1. Ordering cost only consists of the shipping cost from supplier to customer.

True or False

2. Ordering cost is which type of cost?

Multiple Choice

Fixed

Variable

Overhead

3.

Which of the following would be considered part of Ordering Cost? (choose all that apply)

Check All That Apply

Minimum shipping chargeMinimum shipping charge

Postage to mail the order to a supplier (who still lives in the early 20th century)Postage to mail the order to a supplier (who still lives in the early 20th century)

Renting a truck to haul the order (and only this order, no other business is used for this truck’s one time rental)Renting a truck to haul the order (and only this order, no other business is used for this truck’s one time rental)

Cost of the office building housing your employees.

4.

Safety stock is inventory held to guard against uncertainty

True or False

5.

Which two things drive the need for safety stock? (choose two)?

Check All That Apply

Demand variabilityDemand variability

Warehouse spaceWarehouse space

DelaysDelays

Manufacturing speedManufacturing speed

Customer choice

6.

The “right” amount of safety stock is often a function of Service Level. Service Level is:

Multiple Choice

The probability of making the right product

The probability of delay

The probability of meeting demand during a delay

The probability of delay causing more demand

7.

The standard deviation of demand during lead time is the same whether or not lead time is variable.

True or False

8.

Finding average demand during lead time involves doing which of the following?

Multiple Choice

Squaring average demand per day and summing

Summing the square root of average demand per day and summing

Summing the daily average demand per day

Integrating average daily demand from zero to four

9.

Since standard deviations don’t sum, we have to sum which thing instead?

Multiple Choice

Average

Median

Kurtosis

Variance

10.

When lead time and demand are both variable, the formula we use consists of which two parts? (select two)

Check All That Apply

Demand variabilityDemand variability

Lead time variabilityLead time variability

Order period variabilityOrder period variability

Accounting irregularities

11.

The P-system of inventory submits inventory orders at random times.

True or False

12.

What is another name for the “P-system” of inventory?

Multiple Choice

Partial Request Inventory Order System

Poorly Routed Inventory Ordering System

Particularly Responsive Complicated Ordering System

Periodic Review Inventory System

13.

What are the two main challenges of the P-system? (select two)

Check All That Apply

Unhappy customersUnhappy customers

Length of review periodLength of review period

Figuring out when to orderFiguring out when to order

ComputersComputers

Amount of inventory to have

14.

What is the great benefit of the P-system?

Multiple Choice

A name that is easy to remember

Customer satisfaction is guaranteed

Simplicity in managing the system

Complicated mathematical requirements

15.

An offered discount makes no change to determining optimal order quantity.

True or False

16.

Which of the following statements is true when comparing the total cost curve for a product without discounting and the total cost curve with discounting?

Multiple Choice

The discounted curve is always below the undiscounted curve

The undiscounted curve is always below the discounted curve

The discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount.

The undiscounted curve is always below the discounted curve but does not really exist for values less than the minimum order amount to receive the discount.

17.

If I calculate the EOQ with the new, discounted material cost and the resulting quantity is enough to get the discount, what should I do?

Multiple Choice

Order the discounted EOQ amount

Order the regular EOQ amount

Average the discounted and undiscounted EOQ amounts and order that

Compare total costs of the two EOQ amounts

18.

In the end, the point of using the EOQ formula is to:

Multiple Choice

Properly enter the values we have calculated

Identify the number that is best under any condition

Point us toward the possible lowest cost option

Keep people who create math models employed

What is the relationship between inventory cost and transportation cost? Explain.

Question 13

What is one specific way you would recommend a bowling alley take advantage of revenue management?

Question 14

Complete the MRP planning schedule below and answer the THREE questions below. Lead time is 1 week, safety stock is 0, order policy is EOQ of 75.

In each blank put only the number as your answer. (There is no partial credit for each individual part, so no need to show your work.)

1. What are the NET REQUIREMENTS in time period *3*? (Put the answer in the first blank below.)

2. What are the PLANNED ORDER RELEASES in time period *1*? (Put the answer in the second blank below.)

3. What are the PROJECTED AVAILABLE BALANCE in time period *3*? (Put the answer in the third blank below.)

Question 15

A particular raw material is available at the following prices:

1) $3.10 for orders of less than 1000

2) $3.08 for orders between 1000 and 1999

3) $3.07 for orders 2000 and larger

Annual demand is 12000 items, order cost is $25, and holding cost is 20% of the item's cost per year. What is the economic order quantity? Show work.

I wanna know what is different between fixed cost and variable cost what it change and what it cannot be change between them ?

