3. Supply Chain Management

Inventory Management — Quiz

Test your understanding of inventory management with 5 practice questions.

Practice Questions

Question 1

Which component of total inventory cost includes expenses for storage, insurance, and opportunity cost of capital?

Question 2

If daily demand is 200 units, lead time is 3 days, and demand variability has a standard deviation of 15 units per day, what safety stock is required for a 90\\% service level ($z=1.28$)?

Question 3

For a periodic review system with review period $P=4$ days, average daily demand 70 units, lead time 2 days, and safety stock of 120 units, what is the order-up-to level $R$?

Question 4

Which of the following best describes safety stock in inventory management?

Question 5

In the EOQ model with annual demand $D=1800$ units, ordering cost $S=\\$60$ per order, and holding cost $H=\\$3$ per unit per year, what is the economic order quantity?