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






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






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






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






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






6. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






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






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






9. 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)






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






11. Usually a firm's largest expenditure






12. Constant vs variable - independent vs dependent






13. 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






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






15. Often everybody's concern - but nones responsibility






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






17. Time factor - discontinuity factor - uncertainty factor - economy factor






18. 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






19. Demands - replenishments - - constraints - and costs






20. Demands - replenishments - constraints - and costs






21. Have most complex and difficult inventory problems






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






23. 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






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






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






26. 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






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






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






29. Customers demand for finished goods






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






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






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






33. Sacrificed in exchange for buying needed machines






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






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






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






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






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






39. 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






40. It takes time to make a product - but consumers want them on demand






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






42. 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






43. Internal vs external






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






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






46. 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






47. 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






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






49. Display inventory carried to increase product visibility stimulate demand






50. Associated insurance cost - associated taxes