Question 1. Dependent demand items are part of a larger component or product, and use is derived from the production schedule for the larger component.

True

False

Question 2. A buffer inventory:

protects against uncertainties in supply and demand.

is accumulated for a well-defined future need.

is held in anticipation of future needs.

covers demand that is expected in the future.

is carried to soften the impact of a significant price increase.

Question 3. Most direct costs are:

variable costs.

overhead costs.

general and administrative costs.

semivariable costs.

fixed costs.

Question 4. When developing a negotiation strategy, the negotiator should assess the positions of strength of both (all) parties to:

decide if negotiation makes sense.

establish negotiation points.

avoid setting unrealistic expectations.

b and c.

a, b, and c.

Question 5. When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of:

a deterministic model.

a causal model.

a time series forecasting technique.

a qualitative forecasting technique.

a repetitive pattern modeling tool.

Question 6. A fair price: is based on market conditions, and cost structure has no bearing on the determination of a fair price.

is the lowest price that ensures a continuous supply of the proper quality where and when needed and at which the supplier makes a reasonable profit.

is based on the cost to produce an item or service without consideration for the supplier's profit margin.

is an amount arrived at through negotiations where the seller's price is a starting point..

is when all sellers of equal goods or services receive the same per unit price.

Question 7. In Kanban systems large raw material inventories are unnecessary.

True

False

Question 8. Stockout costs: are easy to assess in most organizations.

can vary depending on whether it is a seller's or a buyer's market.

are about equal to or less than the cost of carrying additional inventory.

do not include present and future lost contribution on lost sales and customer goodwill because these are difficult to quantify.

are higher when it is a seller's market.

Question 9. "A" items in ABC analysis are: reviewed infrequently.

particularly critical in financial terms.

normally carried in large quantities.

ordered infrequently.

commonly managed by carrying inventory.

Question 10. In portfolio analysis, the goal when purchasing strategic goods or services is to: assure quality at expected levels.

assure continuous supply at lowest cost of ownership.

minimize acquisition time and cost.

minimize acquisition time and cost and price per unit.

reduce or eliminate customization.