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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. 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
Capital cost
Classifying inventory problems
Sub goals of inventory management
Source of supply
2. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Inventory flow
Capital cost
Safety stock (buffer stock)
Retailers - wholesalers - and distributors
3. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Major properties of inventory
Types of inventory costs
Internal shortage
Inventory carrying cost
4. 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)
Anticipation stock (seasonal stock)
Storage space costs
Decoupling stock
Purchase costs
5. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Working stock (cycle stock)
Inventory flow
Inventory risk cost
Goals of inventory management
6. Demands - replenishments - - constraints - and costs
External shortage
Inventory carrying cost
Properties of inventory
Decoupling stock
7. 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
Inventory/materials manager
Inventory management
Retailers - wholesalers - and distributors
8. Time factor - discontinuity factor - uncertainty factor - and economic factor
Sub goals of inventory management
The categorization of inventory by reasons for its existence
Initial phase of inventory flow
Inventory carrying cost
9. 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
Supplies inventory
Responsibility
Problems become more complex
Inventory management
10. 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
Discontinuity Factor
Storage space
Different departments in a firm
11. 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
Classifying inventory problems
Problems become more complex
Responsibility
Discontinuity Factor
12. 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
Raw Materials Inventory
Capital cost
Contraints
Second phase
13. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Type of lead time
Replenishments
Growing companies
14. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Classifying inventory problems
Second phase
Purchasing discounts
15. Single order vs repetitive order
Purchase costs
Repetiveness
Functional factors to explain why inventory exists
Less inventory
16. Those cost that vary with the amount of inventory in the short run
Less inventory
Storage space
Driving force behind the flow
Type of lead time
17. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory management
In-Proccess Goods
Discontinuity Factor
Properties of inventory
18. 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
Inventory
Economic Factors
Responsibility
Inventory flow
19. 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
Different departments in a firm
Growing companies
Uncertainty Factors
Inventory/materials manager
20. Cost of obsolescence - damage cost - shrinkage (theft) cost
Third phase
Uncertainty Factors
Inventory risk cost
Type of inventory system
21. Display inventory carried to increase product visibility stimulate demand
Psychic stock
Demands
Additional phases
Safety stock (buffer stock)
22. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Purchasing discounts
The categorization of inventory by reasons for its existence
Additional phases
23. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Purchase costs
Order cost or set up cost
Different departments in a firm
Pipeline stock
24. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Type of lead time
How are inventory problems classified
Less inventory
Safety stock (buffer stock)
25. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Driving force behind the flow
Type of lead time
Functional classifications
26. Capital costs - storage space costs - inventory service cost - inventory risk cost
Anticipation stock (seasonal stock)
Major components of inventory carrying cost
Psychic stock
Working stock (cycle stock)
27. Gives firms a competitive advantage due to lower costs and greater flexibility
Cost accumulation
Purchasing discounts
Less inventory
Problems become more complex
28. Have most complex and difficult inventory problems
Storage space costs
How are inventory problems classified
Cost accumulation
Manufacturers
29. Associated insurance cost - associated taxes
Goals of inventory management
Inventory service cost
Growing companies
Stock out costs
30. 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)
Growing companies
Second phase
Third phase
Costs
31. It takes time to make a product - but consumers want them on demand
Finished Goods Inventory
Time Factor
Problems become more complex
Sub goals of inventory management
32. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Consumption
Different departments in a firm
External shortage
In-Proccess Goods
33. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Storage space costs
Additional phases
Classifying inventory problems
Consumption
34. 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)
Capital cost
Reasons why inventory exists
Inventory/materials manager
Initial phase of inventory flow
35. Minimum rate of return expected on new investments
Capital costs (opportunity costs)
Additional phases
Hurdle rate
Type of inventory system
36. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory management
Raw Materials Inventory
Classifying inventory problems
Storage space costs
37. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Classifying inventory problems
Internal shortage
Uncertainty Factors
38. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Hurdle rate
Sub goals of inventory management
Retailers - wholesalers - and distributors
39. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Anticipation stock (seasonal stock)
Third phase
Costs
Inventory service cost
40. Constant vs variable - independent vs dependent
Classification of Inventory item
Storage space costs
Type of demand
Type of inventory system
41. One firms finished goods may be another firms supplies or raw materials
The categorization of inventory by the purpose that it serves
Type of lead time
Time Factor
Classification of Inventory item
42. Customers demand for finished goods
Growing companies
Driving force behind the flow
In-Proccess Goods
Types of inventory costs
43. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Type of demand
Type of inventory system
Uncertainty Factors
Benefits of inventory/material manager
44. Usually a firm's largest expenditure
Inventory flow
Contraints
Material costs
Internal shortage
45. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
The categorization of inventory by the purpose that it serves
Inventory management
Inventory/materials manager
Supplies inventory
46. 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)
Replenishments
Inventory service cost
Capital costs (opportunity costs)
Demands
47. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Finished Goods Inventory
Economic Factors
Purchase costs
Anticipation stock (seasonal stock)
48. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Economic Factors
Order cost or set up cost
Storage space costs
Safety stock (buffer stock)
49. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Major properties of inventory
Inventory risk cost
Working stock (cycle stock)
Psychic stock
50. Internal vs external
Anticipation stock (seasonal stock)
Supplies inventory
Discontinuity Factor
Source of supply