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






2. 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






3. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






4. Associated insurance cost - associated taxes






5. 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






6. Have most complex and difficult inventory problems






7. 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






8. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)






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






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






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






12. 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






13. 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)






14. 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






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)






16. Demands - replenishments - constraints - and costs






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






18. 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






19. Minimum rate of return expected on new investments






20. 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)






21. Customers demand for finished goods






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






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






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






25. Perpetual vs periodic






26. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)






27. 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






28. Capital costs - storage space costs - inventory service cost - inventory risk cost






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






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






31. 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






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






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






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






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






36. Display inventory carried to increase product visibility stimulate demand






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






38. Constant vs variable






39. Often everybody's concern - but nones responsibility






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






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






42. Allows one part of the system to be isolated from the next






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






44. 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






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






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






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






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






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






50. 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