Inventory Management CCEPI

The objectives of inventory management include the following except:

• Maximizing customer service level

• Achieving low-cost plant operations

• Balancing the blocked stock and unrestricted

• Minimizing inventory investment

The following statement is correct in relation to ABC Inventory classification, EXCEPT:

• Applies the Pareto’s law.

• Class C will need close attention to monitor.

• Class A items are the most critical items.

• Based on annual consumption.

Which one is NOT part of inventory holding cost

• Capital cost

• Storage cost

• Risk cost

• Ordering cost

Inventory valuation can be performed based on below method, EXCEPT:

• FIFO

• LIFO

• Standard Cost

• Estimate

Which is correct statement regarding Statistical Safety Stock

• Deviation of demand during lead time assumed to be normally distributed

• Using Mean Absolute Deviation (MAD) is more accurate than Standard Deviation

• It is suggested to achieve 100% of service level to increase higher profitability

• There is only one variability exists in the formula

A regional warehouse orders items once a week from a central warehouse. The lead time is 3 days. The working days is 5 days per week. The demand of RTD coffee demand is relatively steady at 20 units per day. Safety stock is set at 2 days’ supply. What is the target level?

• 500

• 400

• 300

• 200

What is the name of materials used in the production process that do not become part of the product?

• raw materials

• work-in-process

• finished goods

• MRO items

Which of the following company objectives are in conflict?

• maximum customer service and low-cost plant operation

• low-cost plant operation and cash flow

• maximum inventory investment and customer service

• high cash flow and profitability

A company has 9,000 units on hand and the annual usage is 48,000 units. There are 240 working days in the year. What is the number of days supply?

• 40 days

• 25 days

• 50 days

• 45 days

Which of the following provides a buffer for seasonal demand?

• lot-size inventory

• fluctuation inventory

• anticipation inventory

• decoupling inventory