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






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






3. Often everybody's concern - but nones responsibility






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






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






6. Constant vs variable






7. Single order vs repetitive order






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






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






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






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






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






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






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






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






16. Internal vs external






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






18. 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






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






20. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






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






22. Minimum rate of return expected on new investments






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






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






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






26. A customers order cannot be met - backorder costs - present profit loss - future profit loss






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






28. 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






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






30. Associated insurance cost - associated taxes






31. Perpetual vs periodic






32. 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)






33. Demands - replenishments - - constraints - and costs






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






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






36. 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






37. 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






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






39. 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






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






41. 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






42. Customers demand for finished goods






43. Display inventory carried to increase product visibility stimulate demand






44. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability






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






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






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. 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)






49. 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)






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