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






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






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






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






5. 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






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






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






8. Often everybody's concern - but nones responsibility






9. Customers demand for finished goods






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






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






12. Involves controlling the flow of materials into and out of a system - a big timing problem






13. Minimum rate of return expected on new investments






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






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






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






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






18. 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






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






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






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






22. 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






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






24. Usually a firm's largest expenditure






25. Sacrificed in exchange for buying needed machines






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






27. 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






28. 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






29. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability






30. Constant vs variable






31. Associated insurance cost - associated taxes






32. Display inventory carried to increase product visibility stimulate demand






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






34. Supplies - raw materials - in-processed goods - finished goods






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






36. 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






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






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






39. 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)






40. 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






41. Demands - replenishments - - constraints - and costs






42. 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)






43. 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






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






45. 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






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






47. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another






48. Single order vs repetitive order






49. 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






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