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. 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)






2. Sacrificed in exchange for buying needed machines






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






4. 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






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






6. Customers demand for finished goods






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






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






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






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






11. Internal vs external






12. 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






13. 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






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






15. Balance is key - concentration may be on one objective at certain times and on another at other times depending on needs of the firm - company policy should emphasize the need to focus on the total cost to the firm - bad idea to have lots of cash






16. Often everybody's concern - but nones responsibility






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






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






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






20. 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






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






22. 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






23. Single order vs repetitive order






24. 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






25. Demands - replenishments - constraints - and costs






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






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






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






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






30. Constant vs variable






31. Associated insurance cost - associated taxes






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






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






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






35. 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






36. Display inventory carried to increase product visibility stimulate demand






37. 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






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






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






40. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






43. 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






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






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






46. 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






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






48. Usually a firm's largest expenditure






49. 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






50. 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