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. 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






2. 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






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






4. Have most complex and difficult inventory problems






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






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






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






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






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






10. 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






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






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






13. 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)






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






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






16. Customers demand for finished goods






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






18. Often everybody's concern - but nones responsibility






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






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






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






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






23. Gives firms a competitive advantage due to lower costs and greater flexibility






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






25. 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






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






27. Perpetual vs periodic






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






29. 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)






30. Demands - replenishments - - constraints - and costs






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






32. 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






33. Constant vs variable






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






35. Usually a firm's largest expenditure






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






37. 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






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






39. Time factor - discontinuity factor - uncertainty factor - economy factor






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. Single order vs repetitive order






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






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






44. Associated insurance cost - associated taxes






45. Display inventory carried to increase product visibility stimulate demand






46. 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






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






48. Sacrificed in exchange for buying needed machines






49. 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






50. Demands - replenishments - constraints - and costs