Test your basic knowledge |

Inventory Management

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. Balance is key - concentration may be on one objective at certain times and on another at other times depending on needs of the firm - company policy should emphasize the need to focus on the total cost to the firm - bad idea to have lots of cash






2. A customers order cannot be met - backorder costs - present profit loss - future profit loss






3. As you move up in the supply chain...






4. Time factor - discontinuity factor - uncertainty factor - economy factor






5. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory






6. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






7. Often everybody's concern - but nones responsibility






8. 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)






9. 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






10. Involves controlling the flow of materials into and out of a system - a big timing problem






11. Single order vs repetitive order






12. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house






13. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply






14. Those cost that vary with the amount of inventory in the short run






15. Perpetual vs periodic






16. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use






17. 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






18. Capital costs - storage space costs - inventory service cost - inventory risk cost






19. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






20. Have most complex and difficult inventory problems






21. 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






22. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






23. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)






24. 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






25. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock






26. 1) stock of material on hand at a given time (tangible assets that can be seen - measured - and counted) 2) utilized assets waiting for sale of use






27. Usually a firm's largest expenditure






28. Includes associated insurance cost (ex insurance for fire and theft) and associated taxes ( can vary substantially from location to location - as much as 0% to 20% of value of goods held in inventory)






29. Sacrificed in exchange for buying needed machines






30. Display inventory carried to increase product visibility stimulate demand






31. 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






32. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods






33. Run out of material or supplies - production stopping - deadlines not met






34. Allows one part of the system to be isolated from the next






35. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production






36. One firms finished goods may be another firms supplies or raw materials






37. Constant vs variable - independent vs dependent






38. Internal vs external






39. 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






40. Cost of obsolescence - damage cost - shrinkage (theft) cost






41. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system






42. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another






43. 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






44. Associated insurance cost - associated taxes






45. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






46. Protection from the unexpected (forecast errors - break downs - strikes - disasters)






47. Demands - replenishments - constraints - and costs






48. Final product - available for storage - distribution - or sale; isolate the customer from the producer






49. It takes time to make a product - but consumers want them on demand






50. 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