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. Usually a firm's largest expenditure






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






3. Internal vs external






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






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






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






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






8. Gives firms a competitive advantage due to lower costs and greater flexibility






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






10. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






11. Single order vs repetitive order






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






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






14. 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)






15. Often everybody's concern - but nones responsibility






16. Associated insurance cost - associated taxes






17. 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)






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






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






20. 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






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






22. Perpetual vs periodic






23. 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






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






25. Demands - replenishments - constraints - and costs






26. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






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






30. Sacrificed in exchange for buying needed machines






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






32. 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






33. 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






34. 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)






35. 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






36. 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






37. Demands - replenishments - - constraints - and costs






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






39. Constant vs variable - independent vs dependent






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






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






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






43. 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






44. 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)






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






46. Constant vs variable






47. 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






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






49. 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






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