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OMIS 430 Exam 3 Woosley with complete solutions
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OMIS 430 Exam 3 Woosley with complete solutions
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OMIS 430 Exam 3 WoosleyInventory - correct answer ✔✔a stock or store of goods
Independent Demand Items - correct answer ✔✔items that are ready to be sold or used
- Necessary for operations.
- Contribute to customer satisfaction.
- usually: 30% of current assets and 90% of working capital invested in inventory - correct answer
✔✔Why is inventory important?
- Raw materials and purchased parts.
- WIP
- Finished goods
- Tools and Supplies
- MRO
- Goods-in-transit - correct answer ✔✔Types of Inventory
1. to meet anticipated customer demand.
2. to smooth production requirements.
3. to decouple operations.
, 4. to protect against stockouts.
5. to take advantage of order cycles.
6. to hedge against price increases.
7. to permit operations.
8. to take advantage of quantity discounts - correct answer ✔✔What are the functions of inventory?
1. achieve satisfactory levels of customer service while keeping inventory costs within reasonable
bounds.
2. level of customer service: having right goods in right quantity in right place at right time.
3. costs of ordering and carrying inventories - correct answer ✔✔Objectives of Inventory Control
1. establish a system for tracking items in inventory.
2. make decisions about when to order and how much to order. - correct answer ✔✔What are the 2
basic functions of inventory management?
1. a system to keep track of inventory.
2. reliable forecast of demand.
3. knowledge of lead time and lead time variability.
4. reasonable estimates of: holding, ordering, and shortage costs.
5. a classification system for inventory items. - correct answer ✔✔What does effective inventory
management require?
Periodic System - correct answer ✔✔physical count of items in inventory made at periodic intervals
Perpetual Inventory System - correct answer ✔✔- system that keeps track of removals from inventory
continuously, thus monitoring current levels of each item
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