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. 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)






2. Constant vs variable - independent vs dependent






3. 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






4. 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






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






6. Time factor - discontinuity factor - uncertainty factor - economy factor






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






8. Customers demand for finished goods






9. Demands - replenishments - - constraints - and costs






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






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






12. 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






13. 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






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






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






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






17. Constant vs variable






18. 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






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






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






21. Single order vs repetitive order






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






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






24. Demands - replenishments - constraints - and costs






25. 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






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






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






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. 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






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






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






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






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






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






35. 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)






36. 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






37. 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






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






39. 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






40. 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






41. Associated insurance cost - associated taxes






42. Sacrificed in exchange for buying needed machines






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






44. Minimum rate of return expected on new investments






45. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






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






47. 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






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






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






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