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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. 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
Pipeline stock
Initial phase of inventory flow
Classifying inventory problems
Inventory management
2. Minimum rate of return expected on new investments
Demands
Goals of inventory management
Hurdle rate
Type of demand
3. As you move up in the supply chain...
Problems become more complex
Cost accumulation
Goals of inventory management
Repetiveness
4. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Pipeline stock
Cost accumulation
Storage space
Different departments in a firm
5. Have most complex and difficult inventory problems
Manufacturers
Time Factor
Costs
Additional phases
6. 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
Safety stock (buffer stock)
Consumption
Inventory/materials manager
Second phase
7. Constant vs variable - independent vs dependent
External shortage
Type of demand
Less inventory
Type of inventory system
8. 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
Inventory carrying cost
Psychic stock
Inventory risk cost
Responsibility
9. 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
Inventory service cost
External shortage
Inventory flow
Properties of inventory
10. 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
Type of demand
Repetiveness
Cost accumulation
Source of supply
11. 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
The categorization of inventory by the purpose that it serves
Inventory risk cost
Second phase
Demands
12. 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
Inventory holding costs
Classifying inventory problems
Problems become more complex
Basic types of inventory
13. Usually a firm's largest expenditure
Uncertainty Factors
Goals of inventory management
Material costs
Different departments in a firm
14. 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
The categorization of inventory by the purpose that it serves
Type of demand
Inventory
Raw Materials Inventory
15. Sacrificed in exchange for buying needed machines
Driving force behind the flow
Reasons why inventory exists
Purchasing discounts
Inventory holding costs
16. 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
How are inventory problems classified
Safety stock (buffer stock)
Additional phases
Inventory/materials manager
17. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Repetiveness
The categorization of inventory by the purpose that it serves
Goals of inventory management
Responsibility
18. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Inventory holding costs
Internal shortage
Safety stock (buffer stock)
External shortage
19. 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
Types of inventory costs
Anticipation stock (seasonal stock)
Inventory risk cost
Economic Factors
20. 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)
Inventory risk cost
Raw Materials Inventory
Third phase
Costs
21. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Material costs
Contraints
Pipeline stock
Time Factor
22. Internal vs external
Source of supply
Internal shortage
Reasons why inventory exists
Problems become more complex
23. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Additional phases
Functional classifications
Major properties of inventory
Less inventory
24. Run out of material or supplies - production stopping - deadlines not met
Internal shortage
Finished Goods Inventory
Inventory
Storage space
25. 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)
Repetiveness
Functional factors to explain why inventory exists
Inventory service cost
Third phase
26. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
The categorization of inventory by reasons for its existence
Economic Factors
Manufacturers
Major properties of inventory
27. Those cost that vary with the amount of inventory in the short run
Storage space
Capital cost
Discontinuity Factor
Purchase costs
28. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Classifying inventory problems
Classification of Inventory item
Storage space costs
Anticipation stock (seasonal stock)
29. Associated insurance cost - associated taxes
Decoupling stock
Properties of inventory
Inventory service cost
Major properties of inventory
30. Single order vs repetitive order
Hurdle rate
Repetiveness
The categorization of inventory by the purpose that it serves
Type of lead time
31. Involves controlling the flow of materials into and out of a system - a big timing problem
Type of lead time
Inventory management
Replenishments
Psychic stock
32. 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
Type of demand
Uncertainty Factors
Capital costs (opportunity costs)
How are inventory problems classified
33. It takes time to make a product - but consumers want them on demand
Time Factor
Discontinuity Factor
Classification of Inventory item
Third phase
34. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Uncertainty Factors
How are inventory problems classified
Functional factors to explain why inventory exists
Manufacturers
35. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Decoupling stock
Classifying inventory problems
Types of inventory
36. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Internal shortage
Second phase
The categorization of inventory by reasons for its existence
Capital cost
37. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Economic Factors
Third phase
Inventory management
Working stock (cycle stock)
38. 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)
Demands
Major properties of inventory
Benefits of inventory/material manager
Purchase costs
39. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Types of inventory costs
Benefits of inventory/material manager
Onventory management
Properties of inventory
40. Often everybody's concern - but nones responsibility
Inventory flow
Inventory/materials manager
Onventory management
Discontinuity Factor
41. 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
Hurdle rate
Storage space
Responsibility
Benefits of inventory/material manager
42. Demands - replenishments - constraints - and costs
Discontinuity Factor
Demands
Pipeline stock
Major properties of inventory
43. One firms finished goods may be another firms supplies or raw materials
Economic Factors
Hurdle rate
Functional classifications
Classification of Inventory item
44. Often short on cash because what little they have they devote to growth
Psychic stock
Capital cost
Growing companies
Anticipation stock (seasonal stock)
45. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Storage space
Uncertainty Factors
Inventory holding costs
Inventory risk cost
46. Capital costs - storage space costs - inventory service cost - inventory risk cost
Discontinuity Factor
Functional factors to explain why inventory exists
Inventory service cost
Major components of inventory carrying cost
47. Allows one part of the system to be isolated from the next
Hurdle rate
Decoupling stock
Inventory service cost
Inventory service cost
48. 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
Cost accumulation
Functional factors to explain why inventory exists
Purchasing discounts
Pipeline stock
49. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Finished Goods Inventory
Consumption
Uncertainty Factors
External shortage
50. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Sub goals of inventory management
Working stock (cycle stock)
Additional phases
Type of lead time