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. 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






2. Perpetual vs periodic






3. Associated insurance cost - associated taxes






4. 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






5. Often everybody's concern - but nones responsibility






6. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






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






8. 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






9. Minimum rate of return expected on new investments






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






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






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






13. Time factor - discontinuity factor - uncertainty factor - economy factor






14. Usually a firm's largest expenditure






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






16. 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






17. 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






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






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






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






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






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






24. 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






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






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






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






28. Constant vs variable






29. 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)






30. 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)






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






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






33. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)






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






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






36. 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






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






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






39. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system






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






41. 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






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






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






44. Demands - replenishments - constraints - and costs






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






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






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






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






49. Sacrificed in exchange for buying needed machines






50. Have most complex and difficult inventory problems