Question

Q1. Darly Havidson is a small manufacturer of motorcycles. Which of the following would not be inventory to this company?
a. Gaskets used in assembling its motors
b. Copy paper in the main office
c. The cost of advertising its product to consumers
d. Steel sheets waiting to be manufactured into motorcycles

Q2. Inventories
a. reduce the risk of not receiving supplier material
b. are generally costless for the producer
c. can never be reduced without reducing profits
d. all of the above

Q3. Which of the following is a cost of holding inventory?
a. Salary of the CEO
b. T.V. advertising costs
c. Breakage and spoilage
d. All of the above

Q4. Which inventory system provides the most up-to-date inventory counts?
a. Periodic
b. Perpetual
c. Peripatetic
d. Perennial

Q5. Which of the following costs is associated with inventory?
a. Holding costs
b. Ordering costs
c. Shortage costs
d. All of the above

Q6. Kendall Corp is a computer manufacturer with four items in its inventory. The cost of each item and its annual usage by Kendall are as shown Which items would you consider "A"items?
Item Cost per Item Annual Usage Annual Volume
A.Cables $60.00 10,000 $600,000
B.Hard Drives $50.00 5,000 $250,000
C.Labels $1.00 75,000 $75,000
D.Switches $1.50 5,000 $7,500

a. Cables
b. Hard drives
c. Labels
d. Switches

Q7. Which items would be classified as "C"Items for Kendall?
a. Cables
b. Hard drives
c. Labels
d. Switches

Q8. The process of ordering, using and receiving inventory is called the
a. Economic Order Quantity (EOQ)
b. Shipping Time
c. Gyrocycle
d. Inventory Cycle


Q9. Which of the following is not true about Just-in-Time Inventories...
a. They require close coordination between supplier and manufacturer
b. They require a computer
c. They have been adapted in manufacturing plants worldwide
d. They are never monitored by suppliers


Q10. A manufacturer uses 3,000 units of materials (Q) per year. They order the 1,000 units for delivery at the beginning of the year. The annual cost of holding a material is $10/unit (H). What is the annual inventory holding cost for Barnes Widget Manufacturers? (Reminder Annual Holding Costs = (Q/2)*H)
a. $30,000
b. $20,000
c. $15,000
d. $10,500


Q11. Gidget Manufacturing uses 10,000 units of inventory per year. Orders are placed in 2,000 unit increments. If each order costs $2,000 to place, what is the expected annual ordering cost for Gidget Manufacturing? (Reminder Annual Ordering Costs = (D/Q)*S)
a. $2,000
b. $5,000
c. $8,000
d. $10,000

Q12. A manufacturing company uses 20,000 units of inventory per year. They order inventory in 1,000 increments at a cost of $100 per order. They have also determined the cost to hold inventory is $30 per unit. What is the total inventory cost for Widgets and Gidgets? (Reminder Total Cost equation TC= (Q/2)*H + (D/Q)*S)
a. $4,000
b. $15,000
c. $17,000
d. $19,000


Q1. Which of the following NOT "environmental"?
a. Management
b. Economy
c. Government
d. All of the above are environmental

Q2. Mindy Pharmaceuticals has signed an industry petition to the Food and Drug Administration (FDA), asking them to expedite approval of certain drugs. Which environmental element is the company trying to influence?
a. The macro-economy
b. The industry
c. Technology
d. The political/legal system

Q3. The watch industry was 300 years old when quartz technology was adopted. The first to bring the technology to the consumer market was Texas Instruments (TI), a semiconductor manufacturer that had never before been in the watch business. Other semiconductor firms quickly followed. By the end of 1976, one year after TI first brought its low cost quartz watch to the market, almost 100 semiconductor firms were active in the watch industry. This illustrates:
a. The threat of substitute products
b. Degree of rivalry among established companies
c. The bargaining power of buyers/suppliers
d. Threat of entry by potential competitors


Q4. GE Locomotive purchasing department called Alexis Steel, its major steel supplier, and requested a 10% price cut on all the steel Alexis sold the locomotive manufacturer. Alexis officials werent sure whether or not they could afford to say no to GE. An internal review was started to determine how much of their business GE. If GE was a big customer, they would accept the request for a discount. If GE was instead a small customer, they would say no to GE's request. This is an example of:
a. Threat of entry by potential competitors
b. Degree of rivalry among established companies
c. The bargaining power of buyers/suppliers
d. The threat of substitute products

Q5. Much of Wal-Mart's success is based upon its operating efficiencies. A process called "cross-docking" is an important part of the Wal-Mart system. When a vendor ships items to Wal-Mart, the items don't go to the retailer's inventory but instead "cross the shipping dock" to Wal-Marts waiting trucks. These trucks go either directly to the individual stores or they go to distribution centers where, within 48 hours, they are sent out to stores. Which part of the value chain does this system illustrate?
a. In-bound logistics
b. Operations
c. Sales and marketing
d. Human resources management

Q6. Wal-Mart is considered the low-cost competitor in the discount retail segment. The last rival to try to beat them on price, K-Mart, when bankrupt in 2002. Nobody has challenged Wal-Mart since then. Framed in SOC/WTP terms:
a. Wal-Mart has the highest WTP
b. Wal-Mart has the lowest SOC
c. Wal-Mart has the lowest WTP
d. Wal-Mart has the highest SOC

Q7. Samsung is the most efficient semiconductor manufacturer in the world. Samsung is also able to charge a premium price, due to the outstanding quality of its products. In SOC/WTP terms, Samsung has:
a. High SOC
b. Low WTP
c. A dual competitive advantage
d. A small SOC/WTP gap

Q8. Sweater manufacturer "True North" sells a product line that rivals have not been able to copy. The company uses unusual equipment, and buys a very particular type of yarn, to create a product that commands a premium price. The company president explains: It took me 30 years to learn how to do these things. Even if my rivals know what I do and how I do things, it will take them that long to catch me.This illustrates:
a. Competitive Advantage
b. Business-level strategy
c. Corporate-level strategy
d. An industry environment

Q9. McIlhenny, the company that produces Tabasco Sauce, grows the peppers it uses to produce its hot sauce. This illustrates
a. Forward integration
b. Backward integration
c. Horizontal integration
d. Related diversification

Q10. In 2009, Comcast (a cable television company) announced its intention of buying television network NBC from General Electric. In corporate-level strategy terms, this was a case of:
a. Forward integration
b. Backward integration
c. Horizontal integration
d. Related diversification

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Q1. Darly Havidson is a small manufacturer of motorcycles. Which of the following would not be inventory to this company?
a. Gaskets used in assembling its motors
b. Copy paper in the main office
(c.) The cost of advertising its product to consumers (This is a cost, not inventory)
d. Steel sheets waiting to be manufactured into motorcycles

Q2. Inventories
(a.) reduce the risk of not receiving supplier material
b. are generally costless for the producer
c. can never be reduced without reducing profits
d. all of the above...

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