POM: Final Exam: Multiple Choice

POM: Final Exam
MULTIPLE CHOICE
Assuming constant annual demand for an item, increasing its order quantity: *
1 point
Increases the number of orders placed per year.

Increases the total annual purchasing cost.
Increases the total annual inventory carrying costs.
Decreases the number of orders placed per year
In the fixed-time period model, the order quantity is determined for which: *
1 point
The total annual inventory cost is minimized.

The annual setup cost is equal to the annual holding cost.
The probability of stockout is minimized. Diko sure toh diko Makita
None of the above
Inventory carrying costs include the following EXCEPT: *

1 point
Transportation cost.
Obsolescence.
Cost of storage space.
Cost of money invested in inventory.
Inventory carrying costs differ from inventory holding costs when: *

1 point
The item is not moved from one place of the storage area to another.
The owner of the inventory does not own the warehouse.
The item is not perishable.
None of the above
Procurement costs do not include: *

1 point
Issuing purchase orders.

Setup costs.
Purchasing costs.
Receiving goods and placing them into inventory.
The basic EOQ model is based on all the following assumptions except: *
1 point
Annual demand is known and constant.

The item is always available when needed.
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Estimates of ordering and carrying costs are accurate.
Order is instantaneously received exactly when previous inventory has just been used up .
The “how much to order” decision always has an influence on the following
costs except: *
1 point
Annual purchasing costs.

Annual carrying costs.
Annual procurement costs. or my basis ka ditto?
Total annual inventory costs
The level of inventory at which a new order needs to be placed to replenish depleted
stock is called the: *
1 point
Service level.
Reorder point.
Minimum inventory level.
Safety stock.
To establish the reorder point in the EOQ model, we must know both: *
1 point
The annual demand and the number of orders placed per year.
The annual demand and the lead time.
The daily demand and the order quantity.
None of the above
In the basic EOQ model, the average inventory level is equal to one-half this value: *
1 point
Maximum inventory level.

Order quantity.
Reorder point
Both A and B.
PERT could be used to answer which of the following management questions? *

1 point
Can we delay a particular activity and still finish the project on time?
When are we scheduled to start a particular activity?
Which activities should be finished on time?
All of the above.
If an activity has a zero slack, it: *

1 point
Is on the critical path.

Must be a noncritical activity.
Can be completed in no time at all
Means the project is expected to be delayed.
The following descriptions are always true of the critical path in a project EXCEPT: *
1 point
Contains the critical activities

Is the longest path in a project
Has the most number of activities
Takes the longest time to be completed
The following statement about a noncritical activity is FALSE: *

1 point
Delaying it beyond its slack will cause the delay of the whole project.
It can be delayed.
Both A and B.
Neither A nor B.
Activities A, B, and C are started at Week 0 and are the immediate predecessors for
Activity J. If the earliest finish times for the three activities are Week 11, Week 15, and
Week 10, respectively, then the earliest start time for J will be *
1 point
Week 10
Week 11
Week 12
Week 15
Given a project with three paths and their corresponding path lengths: A-B-C: 25 days,
A-D-E: 15 days, and B-C-E: 20 days; which of the following statements is TRUE? *
1 point
Activity B has the most slack

The critical activities are A, B and C
The earliest project completion time is 15 days
The expected duration of the project is 60 days
If Activity C has an expected time estimate of 5 days, which of the following

statements is TRUE? *
1 point
Activity C should not be delayed

Activity C can be delayed for a maximum of 5 days
The activity time estimates for Activity C are: 2, 4, and 9 days
The activity time estimates for Activity C are: 1, 3, and 17 days
Which of the following questions regarding a project CANNOT be answered even if the
critical path of a project is known? *
1 point
How long can each of the activities be delayed without delaying the project?
When is the earliest project completion time?
Which activities should not be delayed?
None of the above
The basic difference between PERT and CPM *

1 point
No difference
How activity times are estimated
CPM can be used to monitor project costs, while PERT cannot
PERT can be used for large projects, while CPM is only suitable for simple projects
The activities in a project whose completion times need to be shortened in order to

finish the project ahead of schedule are the *
1 point
Critical activities
Noncritical activities
Activities with the most slack
Activities that require the least resources
Basic EOQ Model

