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51 Cards in this Set

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Service parts sold to the repair shops are examples of ______ demand

independent

T/F: Dependent Demand must be forecasted based on market conditions.

False, Independent Demand CAN be forecasted based on market conditions

The four broad categories of inventory are:

raw materials, work-­in-­process, finished goods, and maintenance, repair and operating (MRO)

_____ shows how many times a firm turns over its inventory in anaccounting period.

Inventory turnover ratio

For Inventory turnover ratio, ____ is better because its faster

more

The term ______ is synonymous with physically counting inventory.

Cycle Counting

The ______ system categorizes inventory items into three groups, A, B,and C. A items are given highest priority, while C items have the lowest priority. Prioritization maybe based on annual dollar usage, shelf life, or sales volume.

ABC inventory control

_____ is an inventory model used to determine the optimal order size thatminimizes total annual inventory costs.

The EOQ (Economic Order Quantity) Model

The ABC inventory matrix shows an ABC inventory classification based on _____ on the vertical axis and an ABC inventory classification based on _____ on thehorizontal axis.

annual usage, physical inventory

_____ is considered an eventual replacement of barcode because of its ability to store huge amount of information to differentiate specific unit of good.

Radio Frequency Identification (RFID)

T/F: Electronic Product Code (EPC) is the only RFID standard adopted by the commercialsector and the U.S. Department of Defense.

False, EPC and ISO

An _________ does not require direct line of sight to read the information stored in an RFID tag

RFID reader

The _____, also known as the economic order quantity, is the optimal order size in termsof cost because it minimizes the annual total inventory cost.

EOQ

The ____ is the lot size where inventory holding costs equal annual ordering costs.

EOQ

The ______ is the sum of the annual purchase cost, the annualholding cost, and the annual ordering cost.

total annual inventory cost

Relaxing the _______ of the EOQ model results in theEconomic Manufacturing Quantity model.

instantaneous replenishment assumption

The optimal order quantity for the quantity discount model may exist at a ______ or on either one of the feasible ____.

price breakpoint; EOQs

In the Economic Manufacturing Quantity model, the annual consumption rate must be ________ with the annual production rate.

simultaneous

When demand and lead time are constant, _____ is the demand during lead time.

reorder point

The ______ system is more expensive to monitor compared to theperiodic review inventory system.

continuous review inventory

T/F: The (s, S) continuous review inventory system orders the same quantity Q whenphysical inventory reaches the reorder points.

False. They order different quantities and different times

The _____ system reviews physical inventory at specific points intime.

periodic

_____ describes the internal demand for parts based on the demand of the final product in which the parts are used. Subassemblies, components, and raw materials are examples of dependent demand items

Dependent Demand

The demand for final products and has a demand pattern affected by trends, seasonal patterns, and general market conditions

Independent Demand

The primary functions of inventory are to: _____ from uncertainty in the marketplace and ____ dependencies in the supply chain (e.g., safety stock)

buffer; decouple

Unprocessed purchase inputs

Raw Materials

Partially processed materials not yet ready for sales

WIP

Products ready for shipment

Finished Goods

Materials use in production (e.g., cleaners and brooms)

Maintenance, repair, and operating (MRO)

Direct costs, indirect costs, fixed costs, variable costs, order costs, setup costs, and holding or carrying costs are examples of ______

Inventory costs

Directly traceable to unit produced (e.g., labor)

Direct costs

Cannot be traced directly to the unit produced (e.g., overhead)

Indirect costs

Independent of the output quantity (e.g., buildings, equipment, and plant security)

Fixed costs

Vary with output level (e.g., materials)

Variable Costs

direct variable costs for making an order, in mfg _____ are related to machine setups

order costs, setup costs

Incurred for holding inventory in storage

holding or carrying costs

What are two inventor investments?

Absolute value of inventory and inventory turnover or ratio

_____ determines which inventories should be counted and managed more closely than others

ABC inventory Control system

_____ items are given highest priority with larger safety stocks. They account for approximately 20% of the total items, and are about 80% of the total inventory cost

A Items

_____ items account for the other 80% of total items and only 20% of the cost.

B and C

______ items require closer management since they are relatively more expensive per unity and require more effort to purchase or make and may be more prone to obsolencence. 40% of the items make up 15% of the annual dollar usage

B items

____ items have the lowest value and hence the lowest priority 40% of the items make up 5% of the annual dollar usage

C items

Under RFID ______, goods are automatically counted and logged as they enter the supply warehouse

materials management

Under RFID _____, assembly instructions are encoded on an RFID tag and provide information to computer controlled assembly devices

manufacturing

Under RFID ______, shipments leaving automatically update ERP to trigger a replenishment order and notify customer for delivery tracking

Distribution Center

Under RFID _______, there are no check out lines as scanners link RFID tagged goods in shopping cart with buyers credit card

Retail store

A quantitative decision model based on the trade-off between anual inventory holding costs and annual order costs

EOQ Model

Assumptions of the ______ model are:




Demand must be known and onstant


Delivery time is known and constant


Replenishment is instantaneous


Price is constant


Holding cost is known and constant


Ordering cost is known and constant


and Stock outs are not allowed

EOQ

____ considers the tradeoff between purchasing in large quantities to take advntage of the price discount nd issuing fewer orders, against holding higher inventory

Quantity Discount Model, or price-break model

in the ____ model, Inventory builds up gradually during the production period rather than at once as in the EOQ model

EMQ

The lowest inventory level at which a new order must be placed to avoid a stockout. Demand and delivery lead time are never certain and require safety stock

Statistical Reorder Point