Inventory Management Question Bank

6792 Words Feb 20th, 2013 28 Pages
Chapter 12
Inventory Management Multiple Choice Questions

60. Which of the following is not one of the assumptions of the basic EOQ model? 
A. Annual demand requirements are known and constant.
B. Lead time does not vary.
C. Each order is received in a single delivery.
D. Quantity discounts are available.
E. All of the above are necessary assumptions. Difficulty: Medium
TLO: 6
Taxonomy: Knowledge

61. Which is an application for RFID tags? 
A. Monitoring the temperature of fruit during shipment
B. Measuring the urine output of hospital patients
C. Adjusting medications for diabetics
D. Assessing audience response to a new movie
E. Estimating the results of a political election AACSB: IT
Difficulty: Hard
TLO: 1
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more frequently than annually Difficulty: Hard
TLO: 5
Taxonomy: Knowledge

75. A risk avoider would want ______ safety stock. 
A. Less
B. More
C. The same
D. Zero
E. 50% Difficulty: Easy
TLO: 9
Taxonomy: Knowledge

76. In the basic EOQ model, if annual demand doubles, the effect on the EOQ is: 
A. It doubles.
B. It is four times its previous amount.
C. It is half its previous amount.
D. It is about 70 percent of its previous amount.
E. It increases by about 40 percent. Difficulty: Hard
TLO: 6
Taxonomy: Application


77. In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will: 
A. double
B. increase, but not double
C. decrease by a factor of two
D. remain the same
E. none of the above AACSB: AS
Difficulty: Medium
TLO: 6
Taxonomy: Application

78. In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of: 
A. 20
B. square root of 200
C. 200
D. 400
E. none of these AACSB: AS
Difficulty: Medium
TLO: 6
Taxonomy: Application

79. In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is: 
A. 10
B. 12
C. 24
D. 72
E. 144 AACSB: AS
Difficulty: Medium
TLO: 6
Taxonomy: Application


80. In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately: 
A. 11
B. 20
C. 24
D. 28
E. 375 AACSB: AS
Difficulty: Medium
TLO: 6
Taxonomy:

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