ABM84 Final Exam

An inventory management tool that classifies SKUs in an inventory according to their dollar or peso value expressed as annual dollar or peso usage

• Economic Order Quantity model

• ABC Analysis

• Reordering point

• Lead time demand

Which of the following does not belong to the group?

• Insurance

• Telephone Bill

• Stationeries and stamp

• Salary of purchasing staff

It is the order quantity that minimizes total holding and ordering costs for the year.

• EOQ

• ABC Analysis

• Joint Ordering

• None of the above

The following are assumptions that necessary when using EOQ except

• Annual demand can be estimated

• Demand was constant or nearly constant rate

• When order arrives, it arrives all at one time

• Amount of purchasing and carrying costs are assumed

The John Farm Equipment company estimates its carrying cost at 15% and its ordering cost at $9 per order. The estimated annual requirement is 48,000 units at a price of $4 per unit. What is the most economical no. of orders to be placed in a year?

• 35

• 40

• 45

• 50

The John Farm Equipment company estimates its carrying cost at 15% and its ordering cost at $9 per order. The estimated annual requirement is 48,000 units at a price of $4 per unit. What is the most economical no. of units to be ordered?

• 137

• 1066

• 1200

• 830

The John Farm Equipment company estimates its carrying cost at 15% and its ordering cost at $9 per order. The estimated annual requirement is 48,000 units at a price of $4 per unit. What is the optimal number of days supply to carry?

• 9

• 12

• 3

• 15

Ramon has been buying a given item in lots of 900 units, which is 3 months supply. The cost per unit is $12 and the ordering cost is $16. Carrying cost is 25% of average inventory. What is the annual demand in units?

• 900

• 1800

• 2700

• 3600

Ramon has been buying a given item in lots of 900 units, which is 3 months supply. The cost per unit is $12 and the ordering cost is $16. Carrying cost is 25% of average inventory. What is the annual demand in dollars?

• $10,800

• $43,200

• $14400

• $900

Ramon has been buying a given item in lots of 900 units, which is 3 months supply. The cost per unit is $12 and the ordering cost is $16. Carrying cost is 25% of average inventory. What is optimal number of orders per year?

• approximately 18 orders per year

• approximately 25 orders per year

• approximately 20 orders per year

• approximately 30 orders per year