1、Supplement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall555SupplementD Special Inventory ModelsTRUE/FALSE1. The economic production lot size represents the maximum quantity of on-hand inventory for a manufacturer.Answer: FalseReference: Noninstantaneous
2、 ReplenishmentDifficulty: ModerateKeywords: ELS, economic production lot size, inventory2. For analysis using the economic production lot size (ELS) model to be useful, the producer must be able to produce the item faster than it is consumed.Answer: TrueReference: Noninstantaneous ReplenishmentDiffi
3、culty: ModerateKeywords: ELS, economic production lot size3. When facing quantity discounts, the EOQ found with the lowest price level is always the lowest total cost plan.Answer: FalseReference: Quantity DiscountsDifficulty: ModerateKeywords: EOQ, quantity discount4. The one-period inventory model
4、is commonly known as the newsboy problem.Answer: TrueReference: One-Period DecisionsDifficulty: ModerateKeywords: newsboy, one-period periodMULTIPLE CHOICE5. Consider a noninstantaneous replenishment situation in which the production rate is 100 units per day, the demand rate is four units per day,
5、and the economic production lot size is 500 units. Which of the following statements is true? a. The average cycle inventory is fewer than 225 units. b. The average cycle inventory is greater than 300 units. c. The rate of buildup in cycle inventory during the production cycle is fewer than 100 unit
6、s per day. d. The rate of buildup in cycle inventory during the production cycle is greater than or equal to 400 units per day. Answer: cReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: noninstantaneous replenishment, buildupSupplement D Special Inventory ModelsCopyright 2010 P
7、earson Education, Inc. Publishing as Prentice Hall556Scenario D.1Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (an
8、d sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year.6. Use the information in Scenario D.1. What is the economic production lot size (ELS)?a. Fewer than or equal to 400 units b. Greater than 400 units but fewer
9、 than or equal to 480 units c. Greater than 480 units but fewer than or equal to 500 units d. Greater than 500 units Answer: dReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production lot size7. Use the information in Scenario D.1
10、. How many production runs per year are needed if Jerry chooses to produce at his economic production lot size (ELS)?a. Fewer than or equal to 10 runsb. Greater than 10 runs but fewer than or equal to 20 runsc. Greater than 20 runs but fewer than or equal to 30 runsd. Greater than 30 runsAnswer: cRe
11、ference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production, run8. Use the information in Scenario D.1. If Jerry chooses to produce batches dictated by the economic production lot size (ELS) model, how many days elapse between the sta
12、rt of consecutive production runs (what is the time between runs or TBO)?a. Fewer than or equal to 8 daysb. Greater than 8 days but fewer than or equal to 10 daysc. Greater than 10 days but fewer than or equal to 12 daysd. Greater than 12 daysAnswer: dReference: Noninstantaneous ReplenishmentDifficu
13、lty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production, TBO9. Use the information in Scenario D.1. What is the maximum inventory if Jerry chooses to produce at the economic production lot size (ELS)?a. Fewer than or equal to 300 unitsb. Greater than 300 units but fewer than
14、or equal to 320 unitsc. Greater than 320 units but fewer than or equal to 340 unitsd. Greater than 340 unitsAnswer: bReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production, maximum inventorySupplement D Special Inventory Models
15、Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall55710. Use the information in Scenario D.1. If Jerry chooses to produce the batch size suggested by the economic production lot size (ELS) model, what is the annual cost?a. Less than or equal to $900b. Greater than $900 but less than
16、or equal to $950c. Greater than $950 but less than or equal to $1000d. Greater than $1000 Answer: bReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production, total cost11. Warrens Ice Cream makes 4 different flavors of ice cream u
17、sing their secret process and top secret recipes. Each of their flavors is equally popular and experiences a demand of 5,000 gallons/year. Warrens process is capable of producing 100 gallons/day once they incur the $25 setup cost. The ice cream holding cost is 10% of the $5 per gallon price. Warrens
18、 plant runs 250 days a year and stays busy doing so but management feels they can add another flavor to their product line and increase their revenue. Which of the following statements is appropriate for this scenario?a. Warrens can comfortably add a fifth flavor without increasing the number of day
