Hi: Please help with a few OM questions. A million thanks. Document Preview: l. The introduction of quantity discounts will cause the optimal order quantity to be: A) smaller B) unchanged C) greater...

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l. The introduction of quantity discounts will cause the optimal order quantity to be: A) smaller B) unchanged C) greater D) smaller or unchanged E) unchanged or greater2. Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time? A) 40 B) 200 C) 2 times the square root of 20 D) 2 times the square root of 10 E) none of the above 3. Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods? A) economic order quantity B) economic production quantity C) single period D) quantity discount E) reorder point 4. If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the ROP will be: A) 20 B) 50 C) 70 D) 80 E) 1305. With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as: A) A B) B C) C D) none of these The materials manager for a billiard ball maker must periodically place orders for resin, one of the materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs \$.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are \$100 per order, and that the lead time for delivery is four (4) days. 6. At what point should resin be reordered? A) 0 kilograms remaining B) 50 kilograms remaining C) 200 kilograms remaining D) 400 kilograms remaining B) 500 kilograms remaining 7. If order size were 1,000 kilograms of resin, what would be the length of an order cycle? A) 0.05 days B) 4 days C) 16 days D) 20 days E) 50 days 8. If the order size were 1,000 kilograms of resin, what would be the average inventory level? A) 50 kilograms B) 200 kilograms C) 500 kilograms D) 800 kilograms E) 1,000 kilograms 9. If the order size were 1,000 kilograms of...

Solution

Robert answered on Dec 20 2021
(Multiple Choice Questions 5 points each

l. The introduction of quantity discounts will cause the optimal order quantity to be:
A) smaller B) unchanged C) greater D) smaller or unchanged E) unchanged or greate
Whenever quantity discounts are offered then the buyer is encouraged to buy
more in terms of quantity so that discount can be availed. At that point he
calculated the EOQ at discount rate and normal rate, the EOQ which provides the
least total cost is selected which in most of the cases is higher than original EOQ.
2. Lead time is exactly 20 days long. Daily demand is normally distributed with a mean
of 10 gallons per day and a standard deviation of 2 gallons. What is the standard
deviation of demand during lead time?
A) 40 B) 200 C) 2 times the square root of 20 D) 2 times the square root of 10 E) none of
the above
Standard deviation of demand during lead time = Standard deviation of demand * √LT
= 2 * 20 = 40
3. Which inventory model is most appropriate if unused or unsold items cannot be ca
ied
over to subsequent periods?
A) economic order quantity B) economic production quantity C) single period D)
quantity discount E) reorder point
Single period model is used mainly in case of perishables or products which have
limited life, thus unused and unsold items are not ca
ies over to subsequent
periods.
4. If average demand for an item is 20 units per day, safety stock is 50 units, and lead
time is four days, the ROP will be:
A) 20 B) 50 C) 70 D) 80 E) 130
Reorder level = Average demand * Lead Time + Safety Stock = 20*4 + 50 = 130
5. With an A-B-C system, an item that had a high demand but a low annual dollar volume
would probably be classified...
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