MA - Ch-5

Which of the following functions are fulfilled by a goods received note (GRN)?

(i) Provides information to update the inventory records on receipt of goods

(ii) Provides information to check the quantity on the supplier's invoice

(iii) Provides information to check the price on the supplier's invoice

• (i) and (ii) only

• (i) and (iii) only

• (ii) and (iii) only

• (i) only

There are 27,500 units of Part Number X35 on order with the suppliers and 16,250 units outstanding on existing customers' orders.

If the free inventory is 13,000 units, what is the physical inventory?

A domestic appliance retailer with multiple outlets sells a popular toaster known as the Autocrisp 2000, for which the following information is available:

Average sales 75 per day

Maximum sales 95 per day

Minimum sales 50 per day

Lead time 12-18 days

Reorder quantity 1,750

Based on the data above, at what level of inventory would a replenishment order be issued?

A domestic appliance retailer with multiple outlets sells a popular toaster known as the Autocrisp 2000, for which the following information is available:

Average sales 75 per day

Maximum sales 95 per day

Minimum sales 50 per day

Lead time 12-18 days

Reorder quantity 1,750

Based on the data above, what is the maximum inventory level?

• 1,750 units

• 2,275 units

• 2,860 units

• 2,900 units

The annual demand for an item of inventory is 2,500 units. The cost of placing an order is $80 and the cost of holding an item in stock for one year is $15. What is the economic order quantity, to the nearest unit?

Which of the following is correct with regard to inventories?

(i) Stock-outs arise when too little inventory is held.

(ii) Safety inventories are the level of units maintained in case there is unexpected demand.

(iii) A re-order level can be established by looking at the maximum usage and the maximum leadtime.

• (i) and (ii) only

• (i) and (iii) only

• (ii) and (iii) only

• (i), (ii) and (iii)

What is the economic batch quantity used to establish?

Optimal

• reorder quantity

• recorder leve

• order quantity

• inventory level for production

The demand for a product is 12,500 units for a three month period. Each unit of product has a purchase price of $15 and ordering costs are $20 per order placed. The annual holding cost of one unit of product is 10% of its purchase price.

What is the Economic Order Quantity (to the nearest unit)?

• 577

• 816

• 866

• 1,155

A company determines its order quantity for a raw material by using the Economic Order Quantity (EOQ) model.

What would be the effects on the EOQ and the total annual holding cost of a decrease in the cost of ordering a batch of raw material?

EOQ & Total annual holding cost

• Higher - Lower

• Higher - Higher

• Lower - Higher

• Lower - Lower

Data relating to a particular stores item are as follows:

Average daily usage 400 units

Maximum daily usage 520 units

Minimum daily usage 180 units

Lead time for replenishment of inventory 10 to 15 days

Reorder quantity 8,000 units

What is the reorder level (in units) which avoids stockouts (running out of inventory)?

• 5,000

• 6,000

• 7,800

• 8,000