19、s they operate.b. Warrens cannot add the fifth flavor because the holding cost would increase.c. Warrens can add the fifth flavor only if there is zero setup time between flavors.d. Warrens cannot add the fifth flavor because demand would exceed capacity.Answer: cReference: Noninstantaneous Replenis
20、hmentDifficulty: DifficultKeywords: ELS, noninstantaneous replenishment, economic production, total cost12. In a noninstantaneous replenishment model, as the daily demand approaches the daily production rate:a. the number of production runs per year decreases.b. the length in days of a production ru
21、n increases.c. the economic lot size increases.d. the time between production runs decreases.Answer: dReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: ELS, noninstantaneous replenishment, economic production, total costSupplement D Special Inventory ModelsCopyright 2010 Pearson
22、 Education, Inc. Publishing as Prentice Hall55813. A pencil supplier just introduced quantity discounts. The price schedule follows.Order Quantity Price per Unit000199 $4.00200399 $3.00400 and more $2.00XYZ stores annual demand remains at 500 units and ordering cost at $10 per order. If annual holdi
23、ng cost is 10 percent of the pencils per-unit price, what order quantity should XYZ select to minimize all costs? a. Fewer than or equal to 150 units b. Greater than 150 units but fewer than or equal to 199 units c. Greater than 199 units but fewer than or equal to 399 units d. Greater than 399 unit
24、s Answer: dReference: Quantity DiscountsDifficulty: ModerateKeywords: quantity discount, order size14. Which one of the following statements about quantity discounts is best? a. The minimum cost point on each price curve is always feasible. b. A price break is the maximum quantity needed to get a di
25、scount. c. If the EOQ for the lowest price is feasible, this is the best lot size. d. Either price or quantity is sufficient for the search for the best lot size. Answer: c Reference: Quantity DiscountsDifficulty: ModerateKeywords: quantity discount, feasible15. As an inventory manager, you must dec
26、ide on the order quantity for an item. Its annual demand is 300 units. Ordering cost is $20 each time an order is placed, and the holding cost is 30 percent of the per-unit price. Your supplier provided the following price schedule. Price per Unit Order Quantity$6.00 000149$5.00 150199$4.00 200 and
27、moreWhat ordering-quantity policy do you recommend? a. Fewer than or equal to 50 units b. Greater than 50 units but fewer than or equal to 149 c. Greater than 149 units but fewer than or equal to 199 units d. More than 199 units Answer: dReference: Quantity DiscountDifficulty: ModerateKeywords: quan
28、tity discount, orderSupplement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall55916. Use the information in Scenario D.2. What is the payoff with an order quantity (Q) of 40 units if the demand (D) is 30 units? a. Less than or equal to $2,000 b. Greater t
29、han $2,000 but less than or equal to $4,000 c. Greater than $4,000 but less than or equal to $6,000 d. Greater than $6,000 Answer: cReference: One-Period DecisionsDifficulty: ModerateKeywords: one-period order, quantity, payoff17. Use the information in Scenario D.2. What is the best order quantity?
30、 a. Fewer than or equal to 20 units b. Greater than 20 units but fewer than or equal to 40 units c. Greater than 40 units but fewer than or equal to 50 units d. Greater than 50 units Answer: bReference: One-Period DecisionsDifficulty: ModerateKeywords: one-period order, quantityScenario D.2Kyle stor
31、e sells K2 skis. The store makes a $200 profit per unit sold during the ski season, but it will take a $50 loss per unit if sold after the season is over. The following discrete probability distribution has been estimated for the seasons demand.Demand (D) Demand Probability10 0.120 0.330 0.340 0.250
32、 0.1Supplement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall56018. Use the information in Scenario D.3. What is the payoff when 40 units are ordered but a demand of 50 materializes? a. $150b. $300c. $450d. $600 Answer: dReference: One-Period DecisionsDi
33、fficulty: ModerateKeywords: one-period, payoff quantity19. Use the information in Scenario D.3. What is the payoff when 40 units are ordered but a demand of 30 materializes? a. $0b. $100c. $350d. $450 Answer: cReference: One-Period DecisionsDifficulty: ModerateKeywords: one-period, payoff quantity20
34、. Use the information in Scenario D.3. What is the order quantity with the highest expected payoff? a. 20 unitsb. 30 unitsc. 40 unitsd. 50 unitsAnswer: bReference: One-Period DecisionsDifficulty: ModerateKeywords: one-period, order quantity, payoffScenario D.3Consider an item with the following disc
