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






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






3. Customers demand for finished goods






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






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






6. Constant vs variable






7. Associated insurance cost - associated taxes






8. 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






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






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






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






12. 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






13. 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






14. Minimum rate of return expected on new investments






15. 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






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






17. 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






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






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






20. 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






21. 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






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






23. 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






24. Usually a firm's largest expenditure






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






26. Supplies - raw materials - in process goods - and finished goods






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






28. 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






29. 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






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






31. 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






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






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






34. 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






35. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation






36. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






37. Single order vs repetitive order






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






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






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






41. 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






42. 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)






43. 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






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






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






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






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






48. Internal vs external






49. Perpetual vs periodic






50. Demands - replenishments - - constraints - and costs