Question 1

Which of the following is not a factor in the EOQ inventory model?

Accepted Answer

The EOQ model considers the annual demand for inventory, cost to place an order, and cost to carry inventory. Therefore, all of the given factors are considered in the EOQ model.

Question 2

Which of the following is not withheld from the employee's check?

Accepted Answer

Federal Unemployment Tax (FUTA) is paid by employers and is not withheld from an employee's wages. The other options, Federal Income Tax, Social Security, and Union dues, are typically withheld from an employee's paycheck.

Question 3

A compensation method whereby employees are paid according to the amount they sell in a given time-period is known as:

Accepted Answer

This type of compensation is based on the amount of sales made by the employee, so the more they sell, the more they earn. It provides motivation for employees to increase their productivity and is commonly used in sales positions.

Question 4

Which of the following is not a key feature of a JIT inventory system?

Accepted Answer

Adequate safety stock is not a key feature of a JIT inventory system since it aims to minimize inventory and only produce or acquire items when they are needed, as determined by customer demand. Safety stock involves holding additional inventory as a buffer against unexpected demand or supply chain disruptions, which goes against the principles of JIT.

Question 5

Which of the following is not withheld from the employee's check?

Accepted Answer

All of the listed options are typically withheld from an employee's paycheck.

Question 6

A compensation method under which a company pays employees according to the number of items they produce during a given time-period is known as:

Accepted Answer

Piece-rate pay is a compensation method under which employees are paid based on the number of items they produce during a given period. This method is commonly used in manufacturing and production environments, where the quantity of output is easily measurable. It incentivizes employees to work more efficiently and increase productivity, as their pay is directly tied to their output.

Question 7

Which of the following is a feature of a JIT inventory system?

Accepted Answer

A JIT (Just-in-Time) inventory system follows the principle of producing and delivering products only when they are needed, based on consumer demand. Therefore, the amount of production is based on the pull of consumer demand, which is the feature of a JIT inventory system. The other choices, such as having sufficient inventory, selling slightly defective products, or keeping the assembly line moving at all costs, are not necessarily features of a JIT system.

Question 8

Which of the following statements is false?

Accepted Answer

JIT is not a short-run model but rather a long-term philosophy that focuses on constantly improving efficiency and quality while reducing waste over time.

Question 9

How are defective products identified in a JIT inventory system?

Accepted Answer

In a JIT system, it is important to identify defects immediately to prevent the production of more defective products. Therefore, the production line is stopped as soon as a defect is identified and only restarted once the source of the problem causing the defect has been identified and eliminated. This ensures that only high-quality products are produced and delivered to consumers. The other options (A, B, and C) do not address the root cause of the defects and can potentially result in defective products being shipped to customers.

Question 10

Which of the following companies would not be a good candidate for a JIT system?

Accepted Answer

The answer of Which of the following companies would not...

Question 11

Which of the following is withheld from an employee's pay and also paid by the employer?

Accepted Answer

Social Security taxes are withheld from an employee's pay, but the employer also pays a portion of these taxes on behalf of the employee.

Question 12

Which of the following statements is false?

Accepted Answer

All of the statements are true. JIT is a pull system in which production occurs only when there is demand. The JIT philosophy is based on continuous improvement through the elimination of waste and the pursuit of efficiency. JIT requires close relationships with suppliers in order to ensure timely delivery of materials and reduce inventory costs.

Question 13

Which of the following is not a factor in the EOQ inventory model?

Accepted Answer

The EOQ (Economic Order Quantity) model focuses on finding the most cost-effective quantity to order that minimizes total inventory costs, which include ordering costs (cost to place one additional order) and carrying costs (cost to carry one additional unit in inventory), as well as the annual demand for the inventory in units. The cost of the inventory item itself is not a direct factor in calculating EOQ; rather, EOQ is concerned with the costs associated with ordering and holding inventory.

Question 14

West Coast Creamery's economic order quantity is 300 units.Demand for the year is 41,975 units.There are seven days between the time an order is placed and the day it is received.West Coast operates 365 days per year.The reorder point is:

Accepted Answer

The reorder point is calculated as the daily demand multiplied by the lead time. Daily demand is 41,975 units/year divided by 365 days/year = 115 units/day. The lead time is 7 days. Therefore, the reorder point is 115 units/day * 7 days = 805 units.

Question 15

Which of the following describes the practice of setting the price of a product at less than cost to take over a market and then to raise the price?

Accepted Answer

The answer of Which of the following describes the practice...

Question 16

Capital Industries' president receives a bonus equal to 6% of net income.This bonus is included in the determination of net income.If the company's income before bonus was $3,800,000,the amount of the bonus is:

Accepted Answer

The answer of Capital Industries' president receives a bonus equal...

Question 17

Lockwood International's president receives a bonus equal to 7% of net income.This bonus is included in the determination of net income.If the company's income before the bonus was $4,500,000,the amount of the bonus is:

Accepted Answer

The answer of Lockwood International's president receives a bonus equal...

Question 18

A reorder point in a Kanban system is identified by a:

Accepted Answer

The answer of A reorder point in a Kanban system...

Question 19

Safety stock is kept in order to:

Accepted Answer

The answer of Safety stock is kept in order to:
...

Question 20

Lead time in an inventory system is:

Accepted Answer

The answer of Lead time in an inventory system is:
...

Quiz 5: Strategic Planning Regarding Operating Processes

Which of the following is not a factor in the EOQ inventory model?

Which of the following is not withheld from the employee's check?

A compensation method whereby employees are paid according to the amount they sell in a given time-period is known as:

Which of the following is not a key feature of a JIT inventory system?

Which of the following is not withheld from the employee's check?

A compensation method under which a company pays employees according to the number of items they produce during a given time-period is known as:

Which of the following is a feature of a JIT inventory system?

Which of the following statements is false?

How are defective products identified in a JIT inventory system?

Which of the following companies would not be a good candidate for a JIT system?

Which of the following is withheld from an employee's pay and also paid by the employer?

Which of the following statements is false?

Which of the following is not a factor in the EOQ inventory model?

West Coast Creamery's economic order quantity is 300 units.Demand for the year is 41,975 units.There are seven days between the time an order is placed and the day it is received.West Coast operates 365 days per year.The reorder point is:

Which of the following describes the practice of setting the price of a product at less than cost to take over a market and then to raise the price?

Capital Industries' president receives a bonus equal to 6% of net income.This bonus is included in the determination of net income.If the company's income before bonus was $3,800,000,the amount of the bonus is:

Lockwood International's president receives a bonus equal to 7% of net income.This bonus is included in the determination of net income.If the company's income before the bonus was $4,500,000,the amount of the bonus is:

A reorder point in a Kanban system is identified by a:

Safety stock is kept in order to:

Lead time in an inventory system is: