ISM Exam INTE Topic 3 Question 8 Discussion

Actual exam question for ISM's INTE exam

Question #: 8
Topic #: 3

[All INTE Questions]

A graph of a firm's inventory replenishment system reveals the following:

Which of the following is TRUE'

AThe order cycle is two and a half days.

BThe average inventory is 1,850 units.

CThere is a fixed order quantity of 500 units.

DThere is near instantaneous replenishment.

Show Suggested Answer

Suggested Answer: D

The graph shows inventory levels being replenished back to the maximum level immediately after reaching zero, indicating near-instantaneous replenishment. This is characteristic of a system where the lead time for orders is very short or negligible, allowing the firm to maintain optimal inventory levels without significant delay. This approach minimizes stockouts and ensures a con-tinuous supply of inventory. Reference:

* Stevenson, W. J. (2018). Operations Management. McGraw-Hill Education.

* Silver, E. A., Pyke, D. F., & Thomas, D. J. (2016). Inventory and Production Management in Supply Chains. CRC Press.

by Dong at Jul 19, 2024, 01:15 AM

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Tijuana

5 months ago

What is this, a graph for ants? I can barely see the details. But I think option C is the way to go.

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Lashawn

5 months ago

Hmm, the average inventory of 1,850 units seems a bit high. I'm going to have to go with option B on this one.

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Verda

5 months ago

Based on the graph, it looks like there's a steady saw-tooth pattern, so I'd say option D, near instantaneous replenishment, is the correct answer here.

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Annmarie

5 months ago

Yes, option D makes sense based on the graph.

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Viola

5 months ago

I agree, the graph does show a steady pattern.

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7 months ago

I think the answer is C.

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