35、rete demand distribution for a one-period inventory decision.Demand (D) Demand Probability10 0.1520 0.2030 0.3040 0.2050 0.15This item experiences a seasonal demand pattern. A profit of $15 per unit is made if the item is sold in season, but a loss of $10 per unit is incurred if sold after the seaso
36、n is over. Supplement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall56121. A world traveler prepares to leave the comforts of home for a back to nature visit to Gilligans Island, where all transactions are conducted in coconuts and the banking system is
37、completely undeveloped. The traveler can buy cocoanuts for $2 each before the journey. If he fails to bring enough cocoanuts with him and runs out, he must get some cocoanuts flown in at a cost of $5 each. If he finishes his vacation and has leftover cocoanuts he can cash them in when he returns hom
38、e, but will receive only $1.50 per cocoanut. What is his loss per unit if he overstocks on cocoanuts prior to leaving home?a. $0.50b. $1c. $3.50d. $4.50Answer: aReference: One-Period DecisionsDifficulty: EasyKeywords: one-period, order quantity, payoff22. Which of these statements about the one-peri
39、od model is best?a. Purchasing a quantity with the highest expected payoff will result in a positive payoff regardless of the actual demand during the period.b. The loss per unit cannot exceed the profit per unit.c. If demand exceeds the purchased quantity then the actual payoff exceeds the expected
40、 payoff for that quantity.d. The expected payoff for a purchase quantity is always less than the actual payoff for that quantity.Answer: cReference: One-Period DecisionsDifficulty: EasyKeywords: one-period, order quantity, payoffFILL IN THE BLANK23. The _ is the optimal lot size in situations in whi
41、ch replenishment is not instantaneous.Answer: economic production lot size, ELSReference: Noninstantaneous ReplenishmentDifficulty: ModerateKeywords: economic lot size, ELS, noninstantaneous replenishment24. A manufacturer produces aluminum cans internally rather than purchasing them and uses the ec
42、onomic production lot size equation to govern this process. The length of time that the aluminum can batch runs is _ and the time between the start of one batch of cans to the next is _.Answer: ELS/p, ELS/dReference: Noninstantaneous ReplenishmentDifficulty: HardKeywords: economic, lot, size, ELSSup
43、plement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall56225. A(n) _ is the minimum quantity needed to receive a discount.Answer: price breakReference: Quantity DiscountsDifficulty: ModerateKeywords: price break, discount quantity26. The need for one-time
44、 inventory decisions also can arise in manufacturing plants when _ items are made to a single order and _ are high.Answer: customized, scrap quantitiesReference: One-Period DecisionsDifficulty: HardKeywords: one-period, newsboy, scrap, specialSHORT ANSWERS27. Briefly explain why the economic product
45、ion lot size (ELS) is actually larger than the EOQ when there are noninstantaneous replenishments. Answer: The cycle inventory is less than Q/2, which reduces the annual holding cost of ordering Q units. Thus a larger order quantity is justified.Reference: Noninstantaneous ReplenishmentDifficulty: M
46、oderateKeywords: ELS, noninstantaneous replenishment28. Why are there discontinuities (areas where the curve jumps up or down and is not smooth) in the total cost curve in the quantity discount model?Answer: The total cost curve has breaks due to the price breaks. Reading the total cost curve from l
47、eft to right, when purchase quantities reach a price break, an increase in one unit will trigger a per-unit decrease in price for all units in the order, which accounts for the reduction in total cost. Reference: Quantity DiscountsDifficulty: ModerateKeywords: quantity discount, total cost29. When d
48、o one-period decisions on inventory arise in practice?Answer: The one-period inventory models are appropriate when retailers handle seasonal goods that must be sold at a reduced price after the selling season. For manufacturing situations, it can arise when customized products are made and scrap rat
49、es are high.Reference: One-Period DecisionsDifficulty: ModerateKeywords: one-period, newsboySupplement D Special Inventory ModelsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall563PROBLEMS30. A production manager is making a decision on batch size for a product with an annual demand of 25,000 units per year. The setup cost for each batch is $45 and once the setup is complete, the product may be produced at the rate of 650 units per day. There is a holding cost of $2 per
