Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 12, Problem 4CQ
If the order quantity doubles but the flow rate remains constant, what happens to the average amount of time a unit spends in inventory?
- a. Decreases by more than 50 percent.
- b. Decreases by 50 percent.
- c. Remains unchanged.
- d. Increases by 50 percent.
- e. Increases by more than 50 percent.
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Students have asked these similar questions
. If the order quantity doubles, what happens to the frequency of orders (i.e., the numberof orders submitted per unit of time)?a. Decreases by more than 50 percent d. Increases by 100 percent or doublesb. Decreases by 50 percent e. Increases by more than 50 percentc. Remains unchanged
Which of the following statements is false?
a. Ordering in smaller lot sizes lead to lower inventory holding costs.
b. Seasonal inventory is stored to cater predictable surge in demand.
c. Cycle inventory is the average amount of inventory used to satisfy demand between replenishments.
d. Safety inventory is kept when the demand is less than supply.
The EOQ is optimal because it
a. minimizes the total inventory cost.
b. minimizes the ordering cost of inventory.
c. minimizes the holding cost of inventory.
d. maximizes the on-hand inventory.
e. does none of these.
Chapter 12 Solutions
Operations Management
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Most inventory models attempt to minimize a. The likelihood of stockout b. None of these c. The numbers of orders placed d. Total inventory-based cost e The number of items orderedarrow_forwardIn general, as the order size increases. Select one: O a. both ordering and carrying costs decrease. O b. ordering costs decrease and carrying costs increase. O c. ordering costs increase and carrying costs decrease. O d. both ordering and carrying costs increase.arrow_forwardThe extra inventory we keep just in case the replenishment is delayed is referred to as Group of answer choices a)customer service inventory b)unanticipated excess inventory c)safety stock d) unexplained inventoryarrow_forward
- It is costly to hold inventory, but inventory can also be useful in a process because:a. adding inventory to a process will shorten the average time a unit spends in a process.b. adding inventory to a process can help reduce situations in which sales are lost due touncertain demand.c. adding inventory to a process is likely to increase quality.d. adding inventory to a process will increase the profit margin of the item.arrow_forwardThe definition of work-in-process (WIP) inventory is: Select one: a. An end item ready to be sold, but still an asset on the company's books. b. Products or components that are no longer raw materials but have not yet become finished products. c. Materials for maintenance, repair and operation. d. Materials that are normally purchased but have not yet entered the manufacturing process. and. Additional stock to allow for uneven demand; a buffer.arrow_forwardWhich of the following are true as the order decoupling point moves toward the source? I. Inventory investment decreases. II. Customer lead time gets longer. III. Inventory investment increases. IV. Customer lead time is unchanged. Options I and II Options II and III Option III Option III and IV Option IVarrow_forward
- Ligo's batch of 1,000 boxes of canned sardines gets manufactured in the first week of the month, and another batch of 1,000 in the second week. The batch produced first gets delivered to the warehouse and must be sold first. Ligo uses this inventory method which follows the logic that to avoid obsolescence, they should sell the oldest inventory items first and maintain the newest items in inventory. A) First in, first out B) Last in, first out Just in timearrow_forwardWhich of the following is NOT an assumption of the EOQ model?a. It is possible to receive a purchase discount if the order quantity is sufficiently large.b. There is a fixed cost to submit each order that is independent of the amount ordered.c. Demand occurs at a constant rate per unit of time.d. There is a cost to hold each unit of inventory per unit of timearrow_forwardInventory order is placed when O a. Only when projected or actual stocks on hand is below zero O b. None of these O c. Only when projected or actual on hand stocks are higher than the safety stock. O d. Only when projected or actual on hand stocks value is positive.arrow_forward
- A business introduces e-purchasing and is able to process the same number of orders with lesser buyers. As a result of this: purchase quantity should be reduced inventory holding cost must be reduced O purchase lead time should be reduced inventory pooling must be initiatedarrow_forwardAssuming constant annual demand for an item, increasing its orderquantity: A. Increases the number of orders placed per year.B. Increases the total annual purchasing cost.C. Increases the total annual inventory carrying costs.D. Decreases the number of orders placed per yeararrow_forwardWhich of the following incoterms is widely used for sales of bulk commodities like grains and oil? a. DDP (Delivered Duty Paid) b. CIF (Cost Insurance and Freight) c. CFR (Cost and Freight) d. FOB (Free on Board)arrow_forward
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