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Supply Chain Management, 5e (Chopra/Meindl)
Chapter 11 Managing Economies of Scale in the Supply Chain: Cycle Inventory
11.1 True/False Questions
1) Cycle inventory exists because producing or purchasing in large lots allows a stage of the
supply chain to exploit economies of scale and increase cost.
Answer: FALSE
Diff: 2
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
Learning Outcome: Discuss options for measuring supply chain performance
2) A lot or batch size is the quantity that a stage of the supply chain either produces or purchases
at a given time.
Answer: TRUE
Diff: 2
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
Learning Outcome: Discuss options for measuring supply chain performance
3) Cycle inventory is the physical inventory in the supply chain due to either production or
purchases demanded by the customer.
Answer: TRUE
Diff: 2
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
Learning Outcome: Discuss options for measuring supply chain performance
4) The inventory profile is a plot depicting the level of inventory over time.
Answer: TRUE
Diff: 1
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
Learning Outcome: Discuss options for measuring supply chain performance
5) When demand is steady, cycle inventory and lot size are related as follows:
Cycle Inventory = Lot Size 2 = Q*2.×
Answer: FALSE
Diff: 2
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Discuss options for measuring supply chain performance
6) Lot sizes and cycle inventory do not affect the flow time of material within the supply chain.
Answer: FALSE
Diff: 1
Topic: 11.1 The Role of Cycle Inventory in a Supply Chain
AACSB: Analytic Skills
Learning Outcome: Discuss options for measuring supply chain performance
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