Inventory Management Test Questions
Course Introduction
Inventory Management explores the principles, strategies, and techniques necessary to effectively oversee the flow and storage of goods within an organization. This course covers critical topics such as inventory control systems, demand forecasting, order quantity decisions, stock replenishment policies, and the use of technology in inventory management. Students will learn how to balance the costs associated with holding inventory against the need to meet customer demand, minimize stockouts, and optimize supply chain efficiency. Through case studies and practical applications, the course equips students with the tools to make data-driven decisions that improve operational performance and support organizational objectives.
Recommended Textbook
Introduction to Operations and Supply Chain Management 3rd Edition by Cecil B. Bozarth
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Chapter 1: Introduction to Operations and Supply Chain Management
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Q1) Describe the operations function's transformation process and provide an example for each element.
Answer: The transformation process view of operations management holds that inputs are transformed into outputs.Examples of inputs are raw materials,labor,capital,equipment,information,and intangible needs.The transformation process is the conversion of these inputs using either manufacturing or service operations (and sometimes both).Manufacturing operations might be painting,welding,machining,or assembling.Outputs of the transformation process are tangible goods,fulfilled needs,and satisfied customers.Specific examples may vary depending on the company chosen.
Q2) An activity or firm that is positioned earlier in the supply chain relative to another activity or firm is said to be ________.
Answer: upstream
Q3) To participate in a supply chain,a firm must actually handle the physical goods at some point.
A)True
B)False
Answer: False
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Chapter 2: Operations and Supply Chain Strategies
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Q1) Saba listened in disbelief as the customer service representative droned on,concluding with,"Your cable installer will perform the installation between 8 a.m.and 4 p.m.on the day you have requested." He knew he would have to take the day off to accommodate the service provider's ridiculously wide ________,so he began to think of undetectable diseases he might come down with that day.
Answer: delivery window
Q2) ________ are tangible resources such as buildings,equipment,and computer systems.
Answer: Structural elements
Q3) Which of the following statements about functional strategy is BEST?
A)Functional strategies are not impacted by the mission statement;instead they are impacted by the overall business strategy.
B)Functional strategies determine the overall business strategy.
C)Many functional-level strategies could readily be described as cross-functional.
D)A firm's operations and supply chain strategy is more important than their marketing,finance and engineering strategies.
Answer: C
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Chapter 3: Process Choice and Layout Decisions in Manufacturing and Services
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Sample Questions
Q1) According to the law of variability,the ________ the random variability either demanded of the process or inherent in the process itself or in the items processed,the ________ productive the process is.
Answer: greater,less;lower,more
Q2) The back room refers to the part of the service process where the customer is not visible to the other customers waiting for service.
A)True
B)False Answer: False
Q3) A manager deciding where 6 departments could be located in a six room office building has over 500 possible arrangements.
A)True
B)False Answer: True
Q4) No manufacturing process can be best at everything.
A)True
B)False
Answer: True
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Chapter 4: Business Processes
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Sample Questions
Q1) Describe continuous improvement and business process reengineering and compare their advantages and disadvantages in relation to each other.
Q2) A(n)________ process performs the main,value-added activities of an organization.
Q3) An arrow in a process map represents a:
A)move activity.
B)start or finish point.
C)delay.
D)creation of a document.
Q4) The majority of the total operating budget for most organizations is:
A)engineering costs.
B)advertising costs.
C)supply chain costs.
D)equipment maintenance costs.
Q5) The magnitude of changes created by a continuous improvement program is generally larger than those created by a business process reengineering program.
A)True
B)False
Q6) The elapsed time needed to complete a business process is called ________.
Page 6
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Chapter 5: Managing Quality
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Sample Questions
Q1) A quality perspective that focuses on whether or not a product was made or a service was performed as intended is the:
A)performance perspective.
B)value perspective.
C)conformance perspective.
D)intention perspective.
Q2) What are the seven core ideas of total quality management?
Q3) Which of these statements about the zero defects view of the total cost of quality is BEST?
A)Failure costs dictate the shape of the total cost curve.
B)In general,appraisal costs exceed prevention costs.
C)As the defect rate increases,appraisal costs increase.
D)As the defect rate increases,prevention costs increase.
Q4) A(n)________ cost is incurred by a company to assess its quality levels
Q5) ________ measures of interest refer to the presence or absence of a particular characteristic.
Q6) What are the eight dimensions of quality as defined by David Garvin? Provide a short description of how each is different and then use them to evaluate an example product or service of your choosing.
Page 7
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Chapter 6: Managing Capacity
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Sample Questions
Q1) In waiting line theory,a customer service attendant is a(n)________.
