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. Constant vs variable






2. Demands - replenishments - constraints - and costs






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






4. Constant vs variable - independent vs dependent






5. Internal vs external






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






7. Single order vs repetitive order






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






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






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






11. 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






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






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






14. Usually a firm's largest expenditure






15. 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






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






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






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






19. 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






20. 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






21. 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






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






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






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






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






26. 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






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






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






29. Display inventory carried to increase product visibility stimulate demand






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






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






32. 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






33. Have most complex and difficult inventory problems






34. Associated insurance cost - associated taxes






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






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






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






38. Sacrificed in exchange for buying needed machines






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






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






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






42. Demands - replenishments - - constraints - and costs






43. 1) difficulties in synchronizing supply and demand (supply and demand often differ in the rates at which they provide and require stock) 2) material-related operations take time (goods cannot be produced the instant demand occurs)






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






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






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






47. 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






48. 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






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






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