## Description

SAMCO is a company that sells pump housings to other manufacturers. The annual demand is 5,000 units and the ordering cost is $80 per order. The optimal number of pump housings (Q) is 400 units per order. The company’s annual ordering cost is:

a. | $100 | |

b. | $50 | |

c. | $500 | |

d. | $1000 |

Consider the following Material structure tree. If the demand of A is 100 units, what would be the demand of the component E?

a. | 3000 | |

b. | 2400 | |

c. | 2000 | |

d. | 2500 |

The Kenneth State organization sells a product for which the annual demand is 5000 units. The average holding cost is $ 1.00 per unit per year and the ordering cost is $ 100 per order. The optimal number of units to be ordered (Q) is 1000. What is the total annual cost?

a. | $ 2000 | |

b. | $ 1000 | |

c. | $ 1500 | |

d. | $ 2500 |

In labor planning formulation, the subject to constraint that “there are only 50 full-time tellers (labeled as F)” is given by _________.

a. | F + 50 > 0 | |

b. | F > 50 | |

c. | F ≤ 50 | |

d. | All of the above |

Fleming Accessories produces paper slicers used in offices and in art stores. The annual demand is 10,000 units and is constant throughout the year. Fleming produces the slicers in batches. On average, Fleming can manufacture 100 slicers per day. Demand for these slicers during the production process is 50 per day. The setup cost for the equipment necessary to produce the slicers is $100. Carrying costs are $1 per slicer per year. How many slicers should Fleming manufacture in each batch? (Optimal production quantity)

a. | 1000 | |

b. | 3000 | |

c. | 4000 | |

d. | 2000 |

Crescent Manufacturing produces refrigerator and the company production is 200 units per day and the daily demand is 100 units. If optimal quantity (Q) produced during each batch is 2500 units, then the Average inventory level is:

a. | 500 | |

b. | 650 | |

c. | 625 | |

d. | 1000 |

The annual demand for Boston Company is 624 units and the ordering cost (C_{o}) is $100 per order. The average carrying cost (C_{h}) per unit per year amounts to $40 and the optimal number of units to be ordered (Q) are 200 units. What is the Annual holding cost?

a. | $4000 | |

b. | $4312 | |

c. | $312 | |

d. | $5000 |

An automobile parts manufacturer produces two types of automobile parts used for making four wheelers. Type1 (X_{1}) requires ½ hour of labor and 1 hour of machine time. Type 2 ( X_{2} ) requires 1 hour of labor time and 2 hours of machine time. There are 500 hours available per week of labor and 700 machine hours available. Type 1 has a profit margin of $ 35 a unit and Type 2 have a profit margin of $ 50 a unit. The automobile parts manufacturer must choose the quantity of Type 1 and Type 2 machinery parts, which maximizes profit (Z). Formulate this as linear programming problem by defining the objective function.

a. | Maximize Z = 35X | |

b. | Minimize Z = 35X | |

c. | Maximize Z = 50X | |

d. | Minimize Z = 50X |

The purpose of the EOQ model is to achieve a balance between the cost of holding inventory and the cost of stock-outs.

True

False

Hinsdale company wants to follow a policy that result in stockouts occurring only 5% of the time on any order which yields Z=1.65. If the standard deviation is 9, then the Safety Stock(SS) of the company would be maintained at 14.85.

True

False

If Samsung company’s daily production (p) is 20 units and the optimal quantity produced (Q) is 600 units. Then the length of production run (t) will be 30 days.

True

False

The overall objective of the Quantity Discount model is Maximize total inventory costs.

True

False

The daily demand of computer chips is 10 units and if 4 days must be allowed between order placement and order receipt then the ROP (reorder point) is 40 units.

True

False

In LP model for transportation problems, if there are 3 sources and 2 destinations, then there will be 6 decision variables and 5 constraints (Excluding Non-Negativity Constraint).

True

False

In linear programming transportation model, the coefficients of the objective function can represent either the cost or the profit from shipping goods along a particular route.

True

False

In an EOQ model, if the optimal order quantity is 200 units. Then the average inventory level will be 100 units.

True

False

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## Explanation & Answer

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SAMCO is a company that sells pump housings to other manufacturers. The annual demand is

5,000 units and the ordering cost is $80 per order. The optimal number of pump housings (Q) is

400 units per order. The company’s annual ordering cost is:

a. $100

b. $50

c. $500

d. $1000

Consider the following Material structure tree. If the demand of A is 100 units, what would be

the demand of the component E?

a. 3000

b. 2400

c. 2000

d. 2500

The Kenneth State organization sells a product for which the annual demand is 5000 units. The

average holding cost is $ 1.00 per unit per year and the ordering cost is ...