Darly Havidson is a small manufacturer of motorcycles

Darly Havidson is a small manufacturer of motorcycles

Subject: Business / Management
Question
Inventory Managment

Q1. Darly Havidson is a small manufacturer of motorcycles. Which of the following would not be inventory to this company?
a. Gaskets used in assembling its motors
b. Copy paper in the main office
c. The cost of advertising its product to consumers
d. Steel sheets waiting to be manufactured into motorcycles
Q2. Inventories
a. reduce the risk of not receiving supplier material
b. are generally costless for the producer
c. can never be reduced without reducing profits
d. all of the above
Q3. Which of the following is a cost of holding inventory?
a. Salary of the CEO
b. T.V. advertising costs
c. Breakage and spoilage
d. All of the above
Q4. Which inventory system provides the most up-to-date inventory counts?
a. Periodic
b. Perpetual
c. Peripatetic
d. Perennial
Q5. Which of the following costs is associated with inventory?
a. Holding costs
b. Ordering costs
c. Shortage costs
d. All of the above
Q6. Kendall Corp is a computer manufacturer with four items in its inventory. The cost of each item and its annual usage by Kendall are as shown Which items would you consider “A” items?
Item Cost per Item Annual Usage Annual Volume
A.Cables $60.00 10,000 $600,000
B.Hard Drives $50.00 5,000 $250,000
C.Labels $1.00 75,000 $75,000
D.Switches $1.50 5,000 $7,500

a. Cables
b. Hard drives
c. Labels
d. Switches
Q7. Which items would be classified as “C” Items for Kendall?
a. Cables
b. Hard drives
c. Labels
d. Switches
Q8. The process of ordering, using and receiving inventory is called the
a. Economic Order Quantity (EOQ)
b. Shipping Time
c. Gyrocycle
d. Inventory Cycle
Q9. Which of the following is not true about Just-in-Time Inventories…
a. They require close coordination between supplier and manufacturer
b. They require a computer
c. They have been adapted in manufacturing plants worldwide
d. They are never monitored by suppliers
Q10. A manufacturer uses 3,000 units of materials (Q) per year. They order the 1,000 units for delivery at the beginning of the year. The annual cost of holding a material is $10/unit (H). What is the annual inventory holding cost for Barnes Widget Manufacturers? (Reminder Annual Holding Costs = (Q/2)*H)
a. $30,000
b. $20,000
c. $15,000
d. $10,500
Q11. Gidget Manufacturing uses 10,000 units of inventory per year. Orders are placed in 2,000 unit increments. If each order costs $2,000 to place, what is the expected annual ordering cost for Gidget Manufacturing? (Reminder Annual Ordering Costs = (D/Q)*S)
a. $2,000
b. $5,000
c. $8,000
d. $10,000
Q12. A manufacturing company uses 20,000 units of inventory per year. They order inventory in 1,000 increments at a cost of $100 per order. They have also determined the cost to hold inventory is $30 per unit. What is the total inventory cost for Widgets and Gidgets? (Reminder Total Cost equation TC= (Q/2)*H + (D/Q)*S)
a. $4,000
b. $15,000
c. $17,000
d. $19,000
Q13. A hardware store has an inventory ordering cost of $500. If demand is 1,000 units and holding cost is $4 per unit, what is the optimal order size? (Reminder Optimal Order Size = Qo = (Square Root of (2DS/H))
a. 50 televisions per order
b. 100 televisions per order
c. 500 televisions per order
d. 1,000 televisions per order
Q14. Yarpo Supermarket uses 100 gallons of heating oil per day. The lead-time on a delivery is four days. For safety reasons, the company always wants to have a two-day supply of fuel oil on hand. What is the reorder point? (Reminder ROP = d * LT + S)
a. 60
b. 600
c. 6,000
d. 60,000
Q15. Smileys Candies sells 20 boxes of chocolate per day. The candy company delivers chocolate every Monday. Smileys calls its orders in on Friday. If Smileys always wants to keep 20 boxes as a safety stock, and it has 30 boxes on hand, how many boxes should it order? (Reminder Fixed Order Interval, Q = d * (OI) + d * (LT) + S a)
a. 300 boxes
b. 190 boxes
c. 140 boxes
d. 90 boxes