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Exam 6: Independent Demand Inventory

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Question 41

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A product has demand of 40 units during the lead time (normally distributed),with a standard deviation of 10.What is the safety stock inventory if the organization wants to achieve a 90% cycle-service level?

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Safety stock = 1.285...

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Question 42

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The reorder point is the time between when an order is placed and when it is expected to arrive or be finished.

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Question 43

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A scheduled receipt is an order that has been promised to a customer but is currently not in inventory.

Provide four reasons to reduce inventory.

Identify a difference relating to order quantity,order timing,updating databases,and inventory size between a continuous review inventory system and a periodic review inventory system.

Provide five reasons to carry inventory.

Which of the following describes a continuous review system?

ABC inventory systems are based on the concept that all items kept in inventory are equally important.

What is the amount of pipeline inventory if 15 units are used per day,90 units can be produced per day,and the shipping time by ship,train,and truck is 30 days between the production facility and the customer?

The amount of inventory carried and the amount of storage and handling required is positively correlated.

The optimal total annual inventory cost occurs when the holding cost equals the ordering costs.

If cycle inventory has an order quantity of 550 units,what is the average inventory,assuming that the demand rate is constant and uniform?

Independent demand describes demand for items that are used to make another item or are considered to be component parts.

A periodic review system requires a precise counting of inventory only at specific times.

Carrying a very large amount of safety stock will minimize stockouts and inventory costs.