Which of the following are basic systems for determining when to order INDEPEN

Which of the following are basic systems for determining when to order INDEPENDENT demand items? I. Order point system II. Periodic review system III. Material Requirements Planning a. I only b. II only c. I and II d. I and III e. II and III 2. Which of the following statements is (are) best? a. Order point = DDLT + SS b. Average inventory = Q ÷ 2 + SS c. Safety stock is always needed. d. Order point = DDLT + SS, and average inventory = Q ÷ 2 + SS e. Order point = DDLT + SS, average inventory = Q ÷ 2 + SS, and safety stock is always needed.   3. When using the order point system, which of the following is true? a. Order quantities are usually fixed. b. The order point depends on the demand during the lead time plus safety stock. c. Time intervals between orders are constant. d. Order quantities are usually fixed, and the order point depends on the demand during the lead time plus safety stock. e. The order point depends on the demand during the lead time plus safety stock, and time intervals between orders are constant. 4. Which of the following statements about safety stock is true? a. It must always be carried. b. It depends only on the amount of demand. c. It depends on the required service level. d. All of the above are true. e. None of the above is true.   5. Select the description that most closely fits the term ORDER POINT: a. the time it takes to replenish an item in inventory b. extra inventory of an item carried to protect against variations in demand during lead time c. a listing of components required to manufacture a product d. the time when an order should be placed e. none of the above 6. Select the description that most closely fits the term SAFETY STOCK: a. the time it takes to replenish an item in inventory b. extra inventory of an item carried to protect against variations in demand during lead time c. a listing of components required to manufacture a product d. the time when an order should be placed e. none of the above   7. Select the description that most closely fits the term LEAD TIME: a. the time it takes to replenish an item in inventory b. extra inventory of an item carried to protect against variations in demand during lead time c. a listing of components required to manufacture a product d. the time when an order should be placed e. none of the above 8. Among other things, the amount of safety stock carried will depend upon: a. the frequency of reorder b. the service level desired c. variability of demand during the lead time d. all of the above e. the frequency of reorder, and the service level desired   9. Which of the following statements is best? a. Safety stock depends on the service level desired. b. Safety stock depends on the length of the lead time. c. Safety stock depends on the variation of demand during the lead time. d. All of the above are correct. e. None of the above is correct. 10. If the standard deviation of demand is 100 units and the average demand is 1,000 units, then we can be 95% confident that actual sales will be 1,000 units plus or minus about: a. 100 units. b. 150 units. c. 200 units. d. 300 units. e. 400 units.   11. Which of the following statements is (are) best? a. Most demand patterns tend to be stable and predictable. b. The most common predictable pattern is called a normal distribution. c. The normal curve can be described by its average (mean) and the variation of actual demand about the average. d. All of the above are true. e. Most demand patterns tend to be stable and predictable, and the most common predictable pattern is called a normal distribution. 12. If the sum of the absolute deviations of demand was 500 for 10 periods, MAD would be: a. 5 b. 500 c. 50 d. 0.02 e. none of the above   13. Management states that they will tolerate one stockout every year for a specific item. If 10 orders are placed for the item each year, the service level desired is: a. 80% b. 85% c. 90% d. 95% e. none of the above 14. The average demand for an item is 1,000 per month. The mean absolute deviation of monthly demand is 300 units. The MAD for yearly sales will be approximately: a. 3,600 units. b. 12,000 units. c. 1,040 units. d. 3,464 units. e. none of the above   15. Given that the lead time is 1 week and the sigma is 100 units, if the lead time changes to 2 weeks, the sigma would change to about: a. 200 units. b. 180 units. c. 160 units. d. 140 units. e. 120 units. 16. Management is willing to tolerate one stockout every 2 years for a specific item. If 10 orders are placed for the item each year, the service level desired is: a. 80% b. 85% c. 90% d. 95% e. none of the above   17. Which of the following is the best statement? a. Stockouts do not cost money because customers are willing to wait. b. The cost of a stockout will vary depending on the market served, the customer, and the competition. c. Stockouts can occur at any time in the inventory cycle. d. Stockouts do not depend on the frequency of reorder. e. All of the above statements are true. 18. Which of the following systems are used to determine when the order point is reached? I. Two-bin system II. Perpetual inventory system III. Periodic inventory system IV. Safety stock system a. All are used to tell when the order point is reached. b. I and II are used. c. I, II, and III are used. d. I and III are used. e. II and III are used.   19. ____________ is an inventory record system that keeps a continuous account of transactions as they occur. a. Perpetual inventory system b. Periodic inventory system c. Two-bin system d. Safety stock system e. All of the above keep a continuous account. 