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. Often everybody's concern - but nones responsibility






2. Constant vs variable






3. Have most complex and difficult inventory problems






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






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






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






7. Externally (aka supply line inventory)-orders place but not yet received (orders being processed and orders in transit) - internally-work in progress - reasons for carrying: time/distance - work in process inventory






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






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. Demands - replenishments - - constraints - and costs






11. 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






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






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






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






15. Sacrificed in exchange for buying needed machines






16. Single order vs repetitive order






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






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






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






20. 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)






21. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)






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






23. 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)






24. 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






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






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






27. 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)






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






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






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






31. 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






32. Customers demand for finished goods






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






34. 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






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






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






37. 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






38. 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)






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






40. Constant vs variable - independent vs dependent






41. 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






42. Associated insurance cost - associated taxes






43. Usually a firm's largest expenditure






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






45. 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






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






47. 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






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






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






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