What is another name for inventory?

1.   ?    Shares
2.   ?    Stock
3.   ?    Purchases
4.   ?    Sales

Which of the following is not a cost incurred by keeping inventory?

1.   ?    Ordering costs
2.   ?    Holding costs
3.   ?    Shortage costs
4.   ?    Operating costs

Which of the following is not an assumption implicit in the basic EOQ model?

1.   ?    Stock is ordered before stock levels reach zero
2.   ?    Stock levels are gradually depleted at a constant rate
3.   ?    Stock is ordered in a fixed-size batch
4.   ?    Stock ordered arrives instantaneously

If demand for stock occurs at a constant rate of D per unit time, ordering costs are K per order and the cost of holding a unit of stock for a unit of time is h, what is the economic order quantity?

1.   ?    (2KD/h)²
2.   ?    √(KD/2h)
3.   ?    √(2KD/h)
4.   ?    √(h/2KD)

A company sells 1000 items of a product per week at a constant rate. It costs £5 to place an order and it costs £1 per item per week to store the product. How many items should be ordered in a batch?

1.   ?    100
2.   ?    200
3.   ?    150
4.   ?    50

What is meant by lead time?

1.   ?    The time from the arrival of stock until stock levels reach zero
2.   ?    The time from stock levels reaching zero to arrival of new stock
3.   ?    The time between ordering stock and its arrival
4.   ?    The time between the arrival of stock and placing the next order

A company sells 1000 items of a product per week at a constant rate. It costs £5 to place an order and it costs £1 per item per week to store the product. When stock is not available customers are willing to wait but this costs the company 50p per item per week. What is the optimal order quantity?

1.   ?    100
2.   ?    173
3.   ?    58
4.   ?    141

For the example in question 7 what is the maximum shortage?

1.   ?    58
2.   ?    173
3.   ?    100
4.   ?    115

Which of the following statements is not true?

1.   ?    The variability coefficient is used to assess whether the assumption of constant demand is reasonable
2.   ?    The variability coefficient is calculated by dividing the sample variance of recent demand figures by the sample mean of these figures squared
3.   ?    The assumption of constant demand is deemed appropriate when the variability coefficient > 0.25
4.   ?    The assumption of constant demand is deemed appropriate when the variability coefficient < 0.25

The following are weekly demands for a product: 998, 1005, 1032, 995, and 1008. Is the variability coefficient approximately

1.   ?    0.2
2.   ?    0.02
3.   ?    0.002
4.   ?    0.0002