Question 91. Daily usage is exactly 60 gallons per day. Lead time is norma

02 Jun Question 91. Daily usage is exactly 60 gallons per day. Lead time is norma

Question
91. Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a

standard deviation of 2 days. What is the standard deviation of demand during lead time?

A. 60 x 2

B. 60 times the square root of 2

C. 60 times the square root of 10

D. 60 x 10

E. none of the above

92. Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and

a standard deviation of 2 gallons. What is the standard deviation of demand during lead time?

A. 20 x 2

B. 20 x 10

C. 2 times the square root of 20

D. 2 times the square root of 10E. none of the above

93. All of the following are possible reasons for using the ?xed order interval model except:

A. Supplier policy encourages use.

B. Grouping orders can save in shipping costs.

C. The required safety stock is lower than with an EOQ/ROP model.

D. It is suited to periodic checks of inventory levels rather than continuous monitoring.

E. Continuous monitoring is not practical.

94. Which of these products would be most apt to involve the use of a single-period model?

A. gold coins

B. hammers

C. fresh ?sh

D. calculators

E. frozen corn

95. In a single-period model, if shortage and excess costs are equal, then the optimum service level is:

A. 0

B. .33

C. .50

D. .67

E. none of these

96. In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___

percent.

A. 100

B. 80

C. 60

D. 40

E. 20

97. In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an

optimum service level, is ___ percent.

A. 100

B. 67

C. 50

D. 33

E. 5

98. If, in a single-period inventory situation, the probabilities of demand being 1, 2, 3, or 4 units are .3, .3, .2, and .

2, respectively. If two units are stocked, what is the probability of selling both of them?

A. .5

B. .6

C. .7

D. .8E. none of these

99. The management of supply chain inventories focuses on:

A. internal inventories

B. external inventories

C. both internal and external inventories

D. safety stock elimination

E. optimizing reorder points

100. An operations strategy for inventory management should work towards:

A. increasing lot sizes

B. decreasing lot sizes

C. increasing safety stocks

D. decreasing service levels

E. increasing order quantities

101. Cycle stock inventory is intended to deal with ________.

A. excess costs

B. shortage costs

C. stockouts

D. expected demand

E. quantity discounts

102. An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:

A. unchanged order quantities

B. slightly decreased order quantities

C. greatly decreased order quantities

D. slightly increased order quantities

E. greatly increased order quantities

103. The need for safety stocks can be reduced by an operations strategy which:

A. increases lead time

B. increases lead time variability

C. increases lot sizes

D. decreases ordering costs

E. decreases lead time variability

104. If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the

ROP will be:

A. 20

B. 50

C. 70

D. 80