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






2. Sacrificed in exchange for buying needed machines






3. The cost for the item as it is laced in inventory - unit purchase cost (if obtained externally and includes delivery and transportation costs) - unit production cost (if made in house and includes labor - material and overhead costs)






4. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost






5. Constant vs variable






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






7. Supplies - raw materials - in process goods - and finished goods






8. 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






9. Each pool requires synchronization of the rate of flow into and from it - no pool can be controlled without respect to the others - problems in one pool will effect all others - raises question of how much to order at any given time and when to pl






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






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






12. Constant vs variable - independent vs dependent






13. Customers demand for finished goods






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






15. 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






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






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






18. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)






19. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation






20. Internal vs external






21. Often short on cash because what little they have they devote to growth






22. 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






23. 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






24. Supplies - raw materials - in-processed goods - finished goods






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






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






27. Display inventory carried to increase product visibility stimulate demand






28. 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






29. Demands - replenishments - - constraints - and costs






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






31. Gives firms a competitive advantage due to lower costs and greater flexibility






32. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock






33. 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)






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






35. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative






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






37. Often everybody's concern - but nones responsibility






38. Demands - replenishments - constraints - and costs






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






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






41. Usually a firm's largest expenditure






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






43. 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






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






45. 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






46. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions






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






48. Repetiveness - source of supply - type of demand - type of lead time - type of inventory






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






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