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Test your basic knowledge |
Inventory Management
Start Test
Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Have most complex and difficult inventory problems
Manufacturers
Material costs
Retailers - wholesalers - and distributors
Problems become more complex
2. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Reasons why inventory exists
Classifying inventory problems
The categorization of inventory by the purpose that it serves
Safety stock (buffer stock)
3. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Types of inventory costs
Time Factor
Major components of inventory carrying cost
4. Often short on cash because what little they have they devote to growth
Growing companies
Types of inventory
Demands
Benefits of inventory/material manager
5. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative - usually the largest component of the inventory carrying cost - usually set to the value of the firms
Capital costs (opportunity costs)
Working stock (cycle stock)
Basic types of inventory
Manufacturers
6. The economic consequences of an internal or external shortage - vary greatly between items and customers - very difficult to estimate - most firms avoid messing with this by specifying customer service levels
Functional classifications
Third phase
Stock out costs
Type of lead time
7. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Repetiveness
External shortage
Economic Factors
Onventory management
8. Time factor - discontinuity factor - uncertainty factor - economy factor
Inventory service cost
Inventory flow
Discontinuity Factor
Functional factors to explain why inventory exists
9. Associated insurance cost - associated taxes
Inventory service cost
Different departments in a firm
Type of demand
Retailers - wholesalers - and distributors
10. Inventory build up to cope with expected changes; reasons for carrying: seasonal surges - promotional items - scheduled stoppage - seasonal disruptions (weather - supply - ect) - other expected issues (possible labor shortages during contract n
Growing companies
Time Factor
Types of inventory
Anticipation stock (seasonal stock)
11. Constant vs variable
Type of lead time
Third phase
External shortage
Inventory
12. Low unit cost - high inventory turnover - consistency of quality - favorable supplier relations - continuity of supply - these goals of inventory management are in many ways in direct conflict
Cost accumulation
Sub goals of inventory management
Functional factors to explain why inventory exists
Demands
13. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Purchase costs
Decoupling stock
External shortage
Classifying inventory problems
14. Items purchased to be USED in the production process; they will be modified or transformed into the final product; isolate the supplier and the user
Growing companies
Inventory carrying cost
Raw Materials Inventory
Inventory service cost
15. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Pipeline stock
Sub goals of inventory management
Inventory holding costs
Finished Goods Inventory
16. Should be in charge of all materials-relatied functions including: purchasing - transportation - storage - production control - and inventory - ; they must be viewed on same level as finance - marketing - engineering - ext
Inventory/materials manager
External shortage
Supplies inventory
Responsibility
17. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Pipeline stock
Purchasing discounts
Replenishments
Inventory
18. Customers demand for finished goods
Inventory service cost
The categorization of inventory by the purpose that it serves
Driving force behind the flow
Inventory holding costs
19. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Time Factor
Order cost or set up cost
Third phase
Inventory service cost
20. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Problems become more complex
Cost accumulation
External shortage
Major properties of inventory
21. Run out of material or supplies - production stopping - deadlines not met
Order cost or set up cost
Inventory carrying cost
Internal shortage
Problems become more complex
22. Materials are used by manufacturing and fill a second pool of work in process - this pool must be managed in relation to the capacity of the facility
Benefits of inventory/material manager
Inventory holding costs
Second phase
Classification of Inventory item
23. Usually a firm's largest expenditure
Material costs
Inventory risk cost
Replenishments
Purchase costs
24. Demands - replenishments - constraints - and costs
Inventory carrying cost
Cost accumulation
Purchasing discounts
Major properties of inventory
25. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Third phase
Contraints
Time Factor
26. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Inventory management
Supplies inventory
Sub goals of inventory management
Inventory carrying cost
27. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Type of demand
The categorization of inventory by reasons for its existence
Benefits of inventory/material manager
28. Sacrificed in exchange for buying needed machines
Type of inventory system
Storage space
Inventory service cost
Purchasing discounts
29. Goods are purchased from suppliers and the first pool of inventory investment that need management forms - the quantity and variety of items in the pool should be times to meet the need for their use by the firm
The categorization of inventory by the purpose that it serves
Basic types of inventory
Initial phase of inventory flow
Inventory service cost
30. One firms finished goods may be another firms supplies or raw materials
Classification of Inventory item
Material costs
Inventory carrying cost
Storage space costs
31. Time factor - discontinuity factor - uncertainty factor - and economic factor
Types of inventory costs
The categorization of inventory by reasons for its existence
Type of lead time
Contraints
32. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Growing companies
Problems become more complex
Inventory
Contraints
33. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Functional factors to explain why inventory exists
Uncertainty Factors
Sub goals of inventory management
Benefits of inventory/material manager
34. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Type of demand
Driving force behind the flow
Initial phase of inventory flow
Inventory risk cost
35. Allows one part of the system to be isolated from the next
Type of demand
In-Proccess Goods
Safety stock (buffer stock)
Decoupling stock
36. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Major components of inventory carrying cost
Responsibility
In-Proccess Goods
Supplies inventory
37. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Reasons why inventory exists
Storage space costs
Inventory service cost
Cost accumulation
38. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Purchase costs
Retailers - wholesalers - and distributors
Safety stock (buffer stock)
39. The cost associated with the money tied up in inventory and the cost associated with maintaining it in storage - usually expresses as a percentage of items value
Inventory carrying cost
Capital cost
Functional classifications
Retailers - wholesalers - and distributors
40. Allows freedom of operation for members of the supply chain; allows the treatment of various dependent operations (ex: retailing - warehousing - manufacturing - and purchasing) in an independent and economical manor
Discontinuity Factor
Decoupling stock
Uncertainty Factors
Finished Goods Inventory
41. Units taken from inventory - can be categorized by: 1) size (magnitude/quality - constant vs variable and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be
Uncertainty Factors
Demands
Time Factor
Finished Goods Inventory
42. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Discontinuity Factor
Inventory service cost
Responsibility
43. Minimum rate of return expected on new investments
Replenishments
Hurdle rate
Internal shortage
Raw Materials Inventory
44. The cost associated with the money tied up in inventory and the cost associated with maintaining it in storage - usually expressed as a percentage of items value - includes capital costs - storage space costs - inventory service costs and invento
Inventory holding costs
Types of inventory
Classifying inventory problems
Demands
45. As you move up in the supply chain...
Problems become more complex
Basic types of inventory
Working stock (cycle stock)
Contraints
46. Involves controlling the flow of materials into and out of a system - a big timing problem
Additional phases
Working stock (cycle stock)
Inventory management
Major components of inventory carrying cost
47. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Safety stock (buffer stock)
Pipeline stock
Functional factors to explain why inventory exists
Working stock (cycle stock)
48. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Functional factors to explain why inventory exists
Contraints
Safety stock (buffer stock)
Stock out costs
49. Are associated with the operation of an inventory system and result from action or inaction - they are the basic economics parameters to any inventory decision model (purchase cost - order set up cost - stock our cost - and holding cost)
Second phase
Classification of Inventory item
Costs
Stock out costs
50. Perpetual vs periodic
Type of inventory system
Safety stock (buffer stock)
Types of inventory
Cost accumulation