handles, shafts, and shovel blades are all examples of: a)Raw materials b)Work-in-Process(WIP) c)Finished Goods(FG) d)Maintenance, Repair, and Operations(MRO) - correct answer โโa) Items that have begun the manufacturing process but are not yet completed: a)Raw materials b)Work-in-Process(WIP) c)Finished Goods(FG) d)Maintenance, Repair, and Operations(MRO) - correct answer โโb)
d)Maintenance, Repair, and Operations(MRO) - correct answer โโd) Desk, computers, cleaning supplies, oil/lubricant, and factory equipment are examples of: a)Raw materials b)Work-in-Process(WIP) c)Finished Goods(FG) d)Maintenance, Repair, and Operations(MRO) - correct answer โโd) Inventory that is readily available on the shelf: a)Raw materials b)Work-in-Process(WIP) c)Market Inventory d)Maintenance, Repair, and Operations(MRO) - correct answer โโc) Shovels on the shelf of Home Depot is an example of: a)Raw materials b)Work-in-Process(WIP) c)Market Inventory d)Maintenance, Repair, and Operations(MRO) - correct answer โโc) Inventory kept to account for variation/uncertainty of demand: a)Safety Stock(Buffer Stock) b)Work-in-Process(WIP) c)Market Inventory d)Maintenance, Repair, and Operations(MRO) - correct answer โโa)
100 shovels are sold per week Sunday to Saturday. Shipments arrive Sunday morning. Stores always want to start Sunday with 125 units of inventory. The additional 25 units are: a)Safety Stock(Buffer Stock) b)Work-in-Process(WIP) c)Market Inventory d)Maintenance, Repair, and Operations(MRO) - correct answer โโa) Inventory that is created and stored for future use. Typically used to absorb uneven rates of demand that may be related to seasonal demand or planned price reductions: a)Safety Stock(Buffer Stock) b)Work-in-Process(WIP) c)Market Inventory d)Anticipated Inventory - correct answer โโd) Shovels assembled in the summer and store through fall in anticipation of large winter demand would be classified as: a)Safety Stock(Buffer Stock) b)Work-in-Process(WIP) c)Market Inventory d)Anticipated Inventory - correct answer โโd) These items can be sold today, next month, next year, maybe 5 years. Quick sale is preferred: a)Safety Stock(Buffer Stock) b)Long-term inventory
Pipeline Inventory = dL - correct answer โโTrue If it takes raw materials 7 days to end up on a store shelf as shovels then lead time is 7 days. If 100 shovels are sold per day, then how much would the required pipeline inventory be? a) 700 units b)800 units c)899 units d)107 units - correct answer โโa) If it takes raw materials 7 days to end up on a store shelf as shovels then lead time is 7 days. If there are 100 shovels are sold per day, and the required pipeline inventory is 700 units then if there are not 700 or more units properly distributed in the pipeline then there will likely be a shortage within the next 7 days
- correct answer โโTrue The actual 5-year cost of a 25K car is between 40K and 50K once everything such as where you live, your lifestyle, and your driving methods are factored in. Is it possible that a 30K vehicle may ultimately cost you less? (Car Intro) - correct answer โโTrue All of these are Pros of High Inventory Levels EXCEPT: a) Having inventory will help a company address their immediate demand for product, therefore, providing higher levels of customer service b)Less money invested in inventory means more money available for other investment opportunities c)Quantity discounts such as lower unit cost may be possible d)Fewer orders will need to be placed. Possibly lower ordering costs and transportation costs e)Greater security against unexpected demand variability - correct answer โโb)
All of these are Pros of Low Inventory Levels EXCEPT: a)Fewer orders will need to be placed. Possibly lower ordering costs and transportation costs b)Less storage space required therefore costs of holding inventory may be lower c)Lower chance of inventory obsolescence and shrinkage(Pilferage, Security, Lost Items, Damaged). d). Less money invested in inventory means more money available for other investment opportunities e)Less inventory typically means less materials handling requirements - correct answer โโa) Costs of Inventory: a) Cost to purchase, holding cost, ordering cost, stockout cost b) Cost to purchase, cost, ordering cost, stockout cost c) Cost to purchase, annual cost, ordering cost, stockout cost d)None of the above - correct answer โโa) The cost to purchase the inventory: a)Cost to purchase b) Holding cost c)Ordering cost d)Stockout cost - correct answer โโa) The cost of holding the inventory: a)Cost to purchase
a)Cost to purchase b) Holding cost c)Ordering cost d)Stockout cost - correct answer โโd) Loss of the unmet sale in the present, the loss of any future sales from customers, and cost of expedited shipment are some of the examples of what type of cost: a)Cost to purchase b) Holding cost c)Ordering cost d)Stockout cost - correct answer โโd) INVENTORY CALCULATION BASICS What is the Average Amount of Inventory formula? Use ONE of the key variables below to replace 'X' in the given formula: Average Amount of Inventory = X/ Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order
a) Q b) D c) C d) H e) S - correct answer โโa) INVENTORY CALCULATION BASICS What is the Number of Orders Per Year formula? Use the key variables below to replace 'X' & 'Y' in the given formula: Number of Orders Per Year = X/Y Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a) Q,D b) D,Q c) C,H d) H,Q e) S,D - correct answer โโb)
C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a) 12 b) 14 c) d) None of the above FORMULA & VARIABLE HINTS WILL NOT BE GIVEN ON EXAM - correct answer โโa) INVENTORY CALCULATION BASICS If 12,00 units are the expected demand for the year, and a company orders 1,000 units per order then what is the time between orders (in weeks): Time Between Orders (in weeks) = (Q/D)* Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a) 4. b) 4. c) 5 d) None of the above
FORMULA & VARIABLE HINTS WILL NOT BE GIVEN ON EXAM - correct answer โโa) INVENTORY CALCULATION BASICS What is the Time Between Orders(in weeks) formula? Use the key variables below to replace 'X' & 'Y' in the given formula: Time Between Orders(in weeks) = (X/Y) * 52 Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a) Q,D b) D,Q c) C,H d) H,Q e) S,D - correct answer โโa) TC formula can be written as: a) TC = DC + (Q/2) * H + (D/Q)*S b)TC = DC + AHC + AOC c) Both a & b are correct - correct answer โโc)
Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a)Annual Cost to Purchase Inventory b)Annual Holding Cost(AHC) c)Annual Ordering Cost(AOC) VARIABLE HINTS WILL NOT BE GIVEN ON EXAM - correct answer โโb) Total Annual Inventory Cost The 'DC' in the formula is: TC = DC + (Q/2) * H + (D/Q)*S Q - Lot Size D - Annual Demand C - Cost to purchase one unit of inventory H - Cost to hold one unit of inventory for one year S - Cost to place a single order a)Annual Cost to Purchase Inventory b)Annual Holding Cost(AHC)
c)Annual Ordering Cost(AOC) VARIABLE HINTS WILL NOT BE GIVEN ON EXAM - correct answer โโa) AHC > AOC means: a) Holding costs are too high b)Holding costs are too low - correct answer โโa) AOC > AHC means: a) Holding costs are too high b)Holding costs are too low - correct answer โโb) All of the following are true about Economic Order Quantity(EOQ) EXCEPT: a)EOQ is the lot size(Q) that minimize total annual inventory cost(TC) b) It is seen as the optimal lot size(order size) c)The formula for Economic Order Quantity: EOQ = Sqrt[(2DS) / H] d)EOQ can be described as the lot size where annual holding cost is equal to annual ordering cost e) None. All of the above are true - correct answer โโe) All of the following are reasons why a company may choose to "make" the product or service EXCEPT:
