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Test your basic knowledge |
Inventory Management
Start Test
Study First
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. 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
Problems become more complex
Benefits of inventory/material manager
Pipeline stock
In-Proccess Goods
2. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Sub goals of inventory management
Inventory management
Types of inventory costs
Goals of inventory management
3. Demands - replenishments - constraints - and costs
Inventory flow
Major properties of inventory
Capital costs (opportunity costs)
Discontinuity Factor
4. Constant vs variable - independent vs dependent
Inventory risk cost
Type of demand
Capital cost
Inventory service cost
5. Often everybody's concern - but nones responsibility
Decoupling stock
Costs
Inventory flow
Onventory management
6. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
Properties of inventory
Psychic stock
Cost accumulation
7. Constant vs variable
Capital costs (opportunity costs)
Type of lead time
Contraints
Functional factors to explain why inventory exists
8. 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
Different departments in a firm
Psychic stock
Inventory holding costs
Material costs
9. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Inventory management
Growing companies
Anticipation stock (seasonal stock)
10. 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
Inventory/materials manager
Reasons why inventory exists
Order cost or set up cost
The categorization of inventory by the purpose that it serves
11. It takes time to make a product - but consumers want them on demand
Type of lead time
Major properties of inventory
Time Factor
Consumption
12. Cost of obsolescence - damage cost - shrinkage (theft) cost
Sub goals of inventory management
Consumption
Inventory risk cost
Major components of inventory carrying cost
13. Capital costs - storage space costs - inventory service cost - inventory risk cost
Finished Goods Inventory
In-Proccess Goods
Type of demand
Major components of inventory carrying cost
14. Minimum rate of return expected on new investments
Inventory service cost
Hurdle rate
Source of supply
Problems become more complex
15. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Initial phase of inventory flow
Goals of inventory management
Cost accumulation
16. Customers demand for finished goods
Working stock (cycle stock)
Raw Materials Inventory
Inventory flow
Driving force behind the flow
17. Display inventory carried to increase product visibility stimulate demand
Psychic stock
Properties of inventory
Finished Goods Inventory
Growing companies
18. Those cost that vary with the amount of inventory in the short run
Stock out costs
Storage space
Type of demand
The categorization of inventory by reasons for its existence
19. Perpetual vs periodic
Initial phase of inventory flow
Inventory risk cost
Type of inventory system
Safety stock (buffer stock)
20. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classifying inventory problems
Reasons why inventory exists
Consumption
Sub goals of inventory management
21. Allows one part of the system to be isolated from the next
Decoupling stock
Second phase
Hurdle rate
Driving force behind the flow
22. 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
Purchase costs
Additional phases
Raw Materials Inventory
Classifying inventory problems
23. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory management
Economic Factors
Demands
Type of inventory system
24. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Discontinuity Factor
Finished Goods Inventory
Major properties of inventory
Supplies inventory
25. Supplies - raw materials - in process goods - and finished goods
Growing companies
Classifying inventory problems
Basic types of inventory
The categorization of inventory by the purpose that it serves
26. 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)
Safety stock (buffer stock)
Raw Materials Inventory
Costs
Storage space
27. Gives firms a competitive advantage due to lower costs and greater flexibility
Working stock (cycle stock)
Finished Goods Inventory
Less inventory
Types of inventory costs
28. 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
Stock out costs
Demands
Raw Materials Inventory
Major components of inventory carrying cost
29. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Different departments in a firm
Types of inventory costs
Replenishments
Contraints
30. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Second phase
External shortage
Basic types of inventory
31. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
The categorization of inventory by the purpose that it serves
How are inventory problems classified
Internal shortage
In-Proccess Goods
32. 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
Sub goals of inventory management
Inventory risk cost
Order cost or set up cost
In-Proccess Goods
33. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Onventory management
Uncertainty Factors
Contraints
Inventory holding costs
34. Internal vs external
Problems become more complex
Driving force behind the flow
Source of supply
Stock out costs
35. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Type of lead time
Growing companies
Inventory risk cost
36. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Functional classifications
Costs
Order cost or set up cost
Growing companies
37. 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
Inventory flow
Inventory service cost
Classifying inventory problems
Material costs
38. Have most complex and difficult inventory problems
Psychic stock
Sub goals of inventory management
Manufacturers
Type of inventory system
39. 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
Responsibility
Finished Goods Inventory
Major properties of inventory
External shortage
40. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Onventory management
Sub goals of inventory management
Inventory
In-Proccess Goods
41. 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)
Anticipation stock (seasonal stock)
Inventory service cost
Repetiveness
Internal shortage
42. Run out of material or supplies - production stopping - deadlines not met
Inventory/materials manager
Internal shortage
Second phase
Uncertainty Factors
43. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Driving force behind the flow
Inventory holding costs
Time Factor
External shortage
44. One firms finished goods may be another firms supplies or raw materials
Inventory
Manufacturers
Classification of Inventory item
Hurdle rate
45. 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
Growing companies
Source of supply
Types of inventory
Discontinuity Factor
46. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Purchase costs
Contraints
Problems become more complex
Working stock (cycle stock)
47. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory management
Inventory service cost
Basic types of inventory
Problems become more complex
48. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Major components of inventory carrying cost
Types of inventory
Finished Goods Inventory
Classifying inventory problems
49. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Inventory management
Type of lead time
Safety stock (buffer stock)
Properties of inventory
50. 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
Inventory carrying cost
Type of demand
Less inventory
Inventory flow