Distribution and Inventory Management Quiz

Customers use distribution KPIs to objectively assess the speed of service provided by the distribution operation.

• True

• False

The drawback of centralized inventory is the long distance to customers, which typically extends lead times and results in higher transportation costs.

• True

• False

KPIs cannot be used in connection with distribution center activities as they do not provide tangible, relevant data.

• True

• False

MRPII will not allow an organization to integrate financial planning with operations and logistics.

• True

• False

Ordering cost refers to the expense of placing an order for additional inventory and does not include the cost or expense of the product itself.

• True

• False

Capital cost is also called interest or opportunity cost.

• True

• False

In comparison with the basic EOQ approach, the fixed interval model does not require close surveillance of inventory levels.

• True

• False

A common productivity is measured as the ratio of real output to real input.

• True

• False

Asset utilization is very important in a 3PL warehouse.

• True

• False

Inventory plays a dual role in organizations. Inventory impacts the cost of goods sold as well as supporting the balance sheet, a new concept only recently receiving attention.

• True

• False