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. Demands - replenishments - constraints - and costs






2. Have most complex and difficult inventory problems






3. Customers demand for finished goods






4. 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






5. 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)






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






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






8. 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)






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






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






11. Minimum rate of return expected on new investments






12. 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






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






14. 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






15. 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






16. 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






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






18. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






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






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






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






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






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






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






27. Demands - replenishments - - constraints - and costs






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






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






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






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






32. 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






33. 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






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






35. Sacrificed in exchange for buying needed machines






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






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






38. Display inventory carried to increase product visibility stimulate demand






39. 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






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






41. 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






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






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






44. 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






45. 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






46. 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






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






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






49. 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






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