Warehouse

1. The______is a statement of the percentage of time there is no stockout.

• service level

• safety stock

• safety factor

• B&C are correct

Economic Order Quantity is

• The ideal order quantity a company should purchase to minimize inventory costs.

• The best applied in situations where  ordering, and holding costs remain constant over time and demand variable

• Also formula determines the number of safety stock

• All the correct answers 

3. Safety stocks are used to against two external factors:

• Demand uncertainty and lead time uncertainty.

• The ordering cost increases and the carrying cost increases.

• Demand uncertainty and the reorder point is not stable.

• Out of stock and the total price is high.

4. How does the fixed-order model react compared to the fixed-period model when demand is a variable?

• The same

• Difference

5. What is the order point? 

• A level of inventory in stock at which a old order is placed

• A level of inventory out stock at which a new order is placed

• A level of inventory in stock at which a new order is placed

• A level of inventory in stock at which a new order is not placed

6. With the safety stock, how can we calculate the order point?

• OP = DDLT 

• OP = DDLT + SS

• OP = DDLT - SS

• OP = SS - DTLT

7. A service level of 90% means? 

• The probability that a stockout will occur is 10%

• The certainty that stock out occurs.

• The probability that demand will be met during the lead time is 90%

• The probability that a stockout will occur is 90%

8. The Office Supply Shop estimates that the average demand for a popular ball-point pen is 4,000 pens per week with a standard deviation of 800 pens. The average lead time from the distributor is 1 week. If the management wants a 95 percent cycle - service level, what should the order point be?

• 5920 pens

• 5024 pens

• 5320 pens

• 7400 pens

9. The store S has observed a stable monthly demand for its line of mobile phone iPhone of 100 pcs per month. The store incurs a fixed cost of $2,000 every time it places an order for additional iPhones. The store pays $200 per iPhone. The store’s out-of-pocket costs of storing an iPhone for a year are about 10% and the opportunity cost of capital is 15%. The optimal order quantity is:

• 310

• 309

• 89

• 90

10. Assume: D= 40 per working day; L= 8 days; R= 10 days; SS= 120 units.

An order is to be placed this week, I= 150 units. 

a. What is the target level? 

b. What quantity should be ordered this time?

• a. T=840 units b. Q=690 units

• a. T=850 units b. Q=600 units

• a. T=840 units b. Q=700 units

• a. T=750 units b. Q=690 units