Sample Questions
 

 

1. Which of the following is a function of inventory?

A. To decouple or separate parts of the production process    
B. To provide a stock of goods that will provide a selection for customers
C. To take advantage of quantity discounts
D. All of the above are functions of inventory

2. Which of the following would not generally be a motive for a firm to hold inventories?

A. To decouple or separate parts of the production process
B. To provide a stock of goods that will provide a selection for customers
C. To take advantage of quantity discounts
D. To minimize holding costs

3. What is cycle counting?

A. Is a process by which inventory records are verified once a year
B. Provides a measure of inventory accuracy
C. Provides a measure of inventory turnover
D. Assumes that all inventory records must be verified with the same frequency

4. What are the two most basic inventory questions answered by the typical inventory model are?

A. Timing and cost of orders    
B. Quantity and cost of orders
C. Timing and quantity of orders
D. Order quantity and service level

5. What does inventory models attempt to minimize?

A. The likelihood of a stock out    
B. The number of items ordered
C. Total inventory based costs
D. The number of orders placed

Answers:      1 (D), 2 (D), 3 (B), 4 (C), 5 (C)

 

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