15 Questions
What is the formula for calculating the re-order level in the Min-Max Method?
Maximum usage × Maximum re-order
In the Two-bin Method, why is the first bin important?
It stores the items required from order receipt to next order placement
What does the Minimum level provide in the Min-Max Method?
Margin of safety
How is the re-order level calculated in the Order Cycling Method?
Cycle time multiplied by cycle review days
What is the purpose of setting a maximum quantity for each item in the Min-Max Method?
To minimize storage costs
What is the economic order quantity for the replacement blades?
240 units
How many orders are needed per year for the replacement blades?
100 orders
What is the total cost of ordering the replacement blades for the year?
$120
When should the next order for replacement blades be placed according to the reorder point calculation?
When stock level reaches 100 units
What is the approximate number of #6 screws Leyla Tas should order each time?
10,000 screws
How many supply orders of #6 screws would be placed per year?
10 orders/year
What is the approximate length of a supply order in days for #6 screws?
29.5 days
Calculate the minimum total cost of inventory for #6 screws per year.
235 MU/year
What is the safety stock level recommended for #6 screws to account for variability in demand?
2,000 screws
How does the annual ordering cost for #6 screws compare to the annual holding cost?
Annual ordering cost is exactly equal to the annual holding cost
Test your knowledge on materials control methods, including concepts such as ordering point, re-order level, and order cycling method. Calculate the minimum limit, maximum usage, re-order level, and more based on the given formulas and scenarios.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