Q2) Business at the Kwik-E-Mart is brisk,with customers arriving at a rate of six per hour on average.Ringing up purchases is an easy matter for owner/operator Apu;he can usually do so in 2 minutes.If both arrival and service rates are Poisson distributed,how many customers are in the store on average?
A)0.05
B)0.16
C)0.25
D)0.50
Q3) Jimbo evaluates levels of demand ranging from 100 to 2,500 students per year.Which location has the lowest cost for the greatest range of students throughout this continuum?
A)Location A
B)Location B
C)Location C
D)Location D
Q4) The relationship between the number of units within system boundaries and the time they spend within the system on average is formalized in ________.
Q5) How many customers are in the Piggly Wiggly at any given time?
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Chapter 7: S Advanced Waiting Line Theory and Simulation
Modeling
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Sample Questions
Q1) The bank manager of a busy downtown location found herself unable to find good teller help so she invested in an ATM to handle the routine withdrawals that tended to occupy an inordinate amount of the teller's time.Before she installed the ATM she found that customers were arriving on average every 60 seconds (Poisson distributed)and it took a teller 20 seconds (exponentially distributed)to process their request.The ATM is able to maintain a constant 30 second service time.What is the impact on the waiting time for the customers?
A)There is no change.
B)The wait in the ATM line is 50% shorter than the wait in the teller line.
C)The wait in the ATM line is 50% higher than the wait in the teller line.
D)The wait in the ATM line is 25% shorter than the teller line.
Q2) Each outcome of flipping a fair coin is completely independent of the previous flip.This outcome is known as:
A)simulation.
B)Monte Carlo.
C)50/50.
D)memoryless.
Q3) If 5 minutes pass between customer arrivals,then the ________ is 12 per hour.
Q4) What is Monte Carlo simulation and how is one conducted?
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Chapter 8: Supply Management
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Sample Questions
Q1) A recent trend in supply management is a move towards a more sustainable supply chain.
A)True
B)False
Q2) The purchasing team examined all of their purchasing patterns in order to identify any irregularities or possible areas of cost savings in a little scheme they liked to call:
A)internal auditing.
B)purchase consolidation.
C)spend analysis.
D)cooking the books.
Q3) Firms do not compete only against global competitors,but against:
A)their suppliers.
B)themselves.
C)the customers of their competitors.
D)their competitors' supply chains.
Q4) ________ are high level,often strategic decisions regarding which products or services will be provided internally and which will be provided by external supply chain members.
Q5) Profit margin is the ratio of ________ to ________.
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Chapter 9: Logistics
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Sample Questions
Q1) Which of the following is a type of material handling equipment?
A)3PL
B)ASRS
C)LTL
D)RFID
Q2) Universal Exports has several crates it needs to send from the United Kingdom to North Korea.They have located a firm that specializes in transferring cargo to the actual carrier that will bring the crates into North Korea.This firm could be described as:
A)an interlocuter.
B)a customs broker.
C)a freight forwarder.
D)a mercenary.
Q3) A(n)________ can handle shipments on an as-needed basis with no long-term contract required.
Q4) What are the three main categories of logistics information systems? What function does each serve?
Q5) Define logistics and explain why it is critical.
Q6) ________ is a form of warehousing in which smaller outgoing shipments are created from large incoming shipments.
11
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Chapter 10: Forecasting
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Sample Questions
Q1) The slope of the regression equation is positive if the r-squared value is greater than 0.0.
A)True
B)False
Q2) Supply chain partners might use a(n)________ to develop joint sales and operations plans and projections of output if they have agreed on a common set of objectives.
Q3) Use a three period weighted moving average with W<sub>t</sub> = 0.7,W<sub>t-1</sub> = 0.2,and W<sub>t</sub><sub>-2</sub> = 0.1 to forecast demand for July.
A)235.2
B)195.6
C)158.8
D)180.4
Q4) A seasonal pattern in time series data is evident when the level of the variable of interest moves erratically up or down from one period to the next.
A)True
B)False
Q5) ________ is unpredictable movement from one time period to the next
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Chapter 11: Sales and Operations Planning Aggregate Planning
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Q1) When the products and services have very different resource requirements and the mix is unstable from one period to the next,bottom-up planning works best.
A)True
B)False
Q2) Your book describes three phases in the implementation of sales and operations planning in an organization.What are the three phases and what takes place in each?
Q3) The Super Bowl is right around the corner and Gowgem Hotels is aquiver with anticipation.They'd like to price their rooms at their three city locations,next to the stadium,near the airport,and in the suburbs,as high as possible but still achieve 100% occupancy.The approach they should take to this opportunity is:
A)yield management.
B)a tiered workforce.
C)a load profile.
D)beagling.
Q4) Describe how both top-down and bottom-up planning work and the situations where one approach is superior to the other.
