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Test your basic knowledge |
Inventory Management
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Study First
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. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Psychic stock
Inventory carrying cost
Inventory risk cost
2. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory holding costs
Consumption
Inventory risk cost
In-Proccess Goods
3. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Time Factor
Goals of inventory management
External shortage
Type of inventory system
4. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Third phase
Initial phase of inventory flow
Supplies inventory
Second phase
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
Repetiveness
Source of supply
Reasons why inventory exists
Initial phase of inventory flow
6. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Purchase costs
Supplies inventory
Inventory carrying cost
Storage space costs
7. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Inventory service cost
Sub goals of inventory management
Additional phases
Psychic stock
8. Run out of material or supplies - production stopping - deadlines not met
Functional factors to explain why inventory exists
Anticipation stock (seasonal stock)
Basic types of inventory
Internal shortage
9. 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
Purchasing discounts
Finished Goods Inventory
Sub goals of inventory management
Goals of inventory management
10. 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
Uncertainty Factors
Reasons why inventory exists
Inventory holding costs
Inventory service cost
11. 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)
Functional factors to explain why inventory exists
Finished Goods Inventory
Costs
Inventory service cost
12. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Costs
The categorization of inventory by the purpose that it serves
Type of inventory system
Functional classifications
13. Those cost that vary with the amount of inventory in the short run
Second phase
Storage space
Properties of inventory
Different departments in a firm
14. Often short on cash because what little they have they devote to growth
Classification of Inventory item
Growing companies
Reasons why inventory exists
Replenishments
15. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Anticipation stock (seasonal stock)
Types of inventory
Economic Factors
Third phase
16. Usually a firm's largest expenditure
Functional factors to explain why inventory exists
Types of inventory
Additional phases
Material costs
17. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Growing companies
The categorization of inventory by the purpose that it serves
Discontinuity Factor
18. 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
Repetiveness
Replenishments
Major components of inventory carrying cost
Pipeline stock
19. Have most complex and difficult inventory problems
Contraints
Purchasing discounts
Purchase costs
Manufacturers
20. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory risk cost
Inventory management
Hurdle rate
Type of inventory system
21. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Purchase costs
Inventory
Reasons why inventory exists
How are inventory problems classified
22. One firms finished goods may be another firms supplies or raw materials
Consumption
Classification of Inventory item
Basic types of inventory
Responsibility
23. 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
Properties of inventory
Major properties of inventory
Second phase
Classification of Inventory item
24. Allows one part of the system to be isolated from the next
Decoupling stock
Inventory flow
In-Proccess Goods
Finished Goods Inventory
25. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Supplies inventory
Inventory management
Different departments in a firm
26. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Working stock (cycle stock)
Inventory risk cost
Type of demand
27. Demands - replenishments - constraints - and costs
Additional phases
Major properties of inventory
Purchase costs
Driving force behind the flow
28. Perpetual vs periodic
Hurdle rate
Type of inventory system
Inventory service cost
Second phase
29. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Inventory management
Repetiveness
Types of inventory
30. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Storage space
Contraints
Inventory service cost
Benefits of inventory/material manager
31. Minimum rate of return expected on new investments
Types of inventory costs
Pipeline stock
Hurdle rate
Sub goals of inventory management
32. Time factor - discontinuity factor - uncertainty factor - economy factor
Functional factors to explain why inventory exists
Demands
Classification of Inventory item
Inventory management
33. Demands - replenishments - - constraints - and costs
Safety stock (buffer stock)
Properties of inventory
Retailers - wholesalers - and distributors
Onventory management
34. Associated insurance cost - associated taxes
Inventory management
The categorization of inventory by reasons for its existence
Decoupling stock
Inventory service cost
35. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Costs
Safety stock (buffer stock)
Goals of inventory management
Working stock (cycle stock)
36. 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
Second phase
Functional classifications
Discontinuity Factor
Cost accumulation
37. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Finished Goods Inventory
Functional classifications
Purchasing discounts
Replenishments
38. Constant vs variable
Type of lead time
Reasons why inventory exists
Basic types of inventory
Sub goals of inventory management
39. Internal vs external
Uncertainty Factors
Capital costs (opportunity costs)
Source of supply
Inventory service cost
40. Sacrificed in exchange for buying needed machines
Purchasing discounts
Problems become more complex
Supplies inventory
Additional phases
41. 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
Inventory holding costs
Inventory management
Classifying inventory problems
Capital costs (opportunity costs)
42. 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
Psychic stock
Stock out costs
The categorization of inventory by the purpose that it serves
Major properties of inventory
43. 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
Finished Goods Inventory
Manufacturers
Inventory flow
Anticipation stock (seasonal stock)
44. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Decoupling stock
Safety stock (buffer stock)
Onventory management
Inventory holding costs
45. Involves controlling the flow of materials into and out of a system - a big timing problem
Source of supply
Raw Materials Inventory
Inventory management
Basic types of inventory
46. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Types of inventory
External shortage
Classifying inventory problems
Major properties of inventory
47. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Responsibility
Economic Factors
Types of inventory costs
Internal shortage
48. 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)
Raw Materials Inventory
Purchase costs
Third phase
Different departments in a firm
49. Cost of obsolescence - damage cost - shrinkage (theft) cost
Inventory risk cost
Discontinuity Factor
The categorization of inventory by reasons for its existence
Goals of inventory management
50. 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)
Replenishments
Time Factor
Inventory service cost
Economic Factors