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OSCM 373 exam 3 questions with verified solutions already passed
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OSCM 373 exam 3inventory management - correct answer ✔✔establish a system for tracking items in inventory and makes
decisions about what to order and how much
A-B-C approach classification system - correct answer ✔✔Classifying inventory according to some
measure of importance, and allocating control efforts accordingly
A items (ABC) - correct answer ✔✔very important, 10-20% of the number of items in the inventory, and
about 60-70% of the annual dollar value
B items (ABC) - correct answer ✔✔moderately important
C items (ABC) - correct answer ✔✔50-60% of the number of items in inventory but only 10-15% of the
annual dollar value
How to do ABC classification - correct answer ✔✔1. For each item, multiply annual volume by unit price
to get annual dollar value
2. arrange annual values in descending order
in an A-B-C system, C items typically represent about this percentage of items: - correct answer ✔✔50%
Periodic System - correct answer ✔✔physical count of items in inventory made at periodic intervals.
many items ordered at the same time; savings in processing and shipping of orders
perpetual inventory system - correct answer ✔✔System that keeps track of removals from inventory
continuously, thus monitoring current levels of each item. continuous control; can optimize Q and place
orders when inventory drops to a predetermined minimum level
periodic system cons - correct answer ✔✔lack of control between reviews; having to keep extra stock to
protect against shortages
,perpetual inventory system cons - correct answer ✔✔added cost of record keeping; usually has to be
accompanied by a periodic physical count
when is the best time to embed the RFID tag in the good? - correct answer ✔✔assembly
Economic Order Quantity models - correct answer ✔✔identify the optimal order quantity by minimizing
the sum of annual costs that vary with order size and frequency
re-order point - correct answer ✔✔when the quantity on hand of an item drops to this amount
(quantity-trigger), the item is reordered
what does Economic Order Quantity (EOQ) solve - correct answer ✔✔how much to order
holding (carrying) costs - correct answer ✔✔cost to carry an item in inventory for a length of time,
usually a year
ordering costs (setup costs) - correct answer ✔✔the costs involved in placing an order or preparing
equipment for a job
what is not a component of holding costs? - correct answer ✔✔delivery
what should you do to prevent running out of gas (inventory)? - correct answer ✔✔increase ROP
(amount left)
Using the EOQ model, if an item's holding cost increases, its order quantity will: - correct answer
✔✔decrease
Single-period model - correct answer ✔✔model for ordering of perishables and other items with limited
useful lives
, the goal of the single-period model is to - correct answer ✔✔identify an order quantity that will
maximize profit by minimizing the long-run excess and shortage costs
Service Level - correct answer ✔✔probability that demand will not exceed the stocking level (S)
high inventory (costly) leads to - correct answer ✔✔a higher service-level and a low probabiliy to stock-
out
low inventory leads to - correct answer ✔✔a lower service-level and a high probability to stock-out
quality - correct answer ✔✔the ability of a product or service to consistently meet or exceed customer
expectations
Dimensions of Service Quality - correct answer ✔✔convenience, reliability, responsiveness, time,
assurance, courtesy, tangibles, consistency
dimensions of product (good) quality - correct answer ✔✔performance, aesthetics, special features,
conformance, reliability, durability, perceived quality, serviceability
internal failure costs - correct answer ✔✔Costs incurred to fix problems that are detected before the
product/service is delivered to the customer.
external failure costs - correct answer ✔✔All costs incurred to fix problems that are detected after the
product/service is delivered to the customer
tasting fires is an example of - correct answer ✔✔appraisal costs
courtesy gift cards are an example of: - correct answer ✔✔external failure cost
what are the two basic questions concerning variability? - correct answer ✔✔is the process in control
and what is the process capability
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