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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. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Costs
Sub goals of inventory management
Source of supply
Additional phases
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
Time Factor
Stock out costs
Inventory service cost
The categorization of inventory by the purpose that it serves
3. 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
Pipeline stock
Costs
Benefits of inventory/material manager
Inventory holding costs
4. 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
Second phase
Inventory flow
Initial phase of inventory flow
Types of inventory costs
5. Supplies - raw materials - in-processed goods - finished goods
Types of inventory
Storage space costs
Inventory service cost
Repetiveness
6. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
Problems become more complex
Major components of inventory carrying cost
Basic types of inventory
7. 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
Anticipation stock (seasonal stock)
Inventory risk cost
Economic Factors
Responsibility
8. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Capital costs (opportunity costs)
Basic types of inventory
Type of demand
Order cost or set up cost
9. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Classification of Inventory item
Stock out costs
Problems become more complex
10. 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
Stock out costs
Inventory/materials manager
Benefits of inventory/material manager
Material costs
11. Those cost that vary with the amount of inventory in the short run
Types of inventory costs
Storage space
Psychic stock
Stock out costs
12. 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)
Major components of inventory carrying cost
Contraints
Costs
Different departments in a firm
13. 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
Order cost or set up cost
Internal shortage
Inventory
Capital cost
14. 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
The categorization of inventory by reasons for its existence
Capital cost
Second phase
Manufacturers
15. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Economic Factors
The categorization of inventory by the purpose that it serves
Third phase
Capital cost
16. 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
Raw Materials Inventory
Inventory carrying cost
Sub goals of inventory management
Types of inventory
17. Have most complex and difficult inventory problems
Stock out costs
Benefits of inventory/material manager
Time Factor
Manufacturers
18. 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
Retailers - wholesalers - and distributors
External shortage
Hurdle rate
Discontinuity Factor
19. Demands - replenishments - constraints - and costs
Major properties of inventory
In-Proccess Goods
Third phase
The categorization of inventory by reasons for its existence
20. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Finished Goods Inventory
Growing companies
Raw Materials Inventory
Storage space costs
21. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Cost accumulation
Different departments in a firm
Consumption
Initial phase of inventory flow
22. Display inventory carried to increase product visibility stimulate demand
Psychic stock
Cost accumulation
Decoupling stock
External shortage
23. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Third phase
Internal shortage
Source of supply
24. Constant vs variable
Benefits of inventory/material manager
Type of lead time
Working stock (cycle stock)
Goals of inventory management
25. Internal vs external
Decoupling stock
Source of supply
Safety stock (buffer stock)
Repetiveness
26. Single order vs repetitive order
Uncertainty Factors
The categorization of inventory by reasons for its existence
Repetiveness
Goals of inventory management
27. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Economic Factors
Storage space costs
The categorization of inventory by the purpose that it serves
Manufacturers
28. 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
Cost accumulation
Inventory management
Demands
Functional classifications
29. Cost of obsolescence - damage cost - shrinkage (theft) cost
Reasons why inventory exists
Problems become more complex
Material costs
Inventory risk cost
30. 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
Finished Goods Inventory
Costs
Pipeline stock
Inventory management
31. 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)
Inventory flow
Inventory service cost
Reasons why inventory exists
Psychic stock
32. Time factor - discontinuity factor - uncertainty factor - economy factor
Storage space costs
Functional factors to explain why inventory exists
In-Proccess Goods
Working stock (cycle stock)
33. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Consumption
Inventory management
Additional phases
34. Often short on cash because what little they have they devote to growth
Internal shortage
Demands
Growing companies
Working stock (cycle stock)
35. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Major components of inventory carrying cost
Driving force behind the flow
Economic Factors
Major properties of inventory
36. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Responsibility
Benefits of inventory/material manager
Inventory management
Manufacturers
37. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Working stock (cycle stock)
Psychic stock
Driving force behind the flow
Inventory risk cost
38. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Consumption
Capital costs (opportunity costs)
Supplies inventory
39. 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
Different departments in a firm
The categorization of inventory by the purpose that it serves
Demands
Responsibility
40. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Repetiveness
Working stock (cycle stock)
Additional phases
Retailers - wholesalers - and distributors
41. 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
Functional factors to explain why inventory exists
Psychic stock
Raw Materials Inventory
Sub goals of inventory management
42. Often everybody's concern - but nones responsibility
Onventory management
Supplies inventory
Raw Materials Inventory
Additional phases
43. Time factor - discontinuity factor - uncertainty factor - and economic factor
The categorization of inventory by reasons for its existence
Less inventory
Hurdle rate
Replenishments
44. Supplies - raw materials - in process goods - and finished goods
Properties of inventory
Safety stock (buffer stock)
Basic types of inventory
Anticipation stock (seasonal stock)
45. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Types of inventory costs
Properties of inventory
In-Proccess Goods
Material costs
46. Customers demand for finished goods
The categorization of inventory by reasons for its existence
Onventory management
Driving force behind the flow
Different departments in a firm
47. Involves controlling the flow of materials into and out of a system - a big timing problem
Cost accumulation
Finished Goods Inventory
Inventory management
Decoupling stock
48. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
Storage space costs
Inventory/materials manager
Basic types of inventory
49. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Internal shortage
Supplies inventory
Third phase
Driving force behind the flow
50. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Order cost or set up cost
Problems become more complex
Inventory management