20. The demand placed on a factory or a central warehouse by distribution centers is considered: a. dependent. b. independent. c. uniform. d. all of the above e. none of the above   21. An order system in which the order quantity is allowed to vary and the order cycle is fixed is called the: a. periodic review system. b. two-bin system. c. reorder point system. d. red-tag system. e. none of the above 22. If the lead time is 1 week, the review period is 4 weeks, the average demand is 100 units per week, and the safety stock is 50 units, the target level will be: a. 150 units. b. 200 units. c. 250 units. d. 300 units. e. 550 units.   23. Using the periodic review system, the target level is: a. forecast demand during lead time. b. forecast demand during the review period. c. the sum of forecast demand during lead time and forecast demand during the review period. d. the sum of forecast demand during lead time and forecast demand during the review period plus the safety stock e. none of the above 24. If the lead time is 1 week, the review period is 1 week, the average demand is 100 units per week, and the safety stock is 50 units, the target level will be: a. 150 units. b. 200 units. c. 250 units. d. 300 units. e. none of the above   25. Which of the following is correct? a. Order quantities are fixed in the periodic review system. b. The two-bin system is an example of the order point system. c. The safety stock does not depend on the frequency of reorder. d. All of the above are true. e. None of the above is true. 26. Which of the following statements is best? I. In a pull system, central supply determines what is needed by the distribution centers. II. In a push system, all decisions are made by the distribution centers. III. An advantage of a pull system is central coordination. a. Only I and II are true. b. Only II and III are true. c. Only I and III are true. d. All of the above are true. e. None of the above is true.   27. Which of the following are objectives of distribution inventory management? I. To provide the required level of customer service II. To minimize the costs of transportation and handling III. To always have enough of everything on hand so there are no stockouts IV. To be able to interact with the factory so as to minimize scheduling problems a. All of the above are objectives. b. I, II, and III c. I, II, and IV d. I, III, and IV e. II, III, and IV 28. The distribution inventory management system that forecasts when various demands will be made by the system on central supply is called: a. pull system. b. push system. c. distribution requirements planning. d. inventory replenishment. e. order point system.   29. If the on-hand inventory is 40 units, the safety stock is 20 units, and the target level is 120 units, then an order should be placed for: a. 100 units. b. 80 units. c. 60 units. d. 40 units. e. 20 units. 30. For a given item, the lead time is 1 week, the on-hand inventory is 50 units, demand is 20 units per week, safety stock is set at 3 weeks supply, and the item is ordered every 2 weeks. The order quantity should be: a. 70 units. b. 60 units. c. 50 units. d. 40 units. e. 120 units.   31. A company that keeps no safety stock can expect an average service level of a. 0% b. 15% c. 50% d. 85% e. Safety stock does not affect the service level. 32. A company that has regular replenishments of small-value items such as a grocery store would use the _____________ system. a. order point b. materials requirements planning c. push d. Kanban e. periodic review   33. Management has carefully measured the standard deviation of the demand for a product and plans to use this figure to calculate the level of safety stock. If they keep one standard deviation of safety stock, then the expected service level should be approximately: a. 15% b. 35% c. 85% d. 90% e. 100% 34. Lead time for a given item is 3 weeks, and sales have been recorded in 1-week intervals. If the standard deviation for the sales interval is 25, then the standard deviation for the lead time should be approximately: a. 25 b. 43 c. 75 d. 14 e. 8   35. For a given item controlled by a periodic review system, the target level is 100 units. If there are 40 units on the shelf and the lead time is 2 weeks, then the order quantity should be: a. 140 units. b. 120 units. c. 85 units. d. 60 units. e. 40 units. 36. A product has a standard deviation of demand of 15. The safety stock for a service level of 98% would be approximately: a. 15 b. 26 c. 31 d. 8 e. 14.7   37. Use the following information to answer the question. Distribution Center A Transit Time: 1 week Order Quantity: 200 units Current Inventory: 75 units Week 1 2 3 4 5 Gross Requirements 150 125 125 100 150 In Transit 200 Projected Available Planned Order Release There will be a planned order release(s) in weeks: a. 2 and 3 b. 1 and 2 c. 1 and 3 d. 1, 2, and 3 e. In-transit inventory will cover all the orders. 38. Use the following information to answer the question. Distribution Center A Transit Time: 1 week Order Quantity: 200 units Current Inventory: 75 units Week 1 2 3 4 5 Gross Requirements 150 125 125 100 150 In Transit 200 Projected Available Planned Order Release What will be the projected available for weeks 2, 3, and 4? a. 200, 75, 175 b. 125, 0, 100 c. 75, 175, 25 d. 0, 75, 175 e. 125, 0, 75   39. Demand on central supply tends to be: a. smoothed out with planned orders. b. continuous. c. monotonous. d. lower than the distribution centers. e. lumpy. 40. The gross requirements on central supply are: a. the sum of the planned order releases from the distribution centers. b. taken from the distribution centers and offset by the lead time. c. the sum of the gross requirements for the distribution centers. d. the sum of the gross requirements for the distribution center's offset by the lead time. e. the same as the in-transit inventory.