1. Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?
A) 12.50
B) 10.00
C) 42.00
D) 4.16
E) 20.00
2. A shipment of parts valued at $75,000 needs to be shipped from Tampa, FL, to Chicago, IL. They could be shipped by rail, taking 15 days at a cost of $1,575, or by truck, taking 4 days at a cost of $2,640. The annual holding cost rate for this type of item has been estimated at 22%. What option is more economical? Answer: Send the shipment by rail.
A) True
B) False
3. A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing
A) Postponement
B) Cross-docking
C) Channel assembly
D) Drop shipping
E) Float reduction
4. A fried chicken fast-food chain that acquired feed mills and poultry farms has performed
A) Horizontal integration
B) Forward integration
C) Backward integration
D) Current transformation
E) Job expansion
5. Which of the following is an opportunity for effective management in the supply chain?
A) Random "pull" data
B) Multistage control of replenishment
C) The bullwhip effect
D) Customer managed inventory
E) Channel assembly
6. In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and all defective items are replaced. When using this technique the AOQ
A) Worsens (AOQ becomes a larger fraction)
B) Improves (AOQ becomes a smaller fraction)
C) Is not affected, but the AQL is improved
D) Is not affected
E) Falls to zero