Sample Test Questions For EOQ

Sample questions for EOQ
Use a Scantron Form No. 886-E to record your choice of the best answer to each of the
following questions. You have the full period to answer the questions.
The following questions are worth three (3) points each.
1. Inventory management is a key component of effective supply chain performance.
a) True
b) False
2. Manufacturing’s cost efficiency is not affected by inventory decisions.
a) True
b) False
3. When a company’s product is nontangible (a service), inventory is no longer a viable option.
a) True
b) False
4. MRP develops a time-phased schedule that shows future demand, supply and inventories by time
period.
a) True
b) False
5. Makespan has a link to customer due dates.

a) True
b) False
6. Precedence relationships structure the sequencing of activities.

a) True
b) False
7. Hand tools, lubricants, and cleaning supplies are usually examples of what?
a) WIP inventory
b) finished goods inventory
c) raw materials inventory
d) distribution inventory
e) MRO inventory
8. What costs are considered in the basic EOQ model?

a) annual ordering costs + annual holding costs
b) annual purchasing costs + annual holding costs
c) annual ordering costs + annual holding costs + annual shortage costs
d) annual purchasing costs + annual ordering costs + annual holding costs + annual shortage costs
e) ordering costs per order + annual holding costs
9. What costs are considered in the quantity discount model?

a) annual ordering costs + annual holding costs
b) annual purchasing costs + annual holding costs + annual ordering costs
c) annual ordering costs + annual holding costs + annual shortage costs
d. annual purchasing costs + annual ordering costs + annual holding costs + annual shortage costs
e. ordering costs per order + annual holding costs
10. Next level down in the planning process after development of the aggregate plan is ___________.
a) materials requirements plan
b) engineering plan
c) rough-cut capacity plan
1
d) master production schedule
e) purchasing plan
11. For the level aggregate plan, fluctuations in demand are absorbed by ______________________.
a) inventory and subcontracting
b) back orders and price changes
c) inventory and back orders
d) price changes and subcontracting
e) subcontracting and back orders
12. What type of aggregate plan sets labor and equipment capacity to satisfy demand each period?
a) uniform
b) level
c) chase
d) mixed
e) steady
13. Evaluating an aggregate plan in terms of number of back orders is using what perspective?
a) cost
b) customer service
c) quality
d) operations
e) human resources
14. What is an information system designed to integrate internal and external members of the supply
chain?
a) material requirements planning
b) master production schedule
c) capacity requirements planning
d) aggregate planning
e) enterprise resource planning
15. Companies use to check that enough work is scheduled for operations and that
the amount of work scheduled is feasible.
a) capacity management
b) closed-loop requirements planning
c) cut requirements planning
d) capacity resources planning
e) capacity requirements planning
16. CRP systems are used to check that the amount of work:
a) meets the MRP directive.
b) meets the ERP directive.
c) will make a profit.
d) is feasible.
e) meets OSHA requirements.
17. In MRP, the starting points for each part and material needed to accomplish the master production
schedule are the ________________________.
a) net requirements
b) gross requirements
c) planned releases
d) scheduled receipts
e) planned receipts
2
18. Which of the following techniques loads jobs without regard to the capacity available to do the
work?
a) finite loading
b) infinite loading
c) forward scheduling
d) backward scheduling
e) input/output control
19. Which of the following scheduling techniques determines the earliest possible completion time for
a job?
a) finite loading
b) infinite loading
c) forward scheduling
d) backward scheduling
e) input/output control
20. What does job flow time measure?

a) the time a job spends in the shop
b) due-date performance
c) the amount of time it takes to finish a batch of jobs
d) job tardiness
e) job lateness
21. What does average number of jobs in the system measure?

a) WIP inventory
b) due-date performance
c) makespan
d) job tardiness
e) job lateness
22. The critical path is the sequential path of interrelated activities which has the ________________.
a) most activities
b) longest time
c) most nodes
d) most events
e) most arrows
23. When we are unsure about the duration of project activities, we use time estimates.
a) variable
b) probabilistic
c) estimated
d) deterministic
e) cumulative
24. Shortening the total time for completing a project by incurring higher costs from shortening
activities is ___________________.
a) normal cost
b) backward pass
c) crashing
d) leveling
e) project control
The following problems are worth ten (10) points each.
1. Suppose that your company sells a product for which the annual demand is 10,000 units. Holding
costs are $1.00 per unit per year, and setup costs are $200 per order
(a) What is the economic order quantity for your product?
3
Q= = = = 2,000 units
(b) What is the total annual cost of ordering and holding?

TC = D/Q*S + Q/2*H = 10,000/2000*200 + 2000/2*1 = 1,000 + 1,000 = $2,000
2. Given the following data:
Usage per Lead Time Gross

Item Parent (weeks) Requirements
J - 3 10
K 3 2 30
L 1 1 10
M 2 2 20
N 4 3 120
O 2 2 60
P 1 1 60
Q 6 2 360
The end product J is made from components K, L, and M. K is made from N and O. O is made from P
and Q.
(a) What is the replenishment lead time for J, assuming there are no inventories?
JL=3+1=4 JM=3+2=5 JKN=3+2+3=8 JKOP=3+2+2+1=8 JKOQ=3+2+2+2=9
Replenishment time is 9 weeks
(b) Calculate the gross requirements for each of the components if the company plans to build 10 of
its J model. Assume that there are no beginning inventories.
JL=3+1=4 JM=3+2=5 JKN=3+2+3=8 JKOP=3+2+2+1=8 JKOQ=3+2+2+2=9
See above
3. Jackie is the owner and the manager of an auto repair company. In order to be fair to all the
customers, Jackie decides to use the FCFS priority rule in job sequencing. Currently, four cars need to
be repaired. Assume that the cars arrive in the order listed, that is, A first, then B, then C, then D. The
estimated labor times (in days) and promise dates are shown in the following table. Customers usually
do not pick up their cars early. Today is day 0.
Car Estimated Labor Time Promise Date
A 5 5
B 10 18
C 1 12
D 3 15
Based on the FCFS sequence, calculate the following performance measures: (a) makespan, (b)
average job flow time, (c) average number of jobs in the system, (d) average job tardiness.
Labor Flow Due

Jobs Time Time Date Tardiness
A 5 5 5 0
4
B 10 15 18 0
C 1 16 12 4
D 3 19 15 4
19 55 8
a. Makespan = 19 days
b. Avg. Job Flow Time = 55/4 = 13.75 days
c. Avg. Number of Jobs = 55/19 = 2.89 jobs
d. Avg. Job Tardiness = 8/4 = 2 days

Sample Test Questions For EOQ

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Sample Test Questions For EOQ

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What is the economic order quantity (EOQ) formula and what variables does it consider?

What is the replenishment lead time for item J based on the information provided?

Sample questions for EOQ

5. Makespan has a link to customer due dates.

6. Precedence relationships structure the sequencing of activities.

8. What costs are considered in the basic EOQ model?

9. What costs are considered in the quantity discount model?

20. What does job flow time measure?

21. What does average number of jobs in the system measure?

(b) What is the total annual cost of ordering and holding?

2. Given the following data:

Usage per Lead Time Gross

Labor Flow Due

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