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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. 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)
Costs
Onventory management
Hurdle rate
Finished Goods Inventory
2. Constant vs variable - independent vs dependent
Contraints
Type of demand
Growing companies
Cost accumulation
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
Inventory holding costs
Cost accumulation
Consumption
Initial phase of inventory flow
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
Inventory/materials manager
Inventory management
Working stock (cycle stock)
Consumption
5. It takes time to make a product - but consumers want them on demand
Inventory risk cost
Reasons why inventory exists
Benefits of inventory/material manager
Time Factor
6. Time factor - discontinuity factor - uncertainty factor - economy factor
Additional phases
Functional factors to explain why inventory exists
Types of inventory costs
Time Factor
7. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Initial phase of inventory flow
Repetiveness
Different departments in a firm
Raw Materials Inventory
8. Customers demand for finished goods
Driving force behind the flow
Costs
Responsibility
Reasons why inventory exists
9. Demands - replenishments - - constraints - and costs
Properties of inventory
Stock out costs
Finished Goods Inventory
Inventory risk cost
10. Gives firms a competitive advantage due to lower costs and greater flexibility
Hurdle rate
Less inventory
Inventory service cost
Classifying inventory problems
11. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Onventory management
Driving force behind the flow
Order cost or set up cost
Decoupling stock
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
Discontinuity Factor
Onventory management
Reasons why inventory exists
Repetiveness
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
Capital cost
Stock out costs
Storage space
Onventory management
14. Time factor - discontinuity factor - uncertainty factor - and economic factor
Inventory service cost
The categorization of inventory by reasons for its existence
Problems become more complex
Properties of inventory
15. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Replenishments
Cost accumulation
Purchasing discounts
Functional classifications
16. As you move up in the supply chain...
Material costs
Classifying inventory problems
Major components of inventory carrying cost
Problems become more complex
17. Constant vs variable
Inventory management
Type of lead time
Additional phases
Storage space
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
Pipeline stock
Reasons why inventory exists
Types of inventory costs
Purchase costs
19. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Less inventory
Inventory management
Discontinuity Factor
Retailers - wholesalers - and distributors
20. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Storage space
Economic Factors
Inventory
21. Single order vs repetitive order
Source of supply
Repetiveness
Psychic stock
Inventory carrying cost
22. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Finished Goods Inventory
Hurdle rate
Purchasing discounts
Source of supply
23. Allows one part of the system to be isolated from the next
Capital costs (opportunity costs)
Decoupling stock
Replenishments
Economic Factors
24. Demands - replenishments - constraints - and costs
How are inventory problems classified
Functional classifications
Uncertainty Factors
Major properties of inventory
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
Functional factors to explain why inventory exists
Classifying inventory problems
Inventory holding costs
Working stock (cycle stock)
26. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Purchase costs
Storage space
Storage space costs
Types of inventory costs
27. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Replenishments
Additional phases
Major properties of inventory
Less 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
Inventory management
Internal shortage
Capital cost
Safety stock (buffer stock)
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
Raw Materials Inventory
Initial phase of inventory flow
Safety stock (buffer stock)
Inventory management
30. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Order cost or set up cost
Major components of inventory carrying cost
Inventory holding costs
31. Involves controlling the flow of materials into and out of a system - a big timing problem
Driving force behind the flow
Inventory management
Classifying inventory problems
Demands
32. Run out of material or supplies - production stopping - deadlines not met
Anticipation stock (seasonal stock)
Internal shortage
Contraints
Time Factor
33. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Supplies inventory
Uncertainty Factors
Psychic stock
Order cost or set up cost
34. One firms finished goods may be another firms supplies or raw materials
Types of inventory
Decoupling stock
Classification of Inventory item
Discontinuity Factor
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)
Second phase
Purchase costs
Reasons why inventory exists
Inventory service cost
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
Manufacturers
Inventory flow
Pipeline stock
Inventory service cost
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
Second phase
Responsibility
Properties of inventory
Capital cost
38. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Anticipation stock (seasonal stock)
Classification of Inventory item
Classifying inventory problems
Types of inventory
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
Purchase costs
Initial phase of inventory flow
Types of inventory costs
Types of inventory
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
Inventory service cost
Inventory carrying cost
Type of inventory system
Retailers - wholesalers - and distributors
41. Associated insurance cost - associated taxes
Repetiveness
Inventory
The categorization of inventory by reasons for its existence
Inventory service cost
42. Sacrificed in exchange for buying needed machines
Inventory service cost
Different departments in a firm
Basic types of inventory
Purchasing discounts
43. Supplies - raw materials - in-processed goods - finished goods
Inventory flow
Types of inventory
Types of inventory costs
Working stock (cycle stock)
44. Minimum rate of return expected on new investments
Hurdle rate
Inventory carrying cost
Inventory service cost
Capital cost
45. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Uncertainty Factors
Inventory service cost
Economic Factors
Working stock (cycle stock)
46. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Inventory/materials manager
Properties of inventory
Functional classifications
Different departments in a firm
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
Inventory management
Different departments in a firm
Inventory
Inventory management
48. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Purchase costs
Different departments in a firm
How are inventory problems classified
Uncertainty Factors
49. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Goals of inventory management
Storage space
Source of supply
Retailers - wholesalers - and distributors
50. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Safety stock (buffer stock)
Cost accumulation
Time Factor
Inventory service cost