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BSOP-330 Week 4 Quiz

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1. Question : (TCO 12) Which of the following statements regarding Amazon.com is false?

Student Answer: The company was opened by Jeff Bezos in 1995.

The company was founded as, and still is, a virtual retailer with no inventory.
The company is now a world-class leader in warehouse management and automation.
The company uses both United Parcel Service and the U.S. Postal Service as shippers.
Amazon obtains its competitive advantage through inventory management.
Instructor Explanation: Chapter 12

Points Received: 4 of 4
Comments:

2. Question : (TCO 12) Which of the following is a function of inventory?

Student Answer: to decouple or separate parts of the production process

to decouple the firm from fluctuations in demand and provide a stock of goods that will provide a selection for customers
to take advantage of quantity discounts

to hedge against inflation

All of the above are functions of inventory.

Instructor Explanation: Chapter 12

Points Received: 4 of 4
Comments:

3. Question : (TCO 6) Which of the following statements regarding the production order quantity model is true?

Student Answer: It applies only to items produced in the firm’s own production departments.
It relaxes the assumption that all the order quantity is received at one time.
It relaxes the assumption that the demand rate is constant.

It minimizes the total production costs.

It minimizes inventory.

Instructor Explanation: Other inventory models assumed that all of the inventory on order would be received all at once. This is not the case in most production environments. Most of the time inventory is received daily, weekly. The production order quantity model relaxes this assumption that all of the inventory is received all at once. Reference Heizer 10th edition pages 481-482.

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4. Question : (TCO 6) The purpose of safety stock is to

Student Answer: replace failed units with good ones.

eliminate the possibility of a stockout.

eliminate the likelihood of a stockout due to erroneous inventory tally.
control the likelihood of a stockout due to the variability of demand during lead time.
protect the firm from a sudden decrease in demand.

Instructor Explanation: Chapter 12

Comments:

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