Inventory Management Exam Preparation Guide
Course Introduction
Inventory Management explores the principles, strategies, and techniques involved in efficiently managing inventory within an organization. The course covers key topics such as inventory control methods, demand forecasting, economic order quantity (EOQ), safety stock calculation, just-in-time (JIT) systems, and inventory valuation. Students learn about the role of inventory in supply chains, the use of technology in inventory tracking, and how to balance inventory costs with service levels to optimize operations. Through case studies and practical exercises, students develop the skills necessary to analyze inventory problems and apply best practices to ensure effective resource utilization and customer satisfaction.
Recommended Textbook Operations and Supply Chain Management for the 21st Century 1st Edition by Ken Boyer
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14 Chapters
1048 Verified Questions
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Chapter 1: Operations and Supply Chain Strategy
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Sample Questions
Q1) Measuring productivity in service process is considerably more straightforward than measuring productivity in manufacturing.
A)True
B)False
Answer: False
Q2) A change in which of the following items is generally not considered in the transformation process?
A)A change in physical properties
B)A change in shape
C)A change in fixed dimensions
D)A change in surface finish
E)A change in materials
Answer: E
Q3) Provide a mission statement for a low-cost airline.
Answer: The answer will vary.The mission statement of Southwest Airlines is as follows: The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth,friendliness,individual pride,and Company Spirit.
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Chapter 2: Quality Management
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Sample Questions
Q1) As quality increases,both internal and external failure costs decrease,whereas assurance and prevention costs increase.
A)True
B)False
Answer: True
Q2) Robust quality principles are now routinely used in identifying the optimum design of product components for many complex industries.
A)True
B)False
Answer: True
Q3) Research over a long period has shown that it is more costly to continue serving existing customers than to increase market share.
A)True
B)False
Answer: False
Q4) Perception does not influence a customer's opinion of product quality.
A)True
B)False Answer: False
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Chapter 3: New Product Development
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Sample Questions
Q1) Being able to shop for products on the Internet or book a hotel room online is an example of
A)Radical innovation
B)Continuous innovation
C)Disruptive innovation
D)Mandatory innovation
E)Strategic innovation
Answer: A
Q2) Identify two high-clock-speed industries and two low-clock-speed industries.
Answer: High-clock speed: electronics,telecommunications (answers vary)Low-clock speed: chemical industry,agriculture industry (answers vary)
Q3) Customizing M&Ms with your own message is an example of what?
A)Experience marketing
B)Mass customization
C)Computer-aided design
D)Virtual reality
E)Rapid prototyping
Answer: B
Q4) Describe four individual modules that are used in the design of a computer.
Answer: Hard disk,DVD-ROM,microprocessor,display panels,mouse,keyboard,etc.
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Chapter 4: Process Design and Analysis
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Sample Questions
Q1) In a paced assembly process,if station A takes 2 minutes per unit,station B takes 1 minute per unit,and station C takes 3 minutes per unit,compute the utilization for each station and identify the bottleneck.
Q2) Flow between work centers can be illustrated using from-to charts.
A)True
B)False
Q3) Identify the five classifications of the product-process matrix.
Q4) A break-even analysis can help to determine how many stations to use in an assembly line.
A)True
B)False
Q5) A product layout generally has lower inventory levels than a process layout. A)True B)False
Q6) A bottleneck will determine the amount of output of a process. A)True B)False
Q7) Identify the four classifications of the service process matrix and provide an example of each.
Q8) Describe outsourcing and give two reasons why its use has increased.
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Chapter 5: Forecasting
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Sample Questions
Q1) If the forecast for the first quarter for next year is 1000 units,what is the seasonally adjusted demand if the first quarter seasonal index is 1.24?
Q2) What term describes demand that is characterized by regular repletion of increases or decreases in demand as measured in time periods of less than a year?
A)Seasonality
B)Exponential
C)Trend
D)Autocorrelation
E)Variance
Q3) Which of the following is not a measure of forecast error?
A)CFE
B)MSE
C)MAD
D)QFD
E)MAPE
Q4) Decomposition of data involves separating historical data into components.
A)True
B)False
Q5) Describe r,r<sup>2</sup>,and the standard error of the estimate.
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Chapter 6: Independent Demand Inventory
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Sample Questions
Q1) The total annual inventory cost will be minimized when the lot size equals what amount?
A)Demand
B)Holding cost
C)Economic order quantity
D)Ordering cost
E)Minimum batch cost
Q2) A product has demand of 40 units during the lead time (normally distributed),with a standard deviation of 10.What is the safety stock inventory if the organization wants to achieve a 90% cycle-service level?
Q3) Services need to inventory supplies that are necessary to keep the business running.
A)True
B)False
Q4) The amount of inventory carried and the amount of taxes assessed on the inventory are often positively correlated.
A)True
B)False
Q5) Describe a bin system.
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Chapter 7: Dependent Demand Inventory
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Sample Questions
Q1) An MRP system is static,that is,once a plan is created,it is seldom modified.
A)True
B)False
Q2) Which of the following items enhances the effectiveness of an MRP system?
A)Minimal size lots
B)A rapidly changing manufacturing environment
C)Accurate inventory records
D)Maximum lead times
E)Large safety stocks
Q3) An inventory transaction occurs when there is any change in the quantity of a specific part or material.
A)True
B)False
Q4) Determine the quantity of part D required to build each item X.
Q5) Give three reasons for carrying safety stock.
Q6) A bill of materials database is a basic output of an MRP system.
A)True
B)False
Q7) What are the key inputs to an MRP system?
Q8) Describe the differences in the evolution of MRP,MRP II,and ERP.
