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






2. As you move up in the supply chain...






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






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






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






6. 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)






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






8. 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






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






10. Internal vs external






11. 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






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






13. Single order vs repetitive order






14. Constant vs variable - independent vs dependent






15. Often everybody's concern - but nones responsibility






16. Demands - replenishments - constraints - and costs






17. 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






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






19. 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






20. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






21. Have most complex and difficult inventory problems






22. 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






23. 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






24. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost






25. 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






26. 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)






27. Usually a firm's largest expenditure






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






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






30. 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)






31. 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






32. Constant vs variable






33. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply






34. Demands - replenishments - - constraints - and costs






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






36. 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






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






38. Display inventory carried to increase product visibility stimulate demand






39. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house






40. Perpetual vs periodic






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






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






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






44. Final product - available for storage - distribution - or sale; isolate the customer from the producer






45. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost






46. Cost of obsolescence - damage cost - shrinkage (theft) cost






47. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






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






49. Those cost that vary with the amount of inventory in the short run






50. Customers demand for finished goods