P8-9 Milford Company determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2015, 2016, and 2017, as follows:

Cost Lower of Cost and Net Realizable Value

Dec. 31, 2015 $60,000 $60,000

Dec. 31, 2016 79,000 74,500

Dec. 31, 2017 78,800 69,000

Instructions (a) Prepare the journal entries that are required at December 31, 2016 and 2017, assuming that a periodic inventory system and the direct method of adjusting to NRV are used. (b) Prepare the journal entries that are required at December 31, 2016 and 2017, assuming that a periodic inventory system is used, with inventory recorded at cost and reduced to NRV through the use of an allowance account.

The following terms are used to describe various economic characteristics of costs: Opportunity Cost Average Cost Sunk Cost Out-of-pocket Cost Differential Cost Required: Choose one of the preceding terms to characterize each of the amounts described below. Each term may be used only once (5 Points). (1). The cost of merchandise inventory purchased five years ago. The goods are now obsolete. (2). The cost of feeding 300 children in a public school cafeteria is $450 per day, or $1.50 per child per day. What economic term describes this $1.50 cost? (3). The management of a high-rise office building uses 3,000 square feet of space in the building for its own administrative functions. This space could be rented for $30,000. What economic term describes this $30,000 of lost rental revenue? (4). The cost of building an automated assembly line in a factory is $700,000; a manually operated assembly line would cost $250,000. What economic term is used to describe the $450,000 variation between these two amounts? (5). Refer to the preceding question and assume that the firm is currently building the assembly line for $700,000. What economic term is used to describe the $700,000 construction cost?

Describe the relationship between average variable cost and average total cost. How are the general shapes of the AVC and ATC curves related?

Below is a table which shows a firm’s cost structure.

(a) Is the firm facing a short-run or long-run condition? Explain.

(b) Does the firm exhibit labour specialisation? Explain.

1. A market basket has three items in 1990, refrigerators that cost $600, washers that cost $300, and stoves that cost $200. In 2017, these items (similar brand, size and quality) cost $1000, $600, and $500, respectively. I decide to say that the base year is 2000 where the costs of these items were $800, $450, and $350, respectively. In each year, people purchased 10 refrigerators, 20 washers and 25 stoves. Calculate the CPI index for 1990 and 2017.

Item Base Year 2000 1990 cost 2017 cost

Refrigerator $800 $600 $1000

Washers $450 $300 $600

Stoves $350 $200 $500

1. The substitution effect is one problem with the CPI. Using data from problem one and from data that you make up, show me why the substitution effect is a problem. Does the substitution effect overstate or understate inflation. Your calculations will show which one.

1. As mentioned above, one problem with the CPI is the substitution effect. Another problem is that taxes are not taken into account. We did not talk about disappearing products (type writers) or products that appear (computers) through time. How do you think these things are accounted for when calculating the CPI?

1. Show me a graph of the business cycle and label it.

A monopolist (Firm 1) may be a low-cost type, with constant marginal cost of production 10, or a high-cost type, with constant marginal cost of 20, with probabilities p and 1-p respectively. It has no fixed cost. Only the monopolist knows his type. The game has two stages. In stage one, a potential entrant (Firm 2) with constant marginal cost of 15 decides whether to enter the market. Entry requires a fixed investment of $100. If Firm 2 enters the market, it learns what Firm 1’s type is, and both engage in Bertrand competition in homogeneous products in the second stage. Consumer demand is 100 units regardless of the price.

(a)What is the Nash Equilibrium of the second-stage game if Firm 2 enters? Solve the game for each type of Firm 1.

(B)Argue that Firm 2 would not enter if it believes Firm 1 is certainly low cost but would enter if it believes Firm 1 is certainly high cost.

(C)What is the value of p under which Firm 2 will decide to enter?

. Using the concepts of opportunity cost, marginal analysis and sunk cost what advice would you give the following people: (3 points)

A) Dani loves to eat at the buffet at the casino. She gorges herself so that she is sick for the next two days. She says she does it because it doesn’t cost her anything extra? Your advice?

B) Layne works for a surveying company that spends $20k on surveys to decide whether or not to launch a new product or service. Then the company decides it needs to launch the product or service to earn back the monies spent on the survey. Your advice?

C) Andrea decides her favorite food is In-N-Out Double Double cheeseburgers, therefore, she decides that she will eat nothing but Double Doubles from here on out. Your advice?

D) A student has a car to sell. The student spent $500 on tires in the last year. The student could sell the car for $3000, however, if the student upgraded the car stereo he could sell the car for $3,500. The upgrade would cost $350. Should the student sell the car as is, or upgrade the stereo?

E) Brandy is at a vacation resort in San Diego where a kayaking trip in the harbor was included in the price for the room. Brandy is deathly afraid of kayaking in the ocean because she gets sick. But she thinks because she has paid for it, she should go kayaking. Your advice?