Scribd
Upload
194 views2 pages

05 - Quiz - 1 LOgistics

This document contains a multiple choice quiz on inventory management concepts and a problem-solving question calculating optimal order quantity. The quiz assessed dependent demand, raw materials, finished goods, ordering costs, and setup costs. It also listed components of holding costs. The problem asked to calculate economic order quantity, number of orders per year, ordering cost, carrying cost, and total inventory cost for a company ordering screws based on chair production volume and given ordering and carrying costs. The provided solution showed the calculations for each item.

Uploaded by

Robin Lusabio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
194 views2 pages

05 - Quiz - 1 LOgistics

This document contains a multiple choice quiz on inventory management concepts and a problem-solving question calculating optimal order quantity. The quiz assessed dependent demand, raw materials, finished goods, ordering costs, and setup costs. It also listed components of holding costs. The problem asked to calculate economic order quantity, number of orders per year, ordering cost, carrying cost, and total inventory cost for a company ordering screws based on chair production volume and given ordering and carrying costs. The provided solution showed the calculations for each item.

Uploaded by

Robin Lusabio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

NAME:LUSABIO JR, ROBIN A.

DATE: 01/04/2023 SCORE:

I. MULTIPLE CHOICE (5 items x 2 points)


Encircle the letter of the correct answer.

1. This category of inventory is represented by an item whose demand is linked directly to the
demand or production level of another item.
A. Dependent demand

2. These inventories include resources a business uses to produce its own goods.

D. Raw materials and component

3. These inventories include products that are ready to be shipped directly to customers or
retailers.
C. Finished goods

4. These costs include fixed and variable expenses associated with purchasing additional
inventory.
B.Ordering

5. These costs are associated with changing production system or arrangement.


A.Setup

II. ENUMERATION (4 items x 2 points)


Identify the components of holding costs, in any order.

1. Capital or Opportunity Cost


2. Physical Space Occupied By The Inventory
3. Handling Of Inventory
4. Pilferage And Scrap

III. PROBLEM-SOLVING
ABC Furniture desires to determine the optimal order quantity of screws used in the production of
their wooden chairs. The annual demand for chairs is 150,000 units. The cost to place an order of
screws is P1,500 and the carrying cost is P2 per unit.

Requirements (5 items x 5 points):


A. Economic Order Quantity (EOQ)
B. No. of orders per year
C. Ordering cost
D. Carrying cost
E. Total Inventory cost
SOLUTION:

1. EOQ = 2( 2DS / H )

= 2(2(150,000 X 1,500) / 2)

=2(450,000,000 / 2)

=2(225,000,000)

EOQ= 15,000

2. No. of order per year = annual demand / EOQ

= 150,000 / 15,000

Order per year = 10

3. Ordering Cost = FOC x No. Of Order per year

= 1,500 x 10

Ordering Cost = P15,000.00

4. Carrying Cost = Carrying Cost x EOQ/2

= 2 x 15,000 / 2
= 2 x 7,500

Carrying Cost = P15,000.00

5. Total Inventory Cost = Ordering Cost + Carrying Cost

= P15,000 + P15,000

Total Inventory Cost = P30,000.00

Rubric for grading:


CRITERIA POINT
S
Complete solution with correct answer 5
Last two (2) major steps of the solution are 4
incorrect
Half of the solution is correct 3
First two (2) major steps of the solution are 2
correct
First major step of the solution is correct 1

05 Quiz 1 *Property of STI


02Page 1 of 1

You might also like