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Test your basic knowledge |
Inventory Management
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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. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be
Demands
Type of lead time
Source of supply
Reasons why inventory exists
2. Run out of material or supplies - production stopping - deadlines not met
Cost accumulation
Internal shortage
Material costs
Growing companies
3. Those cost that vary with the amount of inventory in the short run
Storage space
Benefits of inventory/material manager
Classification of Inventory item
Type of lead time
4. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Reasons why inventory exists
How are inventory problems classified
Storage space
Hurdle rate
5. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Types of inventory costs
Supplies inventory
Different departments in a firm
Material costs
6. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Growing companies
Contraints
The categorization of inventory by the purpose that it serves
Functional factors to explain why inventory exists
7. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Inventory service cost
Growing companies
Consumption
Benefits of inventory/material manager
8. Often short on cash because what little they have they devote to growth
Time Factor
Growing companies
Hurdle rate
Driving force behind the flow
9. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Properties of inventory
Third phase
Working stock (cycle stock)
Type of inventory system
10. Demands - replenishments - - constraints - and costs
Order cost or set up cost
Properties of inventory
Inventory management
Onventory management
11. Internal vs external
Storage space
Stock out costs
Source of supply
External shortage
12. Often everybody's concern - but nones responsibility
Reasons why inventory exists
Working stock (cycle stock)
Classification of Inventory item
Onventory management
13. 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
Inventory service cost
Consumption
Hurdle rate
Pipeline stock
14. Supplies - raw materials - in-processed goods - finished goods
Inventory management
Types of inventory
Problems become more complex
Type of lead time
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
Different departments in a firm
Anticipation stock (seasonal stock)
Cost accumulation
Type of inventory system
16. 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
Raw Materials Inventory
Stock out costs
Inventory service cost
Inventory holding costs
17. 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)
Initial phase of inventory flow
Purchasing discounts
Inventory service cost
Type of inventory system
18. Usually a firm's largest expenditure
Type of inventory system
Material costs
Inventory service cost
Inventory management
19. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Reasons why inventory exists
Goals of inventory management
Finished Goods Inventory
Storage space costs
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
Functional classifications
Onventory management
Inventory holding costs
Supplies inventory
21. It takes time to make a product - but consumers want them on demand
Inventory service cost
Inventory holding costs
Time Factor
Properties of inventory
22. Minimum rate of return expected on new investments
Type of inventory system
Additional phases
Hurdle rate
Inventory service cost
23. Customers demand for finished goods
Driving force behind the flow
Inventory holding costs
Functional factors to explain why inventory exists
Goals of inventory management
24. 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
Material costs
Replenishments
Inventory
Capital costs (opportunity costs)
25. 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
Replenishments
Responsibility
Hurdle rate
Psychic stock
26. 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
Pipeline stock
Inventory
Storage space
Sub goals of inventory management
27. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Contraints
Responsibility
Demands
28. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory management
Uncertainty Factors
Anticipation stock (seasonal stock)
Type of lead time
29. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Supplies inventory
Source of supply
Working stock (cycle stock)
Additional phases
30. Gives firms a competitive advantage due to lower costs and greater flexibility
Less inventory
Initial phase of inventory flow
Classification of Inventory item
Growing companies
31. 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
Economic Factors
Inventory management
Second phase
Retailers - wholesalers - and distributors
32. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Benefits of inventory/material manager
Manufacturers
Types of inventory
Contraints
33. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Additional phases
Replenishments
Order cost or set up cost
Major properties of inventory
34. Demands - replenishments - constraints - and costs
Goals of inventory management
Responsibility
Major properties of inventory
Functional classifications
35. Constant vs variable
Reasons why inventory exists
Initial phase of inventory flow
Type of lead time
Pipeline stock
36. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Sub goals of inventory management
Costs
Classifying inventory problems
Cost accumulation
37. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Types of inventory
External shortage
Stock out costs
Capital cost
38. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Raw Materials Inventory
Inventory carrying cost
Different departments in a firm
39. Constant vs variable - independent vs dependent
Onventory management
Third phase
Material costs
Type of demand
40. Cost of obsolescence - damage cost - shrinkage (theft) cost
Problems become more complex
Inventory risk cost
Time Factor
Additional phases
41. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Major properties of inventory
Type of lead time
The categorization of inventory by the purpose that it serves
Functional classifications
42. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Retailers - wholesalers - and distributors
Uncertainty Factors
Cost accumulation
Pipeline stock
43. Allows one part of the system to be isolated from the next
Onventory management
Decoupling stock
Major properties of inventory
Discontinuity Factor
44. 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
Finished Goods Inventory
Initial phase of inventory flow
Contraints
Inventory carrying cost
45. 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)
Material costs
Types of inventory
Reasons why inventory exists
The categorization of inventory by reasons for its existence
46. Capital costs - storage space costs - inventory service cost - inventory risk cost
Retailers - wholesalers - and distributors
Inventory risk cost
Major components of inventory carrying cost
Supplies inventory
47. 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
Type of inventory system
Inventory flow
Decoupling stock
Types of inventory costs
48. Display inventory carried to increase product visibility stimulate demand
Inventory management
Raw Materials Inventory
Psychic stock
Inventory service cost
49. One firms finished goods may be another firms supplies or raw materials
Sub goals of inventory management
Classification of Inventory item
Decoupling stock
Discontinuity Factor
50. 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
Stock out costs
Types of inventory
Different departments in a firm
Psychic stock