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. 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)






2. Demands - replenishments - - constraints - and costs






3. Constant vs variable






4. 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






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






6. Display inventory carried to increase product visibility stimulate demand






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






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






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






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






11. 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






12. 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






13. Internal vs external






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






15. Time factor - discontinuity factor - uncertainty factor - economy factor






16. 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






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






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






19. 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)






20. Customers demand for finished goods






21. 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






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






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






24. Single order vs repetitive order






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






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






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






28. Sacrificed in exchange for buying needed machines






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






30. 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






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






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






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






34. Demands - replenishments - constraints - and costs






35. Perpetual vs periodic






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






37. Associated insurance cost - associated taxes






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






39. Minimum rate of return expected on new investments






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






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






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






43. 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






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






45. Have most complex and difficult inventory problems






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






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






48. 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






49. Usually a firm's largest expenditure






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