Inventory Management Question Bank
Chapter 12
Inventory Management Multiple Choice Questions
60. Which of the following is not one of the assumptions of the basic EOQ model? A. Annual demand requirements are known and constant. B. Lead time does not vary. C. Each order is received in a single delivery. D. Quantity discounts are available. E. All of the above are necessary assumptions. Difficulty: Medium TLO: 6 Taxonomy: Knowledge
61. Which is an application for RFID tags? A. Monitoring the temperature of fruit during shipment B. Measuring the urine output of hospital patients C. Adjusting medications for diabetics D. Assessing audience response to a new movie E. Estimating the results of a political election AACSB: IT Difficulty: Hard TLO: 1 Taxonomy: Knowledge
62. A non-linear cost related to order size is the cost of: A. interest B. insurance C. taxes D. receiving E. space Difficulty: Hard TLO: 6 Taxonomy: Knowledge
63. In a two-bin inventory system, the amount contained in the second bin is equal to the: A. ROP B. EOQ C. amount in the first bin D. optimum stocking level E. safety stock Difficulty: Medium TLO: 9 Taxonomy: Knowledge
64. When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves: A. Line up B. Equal zero C. Do not line up D. Cannot be calculated E. Depend on the percentage assigned Difficulty: Hard TLO: 8 Taxonomy: Knowledge
65. Dairy items, fresh fruit and newspapers are items that: A. do not require safety stocks B. cannot be ordered in large quantities C. are subject to deterioration and spoilage D. require that prices be lowered every two days E. have minimal holding costs Difficulty: Medium TLO: 6 Taxonomy: Knowledge
66. Which is not included in order costs? A. processing vendor invoices for payment B. moving delivered goods to temporary storage C. inspecting incoming goods for quantity D. taking an inventory to determine how much is needed E. temporary storage of
Inventory Management Multiple Choice Questions
60. Which of the following is not one of the assumptions of the basic EOQ model? A. Annual demand requirements are known and constant. B. Lead time does not vary. C. Each order is received in a single delivery. D. Quantity discounts are available. E. All of the above are necessary assumptions. Difficulty: Medium TLO: 6 Taxonomy: Knowledge
61. Which is an application for RFID tags? A. Monitoring the temperature of fruit during shipment B. Measuring the urine output of hospital patients C. Adjusting medications for diabetics D. Assessing audience response to a new movie E. Estimating the results of a political election AACSB: IT Difficulty: Hard TLO: 1 Taxonomy: Knowledge
62. A non-linear cost related to order size is the cost of: A. interest B. insurance C. taxes D. receiving E. space Difficulty: Hard TLO: 6 Taxonomy: Knowledge
63. In a two-bin inventory system, the amount contained in the second bin is equal to the: A. ROP B. EOQ C. amount in the first bin D. optimum stocking level E. safety stock Difficulty: Medium TLO: 9 Taxonomy: Knowledge
64. When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves: A. Line up B. Equal zero C. Do not line up D. Cannot be calculated E. Depend on the percentage assigned Difficulty: Hard TLO: 8 Taxonomy: Knowledge
65. Dairy items, fresh fruit and newspapers are items that: A. do not require safety stocks B. cannot be ordered in large quantities C. are subject to deterioration and spoilage D. require that prices be lowered every two days E. have minimal holding costs Difficulty: Medium TLO: 6 Taxonomy: Knowledge
66. Which is not included in order costs? A. processing vendor invoices for payment B. moving delivered goods to temporary storage C. inspecting incoming goods for quantity D. taking an inventory to determine how much is needed E. temporary storage of