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OSCM 373: EXAM 3 questions with 100% correct answers
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OSCM 373: EXAM 3 questions with 100% correct answers
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OSCM 373: EXAM 3Objectives of Inventory Management - correct answer ✔✔1. Satisfactory levels of customer service
- having the right goods available in the right quantity in the right place at the right time
2. While keeping inventory costs (ordering and carrying) within reasonable bounds (minimize)
Performance Measures - correct answer ✔✔1. Customer Satisfaction
- number and quantity of backorders
- customer complaints
2. Keeping Costs Low
- Inventory Turnover
ABC Classification System - correct answer ✔✔Classifying inventory according by importance, and
allocating control efforts accordingly
A Items: Very Important
- 10-20% of inventory
- 60-70% of dollar value
B Items: Moderately Important
C Items: Least Important
- 50-60% of inventory
- 10-15% of dollar value
To classify arrange by values in descending order
, Periodic System - correct answer ✔✔Physical count of items in inventory made at periodic intervals
Pros:
- many items ordered at same time
- savings in processing and shipping of orders
Cons:
- lack of control between reviews
- have to keep extra stock to protect against shortages
Perpetual System - correct answer ✔✔System that keeps track of removals from inventory continuously,
thus monitoring current levels of each firm
Pros:
- continuous control
- can optimize quantity and place orders when inventory drops to a predetermined level
Cons:
- added cost of record keeping
- usually has to be accompanied by a periodic physical count
Reorder Point - correct answer ✔✔specifies the level to which the inventory balance of an item must fall
before an order to replenish stock is initiated
Determinants:
- rate of demand
- lead time (interval between ordering and receiving the orders)
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