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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. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Consumption
The categorization of inventory by reasons for its existence
Source of supply
Classifying inventory problems
2. Capital costs - storage space costs - inventory service cost - inventory risk cost
Discontinuity Factor
Driving force behind the flow
Economic Factors
Major components of inventory carrying cost
3. 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
Internal shortage
Anticipation stock (seasonal stock)
Working stock (cycle stock)
The categorization of inventory by reasons for its existence
4. One firms finished goods may be another firms supplies or raw materials
The categorization of inventory by the purpose that it serves
Classification of Inventory item
Driving force behind the flow
Stock out costs
5. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Costs
Functional classifications
Replenishments
Finished Goods Inventory
6. Associated insurance cost - associated taxes
Inventory service cost
Safety stock (buffer stock)
Growing companies
Types of inventory costs
7. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Order cost or set up cost
In-Proccess Goods
Storage space
Different departments in a firm
8. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Major components of inventory carrying cost
Classifying inventory problems
Capital costs (opportunity costs)
Storage space costs
9. As you move up in the supply chain...
Source of supply
Manufacturers
Major properties of inventory
Problems become more complex
10. Sacrificed in exchange for buying needed machines
Storage space
Functional factors to explain why inventory exists
Purchasing discounts
Type of demand
11. Time factor - discontinuity factor - uncertainty factor - and economic factor
Responsibility
The categorization of inventory by reasons for its existence
Uncertainty Factors
Capital cost
12. 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
Functional classifications
Demands
Initial phase of inventory flow
Raw Materials Inventory
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
Initial phase of inventory flow
Raw Materials Inventory
Pipeline stock
Inventory risk cost
14. Cost of obsolescence - damage cost - shrinkage (theft) cost
Properties of inventory
Inventory holding costs
Discontinuity Factor
Inventory risk cost
15. 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)
Storage space costs
Purchase costs
Functional classifications
Material costs
16. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Reasons why inventory exists
Stock out costs
Purchasing discounts
Working stock (cycle stock)
17. Constant vs variable
Type of lead time
Pipeline stock
External shortage
Type of inventory system
18. Often short on cash because what little they have they devote to growth
Growing companies
Source of supply
Purchasing discounts
Anticipation stock (seasonal stock)
19. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Classification of Inventory item
Retailers - wholesalers - and distributors
The categorization of inventory by the purpose that it serves
Internal shortage
20. Run out of material or supplies - production stopping - deadlines not met
Inventory/materials manager
Internal shortage
Growing companies
Decoupling stock
21. A customers order cannot be met - backorder costs - present profit loss - future profit loss
The categorization of inventory by reasons for its existence
External shortage
Consumption
Inventory service cost
22. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
Inventory service cost
Basic types of inventory
Initial phase of inventory flow
23. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Onventory management
Goals of inventory management
Functional factors to explain why inventory exists
Additional phases
24. 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
Major components of inventory carrying cost
Pipeline stock
Inventory flow
Onventory management
25. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Capital cost
Uncertainty Factors
Functional factors to explain why inventory exists
Economic Factors
26. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory service cost
Raw Materials Inventory
Inventory risk cost
Inventory flow
27. 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
Manufacturers
Type of inventory system
Type of lead time
28. Constant vs variable - independent vs dependent
Type of demand
Anticipation stock (seasonal stock)
Source of supply
Economic Factors
29. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Inventory risk cost
Inventory flow
Third phase
Hurdle rate
30. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Costs
Supplies inventory
Raw Materials Inventory
Type of lead time
31. Demands - replenishments - constraints - and costs
Different departments in a firm
Inventory holding costs
Major properties of inventory
Growing companies
32. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Major properties of inventory
Inventory risk cost
Type of demand
Different departments in a firm
33. 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
Storage space
Order cost or set up cost
Sub goals of inventory management
Decoupling stock
34. It takes time to make a product - but consumers want them on demand
Time Factor
Capital cost
Additional phases
Less inventory
35. 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
Benefits of inventory/material manager
Inventory
Time Factor
Raw Materials 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
Growing companies
Capital cost
Stock out costs
The categorization of inventory by the purpose that it serves
37. Supplies - raw materials - in-processed goods - finished goods
Anticipation stock (seasonal stock)
Capital costs (opportunity costs)
Types of inventory
Inventory holding costs
38. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Discontinuity Factor
Material costs
Costs
39. Those cost that vary with the amount of inventory in the short run
Classifying inventory problems
Storage space
Third phase
Psychic stock
40. Internal vs external
Anticipation stock (seasonal stock)
Discontinuity Factor
Source of supply
Properties of inventory
41. 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
Finished Goods Inventory
How are inventory problems classified
Economic Factors
42. Supplies - raw materials - in process goods - and finished goods
Inventory management
Basic types of inventory
Storage space costs
Contraints
43. 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
Reasons why inventory exists
Classification of Inventory item
Inventory/materials manager
Inventory holding costs
44. Customers demand for finished goods
Type of lead time
Source of supply
Driving force behind the flow
Classification of Inventory item
45. 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)
Inventory service cost
Hurdle rate
The categorization of inventory by reasons for its existence
Storage space
46. 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
Capital cost
Inventory service cost
Sub goals of inventory management
Responsibility
47. 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
Basic types of inventory
Inventory carrying cost
Demands
Capital costs (opportunity costs)
48. 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
Classifying inventory problems
Inventory risk cost
Initial phase of inventory flow
Psychic stock
49. Minimum rate of return expected on new investments
Hurdle rate
Driving force behind the flow
Inventory/materials manager
Demands
50. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Types of inventory
Inventory risk cost
Functional classifications
Pipeline stock