QUESTION: 17

Which of the following situations is an example of postponement?

Shipments are broken down into small groups for reshipment.
Shipments are consolidated immediately for reshipment.
Production begins after a customer order is received.
Partially assembled goods are assembled at a later stage.

Answer(s): D

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QUESTION: 18

Which of the following situations is an example of inventory being held as a way to balance supply and demand?

A manufacturer holds inventory of key components to maintain a level production schedule.
A manufacturer of seasonal products builds finished-goods inventory before the peak selling period.
A distributor maintains safety stock of slow-moving items at a central distribution center.
A retailer stocks a variety of sizes and colors of a fast-selling item to avoid losing sales.

Answer(s): B

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A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%. The company averages four inventory turns. The cost savings resulting from increasing inventory turns from four to six would be:

$29,000,000.
$15,750,000.
$10,500,000.
$ 5,250,000.

Answer(s): D

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QUESTION: 20

Continuous improvement is best described as:

a never-ending effort to expose and eliminate root causes of problems.
a never-ending effort by the management team to reduce cycle time.
identifying and implementing big-step improvements within a process.
a process in which a supplier commits to replenishing inventory based on demand without receiving replenishment orders.

Answer(s): A

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QUESTION: 20

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