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






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






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






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






5. Constant vs variable - independent vs dependent






6. Single order vs repetitive order






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






8. 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






9. 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






10. 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






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






12. 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






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






14. 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






15. Display inventory carried to increase product visibility stimulate demand






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






17. 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






18. 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






19. 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)






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






21. 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






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






23. 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






24. Time factor - discontinuity factor - uncertainty factor - economy factor






25. Customers demand for finished goods






26. Demands - replenishments - constraints - and costs






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






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






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






30. Constant vs variable






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






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






33. 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






34. Often everybody's concern - but nones responsibility






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






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






37. 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)






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






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






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






41. Sacrificed in exchange for buying needed machines






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






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






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






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






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






48. Perpetual vs periodic






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






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