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Question 51/69
A manufacturer has historically ordered fasteners utilizing monthly fixed order quantities. The firm wishes to explore the feasibility of using economic order quantity (EOQ), and determines that the EOQ is less than the supplier's quoted price break. Which of the following is the BEST course of action for the firm to take?
Correct Answer: D
Comparing the price break to the carrying cost of buying at the economic order quantity is essential. This analysis will help the firm determine the most cost-effective purchasing strategy by weighing the benefits of the price break against the costs associated with holding additional inventory. Reference: Inventory management and cost analysis.
- Question List (69q)
- Question 1: In preparation for a new product launch, a company reviews t...
- Question 2: A distributor receives orders from a customer for the follow...
- Question 3: A supply manager for JKL, Inc. is negotiating a contract wit...
- Question 4: A supply manager receives four bids for a special piece of e...
- Question 5: A disaster response manager plans to deliver pallets of bott...
- Question 6: Which of the following is the PRIMARY benefit of project gov...
- Question 7: UVX, Inc. is seeking suppliers of components to be used in a...
- Question 8: When identifying complex market conditions affecting product...
- Question 9: According to Six Sigma methodology, what percentage of parts...
- Question 10: Which of the following circumstances MOST warrants expeditin...
- Question 11: A firm needs to provide raw materials to accommodate a recen...
- Question 12: Which of the following is MOST likely to be an advantage of ...
- Question 13: XYZ, Inc. is a company based in the United States. XYZ purch...
- Question 14: MNO, Inc. is a manufacturing firm. MNO's end-of-year invento...
- Question 15: A manufacturer receives notice from one of its largest custo...
- Question 16: A supplier of aircraft seating receives a forecast from a ma...
- Question 17: A company develops long range material forecasts, analyzes i...
- Question 18: A manufacturer of gardening products has many international ...
- Question 19: A graph of a firm's inventory replenishment system reveals t...
- Question 20: A retailer of high-value consumer electronics experiences a ...
- Question 21: A company saves packaging from incoming shipments and utiliz...
- Question 22: FGH, Inc. is a beverage manufacturer. FGH is having difficul...
- Question 23: A large retailer and one of its suppliers establish a proces...
- Question 24: A company introduces a new product line. Although the line i...
- Question 25: A buyer is reviewing a quote for a shipment of electronic ma...
- Question 26: An engineering team requests assistance from a supply manage...
- Question 27: Which of the following are the quickest ways to ship food pr...
- Question 28: Which of the following is calculated by taking the selling p...
- Question 29: A supply manager is tasked with creating a business continui...
- Question 30: Material accumulated for a well-defined future need is calle...
- Question 31: A supply manager is reviewing safety stock for a particular ...
- Question 32: XYZ, Inc. is implementing a new automated system in its dist...
- Question 33: A manufacturer of gas-powered motors realigns its supply cha...
- Question 34: DEF, Inc. is in the ramp-up phase of a unique medical device...
- Question 35: In an effort to cut expenses, GHI, Inc. moves responsibility...
- Question 36: A company requires a physical tracking system for goods rece...
- Question 37: BCD, Inc. is an electronics manufacturer. For many years, BC...
- Question 38: Through cycle counting, a supply manager learns that invento...
- Question 39: Which of the following refers to the practice of buying a co...
- Question 40: BCD, Inc. owns five warehouses in various locations around t...
- Question 41: During an inventory review, a supply manager confirms that p...
- Question 42: Which of the following forecasting methods is regarded as pa...
- Question 43: A supply manager is analyzing potential costs associated wit...
- Question 44: A company supply manager conducts a review of current freigh...
- Question 45: A supply manager wishes to implement an enterprise resource ...
- Question 46: A cell phone retailer experiences excess inventory of a part...
- Question 47: XYZ, Inc. has experienced a significant increase in the numb...
- Question 48: A project charter addresses which of the following areas?...
- Question 49: A company's average inventory value has remained relatively ...
- Question 50: A manufacturer has facilities around the world and purchases...
- Question 51: A manufacturer has historically ordered fasteners utilizing ...
- Question 52: XYZ, Inc. notices that one of its suppliers has been failing...
- Question 53: A firm wants to contract with two suppliers to develop a cel...
- Question 54: A supplier with a previously good performance record has rec...
- Question 55: Which of the following will be MOST useful for measuring ser...
- Question 56: A manufacturing firm prepares the following materials requir...
- Question 57: A chemical supply company creates a new liquid chemical prod...
- Question 58: A company that manufactures rubber balls wishes to discontin...
- Question 59: Which of the following is the MOST important reason for esta...
- Question 60: A manufacturer purchased a piece of production equipment ove...
- Question 61: Which of the following refers to an agreement between a buye...
- Question 62: How long after the delivery date must a freight claim on a m...
- Question 63: Which of the following refers to an operations management ph...
- Question 64: A company is designing a new warehousing strategy. The firm ...
- Question 65: Which of the following buying strategies refers to planning ...
- Question 66: A firm engaging in low-cost country sourcing wants to assume...
- Question 67: A firm completes its near level production, five-month deman...
- Question 68: A company would like to reduce its inventory. The firm's inv...
- Question 69: Which of the following is a key requirement of xRP7...