Item X is a standard item stocked in a company’s inventory of spare parts. Each year, the firm uses about
2,000 units of Item X, which costs Php 1,000 per unit. Storage costs, which include insurance and cost of
capital, amount to 18 percent of item unit cost. Placing an order for more of Item X costs Php 400. The
company operates 360 days per year and Item X is received 9 days after placement of order.
How many units of Item X should be ordered each time? *

1 point
94 units
95 units
100 units
2,000 units
When should Item X be ordered? *

1 point
50 times a year
Every 50 days
Every 9 days
Whenever Item X’s inventory level drops to 50 units
How many times per year would Item X be ordered? *
1 point
21x
50x
40x
None of the above
What is Item X's average inventory level? *

1 point
40 units
48 units (47?)
223 units
None of the above
How much would be Item X's total annual purchasing cost? *

1 point
Php 8,485
Php 16,971
Php 2,000,000
None of the above
How much would be Item X's total annual procurement cost? *

1 point
Php 8,485
Php 16,971
Php 2,000,000
None of the above
How much would be Item X's total annual storage cost? *

1 point
Php 8,485
Php 16,971
Php 2,000,000
None of the above
How much would be Item X's total annual stockout cost? *

1 point
Zero
Php 8,485
Php 16,971
None of the above
Including its total annual purchasing cost, how much would be Item X's total annual
inventory cost? *
1 point
Php 2,008,485
Php 2,000,000
Php 2,016,971
None of the above
Fixed Time Period Model

A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a
check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls
have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls.
Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days.
How many rolls of gauze bandages should be ordered for this period? *
3 points
13 rolls
33 rolls
53 rolls
137 rolls
How many units would be the safety stock? *

2 points
13 rolls
33 rolls
53 rolls
137 rolls
What's the expected demand during the order interval and lead time? *
2 points
33 rolls
53 rolls
137 rolls
144 rolls
What would have been the desired service level if an order quantity of 142 rolls were
placed when the stock on hand is 30 rolls? (Assume: amount on order and backorder
is zero). *
4 points
95%
96%
97%
99%
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1 point
Php 2,008,485
Php 2,000,000
Php 2,016,971
None of the above
Fixed Time Period Model

A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a
check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls
have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls.
Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days.
How many rolls of gauze bandages should be ordered for this period? *
3 points
13 rolls
33 rolls
53 rolls
137 rolls
How many units would be the safety stock? *

2 points
13 rolls
33 rolls
53 rolls
137 rolls
What's the expected demand during the order interval and lead time? *
2 points
33 rolls
53 rolls
137 rolls
144 rolls
What would have been the desired service level if an order quantity of 142 rolls were
placed when the stock on hand is 30 rolls? (Assume: amount on order and backorder
is zero). *
4 points
95%
96%
97%
99%
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POM: Final Exam

Increases the number of orders placed per year.

The total annual inventory cost is minimized.

None of the above

Inventory carrying costs include the following EXCEPT: *

Inventory carrying costs differ from inventory holding costs when: *

Procurement costs do not include: *

Issuing purchase orders.

Annual demand is known and constant.

Annual purchasing costs.

Maximum inventory level.

PERT could be used to answer which of the following management questions? *

If an activity has a zero slack, it: *

Is on the critical path.

Contains the critical activities

The following statement about a noncritical activity is FALSE: *

Activity B has the most slack

If Activity C has an expected time estimate of 5 days, which of the following

Activity C should not be delayed

The basic difference between PERT and CPM *

The activities in a project whose completion times need to be shortened in order to

Basic EOQ Model

How many units of Item X should be ordered each time? *

When should Item X be ordered? *

How many times per year would Item X be ordered? *

What is Item X's average inventory level? *

How much would be Item X's total annual purchasing cost? *

How much would be Item X's total annual procurement cost? *

How much would be Item X's total annual storage cost? *

How much would be Item X's total annual stockout cost? *

Fixed Time Period Model

How many units would be the safety stock? *

Fixed Time Period Model

How many units would be the safety stock? *

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