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






2. 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)






3. 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






4. Often divided up over all departments each with its own agenda: purchasing-raw materials and purchased items - manufacturing-work in progress - marketing-finished goods and distribution - it is usually best to give responsibility for all inventory






5. Perpetual vs periodic






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






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






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






9. 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






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






11. Demands - replenishments - constraints - and costs






12. 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






13. 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






14. 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






15. Demands - replenishments - - constraints - and costs






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






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






18. Constant vs variable - independent vs dependent






19. Associated insurance cost - associated taxes






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






21. Display inventory carried to increase product visibility stimulate demand






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






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






24. 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






25. 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)






26. 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






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






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






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






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






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






32. 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






33. 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)






34. Have most complex and difficult inventory problems






35. Minimum rate of return expected on new investments






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






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






38. 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






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






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






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






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






43. 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






44. Customers demand for finished goods






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






46. 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)






47. Time factor - discontinuity factor - uncertainty factor - economy factor






48. Sacrificed in exchange for buying needed machines






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






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