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Chapter 8: Project Management
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Sample Questions
Q1) Which of the following examples is not considered a project?
A)Building the great wall of China
B)Building the Panama Canal
C)Managing the 2008 Olympics
D)Producing 2009 Dodge Rams
E)Filming a made-for-TV movie
Q2) Determine the amount of slack in each activity.
Q3) In a PERT analysis,the "most likely time" is the minimum possible time required to complete an activity.
A)True
B)False
Q4) Being an expert in information integration,project scope,time management,quality management,human resources,communications,risk,and procurement are beneficial skills for what member of a project management team?
A)Project planner
B)Project sponsor
C)Project manager
D)Project accountant
E)Project auditor
Q5) List five PRIMARY characteristics of a project.
Page 10
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Chapter 9: Optimization and Simulation Modeling
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Sample Questions
Q1) One component of a linear programming problem assumes that all mathematical equations or inequalities are represented as straight lines.
A)True
B)False
Q2) If the maximization objective function is evaluated at three corner points of a graphically solved LP problem,and Point A yields a profit of $20,000,Point B yields a profit of $55,000,and point C yields a profit of $41,000,what point produces the optimum solution?
A)The origin
B)Point A
C)Point B
D)Point C
E)Cannot be determined
Q3) Draw the feasible region if at least 200 units of product A are required and at least 100 units of product B are required by a company.
Q4) Identify three disadvantages to building simulation models in spreadsheets.
Q5) Identify three applications (types of problems)of linear programming.
Q6) Briefly describe the graphical method of solving a linear programming problem.
Q7) Describe what a translator function does in a simulation.
Page 11
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Chapter 10: Capacity Planning
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Sample Questions
Q1) The campus bookstore averages 150 customers per day.The store is open for 12 hours per day,and each customer takes an average of 4 minutes to check out.How many checkout lanes should the bookstore have if the manager wants a 25% capacity cushion?
Q2) A difference between projected demand and current capacity is
A)Capacity cushion
B)Capacity gap
C)Capacity projection
D)Required capacity
E)Resources needed
Q3) Why is it often difficult to match capacity and demand?
A)Capacity is expensive
B)Determining capacity is difficult
C)Capacity increases often come in large increments
D)Forecasting capacity is difficult
E)It is easy to match capacity and demand
Q4) Sketch and briefly describe an experience curve.
Q5) Identify three factors that affect the estimation of capacity,and briefly describe each.
Q6) Identify five factors that affect the size of a capacity cushion.
Page 12
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Chapter 11: Quality Improvement Methods
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Sample Questions
Q1) Control limits are generally 3 standard deviations from the center line.
A)True
B)False
Q2) If a quality improvement plan is implemented and then periodically evaluated and it is discovered that the plan did not show improvement,what should be done?
A)Earlier assumptions need to be reevaluated
B)Standardize for the future
C)Celebrate
D)Recap and summarize what was learned
E)Identify the gaps between actual and preferred situations
Q3) The central limit theorem states that the shape of the distribution of averages for samples follows a Pareto distribution even if the original distribution was very different.
A)True
B)False
Q4) Provide three rules for identifying if a process is out of control,in addition to a single point being outside of the control limits.
Q5) Identify three sources of quality improvement ideas.
Q6) Briefly describe the central limit theorem.
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Chapter 12: Lean Enterprise
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Sample Questions
Q1) Lean production is based on a push system of process flow.
A)True
B)False
Q2) What are the five laws of the Lean Six Sigma approach?
Q3) A lean enterprise defines waste very narrowly.
A)True
B)False
Q4) Takt time is defined as the minimum cycle time allowed for producing a product in order to meet demand.
A)True
B)False
Q5) Identify five wastes commonly found in a production system.
Q6) In an assembly line following a lean philosophy,what would a worker do who found a quality problem?
A)Report the problem at the end of the shift
B)Report who made the mistake
C)Stop the line and fix the problem
D)Fix the problem personally at the end of the shift
E)Let the inspector fix the problem
Q7) What is the objective of quality at the source?
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Chapter 13: Technology and Integrated Supply Management
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Sample Questions
Q1) Select the example of self-sourcing technology below.
A)Table service at a restaurant
B)Home mail delivery
C)Ordering tickets to a show in person
D)Grocery checkout with a cashier
E)Paying bills online
Q2) What term describes the combination of several individual pieces of equipment that allows materials to be automatically loaded,unloaded,and shaped at machining centers equipped with CNC machine tools?
A)An automated guided vehicle
B)A flexible manufacturing system
C)Automated storage and retrieval systems
D)Computer-aided manufacturing
E)Industrial robots
Q3) Technology is not advanced sufficiently to make industrial robots practical.
A)True
B)False
Q4) Identify five examples of processing technologies.
Page 15
Q5) What can be done to minimize the bullwhip effect?
Q6) What are the benefits of introducing new technologies?
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Page 16
Chapter 14: Global Supply Chain and Service Integration
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Sample Questions
Q1) Which of the following is not a typical function that can easily be globalized?
A)Manufacturing
B)Procurement
C)Maintenance and monitoring of equipment
D)Customer support
E)Inspections
Q2) Identify three goals of outsourcing a particular product or service.
Q3) Which of the following statements is not supported by Thomas Friedman's triple convergence concept?
A)The proposed "flatteners" converged around the year 2000.
B)The "flatteners" required firms to collaborate horizontally.
C)The Soviet economic plan was rejected.
D)The fall of the Berlin Wall added brainpower to the global playing field.
E)The "flatteners" operate independently from one another.
Q4) Current employees should not be involved or told about efforts to outsource.
A)True
B)False
Q5) Outsourcing is the same as offshoring.
A)True
B)False
Page 17
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