Just-in-time JIT) inventory systems have been adopted by large manufacturers to minimize the carrying costs of inventories. Identify the primary vulnerability of JIT systems.
Answer(s): C
JIT minimizes inventory by relying on coordination with suppliers to provide deliveries when they are needed for production. Consequently, work stoppages are more likely due to stockouts, because the inventory buffer is reduced or eliminated.
A company manufactures banana hooks for retail sale. The bill of materials for this item and the parts inventory for each material required are as follows:
Answer(s): B
The company needs 1, 800 banana hooks 2, 000 -- 200) and therefore 1, 800 swag hooks 1 1, 800) and 3, 600 wood screws 2 1, 800). Given that 300 swag hooks and 400 wood screws are on hand, the company must obtain 1, 500 swag hooks 1, 800 -- 300) and 3, 200 wood screws 3, 600 400).
The purpose of the economic order quantity model is to:
The purpose of the EOQ model is to minimize the sum of inventory order costs setup) and holding carrying) costs. The EOQ equals the square root of: twice the annual demand multiplied by the variable cost per order, divided by the unit periodic holding cost.
Which of the follov5ring is used in determining the economic order quantity ECQ)?
The primary business application of differential calculus is to identify the maxima or minima of curvilinear functions. In business and economics, these are the points of revenue or profit maximization maxima) or cost minimization minima). The Eli results from differentiating the total cost with regard to order quantity.
The EOQ economic order quantity) model calculates the cost-minimizing quantity of a product to order, based an a constant annual demand, carrying costs per unit per annum, and cost per order. For example, the EOQ is approximately 447 units if the annual demand is 10, 000 units, carrying costs are US $1 per item per annum, and the cost of placing an order is US $10. What will the EOQ be if the demand falls to 5, 000 units per annum and the carrying and ordering costs remain at US $1 and US $10, respectively?
Answer(s): A
The ECQ formula is2ADX = ½K
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