Sample Exam 2 (Fall 2014)

Instructions

(1) The exam is open book and open notes. You can bring any paper material (such as books, notes, practice tests, homework, and etc.) to the test. However, you can not use cell phones, tablets, or computers.

(2) In the real test, for the multiple choice questions, you may need to select the correct option from option A to N.

(3) Remember to bring the book “Goal” to the test since there will be three questions asking about the “Goal” (Chapter 16-24).

(4) Real Test information: Todd 116, November 6, Thursday, 7:00 pm-9:00 pm

(5) Please bring a Calculator!!

Section 1: Multiple Choices

_____1. About the “Deterministic Demand Inventory Theory”, which option of statements listed below is correct?

A. EOQ model assumes the demand period is short and the demand has seasonality.

B. POQ model is the EOQ model with backorders.

C. All-unit quantity discount can be adopted in POQ model.

D. Basic EOQ model assumes the purchasing lead time is about one week.

E. About ABC analysis, class B Items needs to be moderately controlled.

____ 2. For product M, a firm has an annual holding cost percentage of 20%, an ordering cost of $80 per order, and annual demand of 10,000 units. If they order less than 1,100 units at a time, the purchase price is $10.00. If they order 1,100 or more, then the purchase price for all units is $8.00. What are the possible optimal solutions?

A. {1, 894, 1000, 1100}

B. {1, 1000, 1100}

C. {1, 894, 1100}

D. {1, 894, 1000}

E. {894, 1000, 1100}

F. {1000, 1100}

G. {894, 1000}

H. {894, 1100}

I. {1000}

J. {1100}

K. {894}

L. {1}

____ 3. ABC analysis divides an organization’s on-hand inventory into three classes based on

A. Unit price.

B. The number of units on hand.

C. Annual dollar volume.

D. Annual demand.

____ 4. Which of the following does NOT belong to holding costs?

A. Pilferage, scrap, and obsolescence

B. Insurance on inventory.

C. Storage costs

D. Order processing

____ 5. What is