Inventory holding cost


A) Which of the following is usually included as an inventory holding cost?

• Order placing
• Quantity discounts
• Breakage
• Typing up an order

B) Which production process term best describes the situation when activities in a stage of production must stop because there is no work?

• Blocking
• Starving
• Staging
• Buffering

C) In a Gantt chart the vertical axis represents which of the following?

• Time
• Revenue
• Tasks
• Cost

D) The Shingo system states that the way to prevent defects from coming out at the end of a process is to do which of the following:

• Redesign the process in order to mitigate the bottlenecks.
• Utilize SQC (statistical quality control).
• Introduce controls within the process.
• Slow down production rates until the process is in control.

E) Which of the following terms describes the time a unit spends actually being worked on together with the time spent waiting in a queue?

• Flow time
• Build time
• Cycle time
• Run time

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Operation Management: Inventory holding cost
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