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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. Display inventory carried to increase product visibility stimulate demand






2. Usually a firm's largest expenditure






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






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






5. Demands - replenishments - constraints - and costs






6. 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)






7. 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






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






9. Single order vs repetitive order






10. 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






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






12. 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






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






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






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






16. Demands - replenishments - - constraints - and costs






17. 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






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






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






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






21. Sacrificed in exchange for buying needed machines






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






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






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






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






26. Often divided up over all departments each with its own agenda: purchasing-raw materials and purchased items - manufacturing-work in progress - marketing-finished goods and distribution - it is usually best to give responsibility for all inventory






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






28. Time factor - discontinuity factor - uncertainty factor - and economic factor






29. Constant vs variable






30. Constant vs variable - independent vs dependent






31. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost






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






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






34. 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






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






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






37. 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






38. Internal vs external






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






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






41. Minimum rate of return expected on new investments






42. 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






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






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






45. 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






46. 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






47. Often everybody's concern - but nones responsibility






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






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






50. 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)







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