Coyle Supply Chain Management: A Logistics Perspective, 9th Edition

Chapter 9 Test Bank

CHAPTER 9 TEST QUESTIONS

Multiple Choice

22. Inventory as an asset on the balance sheet and a __________ on the income statement.
a. liability
b. footnote
c. statement
d. variable expense

23. Inventory and the GDP grew by ______ amounts between 1994 and 2010.
a. the same
b. different
c. inversely proportional
d. exponential

24. Batching economies or cycle stocks usually arise from three sources. Which of these is not a
source?
a. procurement
b. transportation
c. production
d. demand

25. WIP inventories

a. not included on the balance sheet.
b. are associated with manufacturing.
c. are the same as VMI inventories.
d. are not impacted by EOQ.

26. Seasonal stocks are not influenced by

a. EOQ.
b. weather.
c. transportation.
d. holidays.

27. Which department does not have any impact on inventory?

a. finance
b. manufacturing
c. corporate governance
d. marketing

28. Capital cost focuses on the cost of capital tied up in ________and the resulting lost
opportunity from investing that capital elsewhere.
a. plants
b. inventory
c. distribution centers
d. WIP

29. Ordering cost refers to the expense of placing an order and

a. includes the cost of capital.
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Coyle Supply Chain Management: A Logistics Perspective, 9th Edition
Chapter 9 Test Bank

b. relates to the material management concept.

c. does not include the cost of the product.
d. not receiving it.

30. In the event of a “stockout” one of the things that could happen is
a. the vendor’s plant shuts down.
b. the cost of capital is increased.
c. the SCOR process would come into play.
d. extra shipping cost may be incurred.

31. Dependent demand relates to

a. demand for another inventory item or product.
b. the spare parts needed to fill the order.
c. VMI inventories.
d. the cost of capital for the firm.

32. An organization selling its products FOB destination holds the title to the goods until:
a. picked up by the trucker
b. products reach the customer’s facility
c. the customer is invoiced
d. the customer receives the goods into their inventory system

33. JIT is a _______ system.

a. push
b. Pareto’s Law
c. MRP
d. pull

34. A DRP system is usually coupled with a _______ system in an attempt to manage the
flow and timing of both inbound materials and outbound finished goods.
a. Kan Ban
b. VMI/ Consignment
c. MRP
d. JIT

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