Operations Now Supply Chain Profitability And Performance 3rd Edition By Byron J.Finch -Test Bank

c11 Key

1. Decoupling with inventory can provide an increase in net sales that results from enhanced reliability and response time.
TRUE

Finch – Chapter 11 #1
Level: Medium

2. Ordering costs are generally viewed as being a function of the average value of inventory.
FALSE

Finch – Chapter 11 #2
Level: Medium

3. Continuous replenishment in retailing is analogous to just-in-time delivery in manufacturing.
TRUE

AACSB: Reflective Thinking
Finch – Chapter 11 #3
Level: Medium

4. In general, dependent demand inventories are inventories whose demand comes directly from the market (they are dependent on the market for demand)
FALSE

Finch – Chapter 11 #4
Level: Medium

5. Independent demand is, by definition, uncertain demand.
TRUE

Finch – Chapter 11 #5
Level: Medium

6. The EOQ approach to determining order quantity has been criticized for deflating order quantities.
FALSE

Finch – Chapter 11 #6
Level: Medium

7. Fixed quantity, variable interval inventory models are sometimes referred to as periodic review models.
FALSE

Finch – Chapter 11 #7
Level: Easy

8. In MRP, the gross requirement for the components comes directly from the planned order release from the level above.
TRUE

Finch – Chapter 11 #8
Level: Medium

9. In ABC classification, the relative importance of inventory items is generally linked to demand or dollar usage, but could also be linked to a particular customer, storage costs, etc.
TRUE

Finch – Chapter 11 #9
Level: Medium

10. Transportation cost is an example of:
A. Item cost
B. Ordering cost
C. Carrying cost
D. Stockout cost
E. Storage cost