Q5) How can and why should a firm link S&OP throughout the supply chain?
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Chapter 12: Managing Inventory Throughout the Supply Chain
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Q1) The excess cost of an item is the profit you would have made on it.
A)True
B)False
Q2) A hospital's biomedical repair shop uses a 4-week periodic system to maintain the inventory on the blood pressure cuff repair parts.They use an average 40 adult arm cuffs with a standard deviation of 6 cuffs every four weeks.Cuffs aren't the most critical item they carry,but the manager would like to avoid the embarrassment of a stockout at least 95% of the time.What should their restocking level be?
A)40 cuffs
B)46 cuffs
C)50 cuffs
D)52 cuffs
Q3) Define the bullwhip effect and discuss the advantages of holding inventory far upstream or downstream in the supply chain.
Q4) Extra inventory that is held to protect against uncertainties in either demand or lead time is called ________.
Q5) The ________ is an extreme change in the supply position upstream generated by a small change in demand downstream.
Page 14
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Chapter 13: Managing Production Across the Supply Chain
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Sample Questions
Q1) What organizational disciplines are required in order for an organization to successfully run a material requirements planning system?
Q2) Which of these actions would tend to make an MRP system less nervous?
A)using the same component,such as a fastener,at multiple levels throughout the product structure tree
B)eliminating lot size requirements wherever possible
C)increasing the number of levels in a product structure tree
D)increasing the minimum order quantities only at the highest level of a bill or materials
Q3) A(n)________ is a record or graphical rendering that shows how all the subassemblies,intermediates,parts and raw materials are put together to make the Level 0 item.
Q4) Component J is ordered on February 1,is received,and is ready to use on February 8.Its planning lead time is seven days.
A)True
B)False
Q5) For a given job,the amount of processing time remaining divided by the amount of time until the job is due is its ________.
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Chapter 14: S Supply Chain Information Systems
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Q1) Which of these is NOT an essential characteristic of the cloud model?
A)preservation of metadata
B)on-demand self-service
C)broad network access
D)resource pooling
Q2) A typical CRM application is:
A)design collaboration.
B)sell process.
C)sourcing decisions.
D)supply collaboration.
Q3) Business process modeling tools allow the user to:
A)connect to the cloud without using the internet.
B)manage internal supply chain relationships.
C)manage external supply chain relationships.
D)simulate the performance of a new process.
Q4) An organization can use ________ as a repository to access documents or other files from anywhere in the world whenever they are needed.
Q5) What is the purpose of an ERP system and what advantages does it hold over the more traditional system it replaces?
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Chapter 15: Jitlean Production
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Sample Questions
Q1) Lean supply chain management focuses on eliminating waste:
A)in a firm's sourcing and logistics activities.
B)within a firm's internal operations.
C)in flows of information and money among supply chain partners.
D)in all of the above areas.
Q2) ________ combines the focus on waste reduction with the discipline of define,measure,analyze,improve,and control.
Q3) A(n)________ is a production control approach that uses containers,cards,or visual cues to control production and movement of goods throughout the supply chain.
Q4) Liversuch Industries uses a kanban system to manage production of the J-15 subassembly.They have an hourly demand for 250 units and use containers that can hold 50 units each.It takes 90 minutes to fill and move a container of parts to the right place on the J-15 line that is currently rated at a 20% safety factor.How many production cards are needed?
Q5) Describe the movements of parts and kanbans in a two-card kanban system.
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Chapter 16: Managing Projects
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Q1) A forward pass through a network is used to determine the earliest start and finish times for each project activity.
A)True
B)False
Q2) A(n)________ is a graphical tool that should be used to show a project's progress as time elapses.
Q3) One of the primary characteristics of projects as a form of work is the movement of personnel from project to project.
A)True
B)False
Q4) Crashing a project refers to the technique that minimizes completion cost of the project.
A)True
B)False
Q5) In what ways are projects distinct from typical business activities?
Q6) The earliest start time of an activity is dependent on the earliest finish time of its immediate predecessors.
A)True
B)False
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Chapter 17: Developing Products and Services
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Q1) The operations and supply chain functions develop detailed process maps of the operations and supply chain flows and test new processes in the:
A)concept development phase.
B)planning phase.
C)design and development phase.
D)commercial preparation phase.
Q2) The roof of the house of quality displays conflicts between the voice of the customer and product characteristics and permits designers to rapidly identify trade-offs.
A)True
B)False
Q3) Customers are often brought in to lend their thoughts during the:
A)concept development phase.
B)planning phase.
C)design and development phase.
D)commercial preparation phase.
Q4) In ________,the supplier works with the customer to jointly design the product.
Q5) The ________ is the process whereby many ideas are considered at the concept development phase but few ideas make it to the commercial development and launch phases.
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