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. 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






3. 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)






4. 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






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






6. 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






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






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






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






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






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






12. 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






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






14. Single order vs repetitive order






15. 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






16. 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






17. Internal vs external






18. 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






19. Often everybody's concern - but nones responsibility






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






21. Display inventory carried to increase product visibility stimulate demand






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






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






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






25. 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)






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






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






28. 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)






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






30. Demands - replenishments - - constraints - and costs






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






32. Constant vs variable - independent vs dependent






33. Minimum rate of return expected on new investments






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






35. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions






36. 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






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






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






39. Customers demand for finished goods






40. 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






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






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






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






44. Demands - replenishments - constraints - and costs






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






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






47. Associated insurance cost - associated taxes






48. 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






49. 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






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