11) How does information-gathering technology with barcoding increase the reliability and timeliness of inventory information?
12) What is the economic-order-quantity decision model?
13) When are the relevant ordering and carrying costs equal in EOQ models?
14) What do managers do when they are uncertain about demand, lead time, or the quantity that suppliers can provide?
15) How does a manager know to implement just-in-time purchasing?
16) Glasswall Company sells 300 windows per week. Purchase-order lead time is 2 weeks and the economic order quantity is 475 units. What is the reorder point?
A) 175 units
B) 475 units
C) 600 units
D) 775 units
E) 1,200 units
17) Mary's Bakery can predict with virtual certainty the demand for its products. Mary's sells 70 cupcakes per week. Purchase-order lead time is 4 weeks and the economic-order quantity is 95 cupcakes. What is the reorder point?
A) 280 cupcakes
B) 6,300 cupcakes
C) 165 cupcakes
D) 74 cupcakes
E) 95 cupcakes
18) Winter Resort Solutions sells ski and snowboard equipment. The company also manufactures snowboards. Winter Resort Solutions orders 6,000 snowboards a year, 115 per week, at $24.50 per board and it covers all shipping costs. The company earns 30% on its cash investments. The purchase-order lead time is 2.5 weeks. It sells 125 snowboards per week. The following data are available:
Relevant ordering costs per purchase order$21.25
Relevant insurance, materials handling, breakage,
and so on, per year$2.50
Compute the economic order quantity for Platinum Snow Company and the reorder point.
A) 22,615 snowboards; 502 snowboards
B) 161 snowboards; 313 snowboards
C) 205 snowboards; 112.5 snowboards
D) 42,000 snowboards; 450 snowboards
E) 520 snowboards; 112.5 snowboards
19) The following information applies to Pet Storehouse, which supplies dog houses to pet stores throughout the country. Pet Storehouse purchases the dog houses from a manufacturer which has a reputation for very high quality in its manufacturing operation.
Annual demand (weekly demand= 1/52 of annual demand)32,750 units
Orders per year30
Lead time in days20 days
Cost of placing an order$150
What is the reorder point?
A) 1,250.1 units
B) 1,420.6 units
C) 1,680.2 units
D) 1,698.4 units
E) 1,799.4 units
20) If Coffee Company has a safety stock of 400 units and the average daily demand is 30 units, how many days can be covered if the shipment from the supplier is delayed by 12 days?
A) 1,200 days
B) 15 days
C) 13.3 days
D) 21.5 days
E) 14 days