SOLVED

Section 5Â Â Lot-Sizing Techniques 1) The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost. 2) In general, the lot-for-lot approach should be used whenever economical. 3) MRP can be effective only if very accurate lot sizes are calculated in advance. 4) Which of the following lot-sizing techniques results in the lowest holding costs? A) lot-for-lot B) EOQ C) POQ D) Wagner-Whitin algorithm E) the quantity discount model 5) Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? A) The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. C) The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. D) The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E) All of the above are true. 6) What lot-sizing technique is generally preferred when inventory holding costs are extremely high? A) lot-for-lot B) EOQ C) POQ D) the Wagner-Whitin algorithm E) All of the above are appropriate for the situation. 7) For the lot-sizing technique known as lot-for-lot to be appropriate: A) future demand should be known for several weeks. B) setup cost should be relatively small. C) annual volume should be rather low. D) item unit cost should be relatively small. E) the independent demand rate should be very stable. 8) Which of the following statements regarding lot-sizing is TRUE? A) EOQ principles should be followed whenever economical. B) Too much concern with lot-sizing results in false accuracy. C) Lot-for-lot cannot be modified for scrap allowance or process constraints. D) The Wagner-Whitin algorithm simplifies lot size calculations. E) All of the above are true. 9) Which lot-sizing technique orders the quantity needed during a predetermined time between orders? A) economic order quantity B) periodic order quantity C) lot-for-lot D) time fencing E) part-period balancing 10) What does the POQ interval equal? A) the number of periods of average demand covered by the safety stock B) the same number of periods that are on the “not to be rescheduled” side of the time fence C) EOQ / maximum gross requirement D) the number of periods until the incoming projected on hand runs out E) EOQ / average demand per period