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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. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Working stock (cycle stock)
Types of inventory
Stock out costs
Onventory management
2. Customers demand for finished goods
Driving force behind the flow
Additional phases
External shortage
Problems become more complex
3. Usually a firm's largest expenditure
Material costs
Growing companies
Types of inventory
In-Proccess Goods
4. 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
Classifying inventory problems
Raw Materials Inventory
Discontinuity Factor
Purchase costs
5. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Supplies inventory
Anticipation stock (seasonal stock)
Additional phases
Major properties of inventory
6. Sacrificed in exchange for buying needed machines
Inventory service cost
Purchasing discounts
Major components of inventory carrying cost
Repetiveness
7. Time factor - discontinuity factor - uncertainty factor - economy factor
Order cost or set up cost
Functional factors to explain why inventory exists
Material costs
Replenishments
8. 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
Classifying inventory problems
Pipeline stock
Inventory
Replenishments
9. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
In-Proccess Goods
Problems become more complex
Benefits of inventory/material manager
Replenishments
10. Involves controlling the flow of materials into and out of a system - a big timing problem
Types of inventory
External shortage
Benefits of inventory/material manager
Inventory management
11. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Basic types of inventory
Stock out costs
How are inventory problems classified
In-Proccess Goods
12. Single order vs repetitive order
Type of inventory system
Responsibility
Discontinuity Factor
Repetiveness
13. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Order cost or set up cost
Type of lead time
The categorization of inventory by the purpose that it serves
14. Allows one part of the system to be isolated from the next
Decoupling stock
Inventory risk cost
Uncertainty Factors
Hurdle rate
15. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Classification of Inventory item
Major properties of inventory
Types of inventory costs
16. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Storage space
Initial phase of inventory flow
External shortage
17. 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
Properties of inventory
Initial phase of inventory flow
Reasons why inventory exists
18. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Inventory service cost
Demands
Contraints
Major components of inventory carrying cost
19. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Functional classifications
Inventory service cost
Inventory risk cost
20. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Functional factors to explain why inventory exists
Properties of inventory
The categorization of inventory by the purpose that it serves
Problems become more complex
21. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Major properties of inventory
Uncertainty Factors
Costs
How are inventory problems classified
22. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Less inventory
Driving force behind the flow
Type of demand
23. Supplies - raw materials - in-processed goods - finished goods
Inventory management
Different departments in a firm
Functional classifications
Types of inventory
24. 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)
Stock out costs
Driving force behind the flow
Inventory service cost
Reasons why inventory exists
25. As you move up in the supply chain...
Repetiveness
Type of lead time
Problems become more complex
Types of inventory costs
26. Supplies - raw materials - in process goods - and finished goods
Problems become more complex
Cost accumulation
Major components of inventory carrying cost
Basic types of inventory
27. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Less inventory
Working stock (cycle stock)
Retailers - wholesalers - and distributors
Initial phase of inventory flow
28. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Storage space costs
Functional factors to explain why inventory exists
Hurdle rate
Classifying inventory problems
29. Constant vs variable
Type of inventory system
Growing companies
Type of lead time
Inventory carrying cost
30. 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 inventory system
Capital costs (opportunity costs)
Inventory management
Major properties of inventory
31. 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
Properties of inventory
Demands
Basic types of inventory
Replenishments
32. Gives firms a competitive advantage due to lower costs and greater flexibility
Costs
Capital cost
Type of lead time
Less inventory
33. 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
Costs
Functional classifications
Storage space costs
Inventory holding costs
34. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Inventory service cost
Second phase
Classification of Inventory item
Economic Factors
35. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Inventory
Storage space
Repetiveness
Types of inventory costs
36. One firms finished goods may be another firms supplies or raw materials
Replenishments
Storage space costs
Driving force behind the flow
Classification of Inventory item
37. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
The categorization of inventory by the purpose that it serves
Retailers - wholesalers - and distributors
Inventory risk cost
38. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Problems become more complex
Inventory flow
Functional classifications
Finished Goods Inventory
39. Those cost that vary with the amount of inventory in the short run
Storage space
The categorization of inventory by reasons for its existence
Retailers - wholesalers - and distributors
Hurdle rate
40. 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
Discontinuity Factor
Basic types of inventory
Properties of inventory
Anticipation stock (seasonal stock)
41. Capital costs - storage space costs - inventory service cost - inventory risk cost
Inventory carrying cost
Major components of inventory carrying cost
Economic Factors
Internal shortage
42. Often short on cash because what little they have they devote to growth
Purchase costs
Additional phases
Supplies inventory
Growing companies
43. Display inventory carried to increase product visibility stimulate demand
Goals of inventory management
Functional classifications
Inventory/materials manager
Psychic stock
44. 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
Raw Materials Inventory
Inventory flow
Goals of inventory management
Functional factors to explain why inventory exists
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
Raw Materials Inventory
Type of demand
In-Proccess Goods
Sub goals of inventory management
46. 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 lead time
Inventory service cost
Responsibility
Cost accumulation
47. Often everybody's concern - but nones responsibility
Type of inventory system
Onventory management
Inventory management
Stock out costs
48. Internal vs external
Inventory management
Inventory management
Source of supply
Types of inventory
49. Demands - replenishments - constraints - and costs
Type of lead time
Major properties of inventory
Manufacturers
Working stock (cycle stock)
50. Constant vs variable - independent vs dependent
The categorization of inventory by the purpose that it serves
Classifying inventory problems
Type of demand
Inventory