OMIS 338- EXAM 2 Questions With 100% Verified Answers

OMIS 338- EXAM 2 Questions With 100% Verified Answers Inventory Management - answerObjective of inventory management is to strike a balance between inventory investment and customer service Importance of inventory - answermost expensive assets less inventory= lower costs but greater chance of running out more inventory raises costs but always keeps customers happy Functions of inventory - answerProvide a selection of goods for anticipated demands separate various parts of the production process advantage of quantity discounts hedge against inflation Inventory Example - answerDepartment store stockroom/warehouse grocery store auto work-in-process Types of inventory - answerRaw material work-in-process finished goods maintenance/repair/oeprating (MRO) Raw material - answerpurchased but not processed work in process - answerundergone some changes but not completed finished goods - answercompleted product awaiting shipment maintenance/repair/operating (MRO) - answernecessary to keep machinery and processes productive material flow cycle - answerinput -- wait for inspection -- wait to be moved -- move time -- wait in queue for operator -- setup time -- run time -- output managing inventory - answerusing ABC analysis keeping records maintained ABC analysis - answerdivides inventory into three classes based on annual dollar volume, delivery problems, quality problems, high shortage or holding cost, anticipated engineering changes policies that focus on the few critical parts and not the many trivial ones Record accuracy with the periodic systems - answerregular checks of inventory record accuracy with the perpetual inventory - answertracks receipts and subtractions on a continuing basis Independent - answerdemand for item is free from outside control of the demand for any other item in inventory basic economic order quantity model production order quantity model quantity discount model Dependent - answerdemand for item is determined by a demand for some other item in the inventory Cycle counting advantages - answereliminates shutdowns and interruptions eliminates annual inventory adjustment trained personnel audit inventory accuracy allows causes of errors to be identified and corrected maintains accurate inventory records holding costs - answercosts of carrying inventory over time varies on business, location, and interest rates ordering cost - answerthe costs of placing an order and receiving goods setup cost - answercost to prepare a machine or process for manufacturing an order, may be highly correlated with time