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Test your basic knowledge |
Inventory Management
Start Test
Study First
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. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Hurdle rate
Finished Goods Inventory
How are inventory problems classified
The categorization of inventory by reasons for its existence
2. Often everybody's concern - but nones responsibility
Initial phase of inventory flow
Replenishments
Onventory management
Cost accumulation
3. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Decoupling stock
Anticipation stock (seasonal stock)
Functional classifications
Discontinuity Factor
4. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Raw Materials Inventory
Retailers - wholesalers - and distributors
Inventory
Inventory risk cost
5. Demands - replenishments - - constraints - and costs
Third phase
Internal shortage
Contraints
Properties of inventory
6. 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
Basic types of inventory
Classification of Inventory item
Anticipation stock (seasonal stock)
Purchase costs
7. Minimum rate of return expected on new investments
Hurdle rate
Costs
Economic Factors
Classification of Inventory item
8. 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
Growing companies
Discontinuity Factor
Demands
Additional phases
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)
Properties of inventory
Source of supply
Purchase costs
Cost accumulation
10. Sacrificed in exchange for buying needed machines
Capital costs (opportunity costs)
Purchasing discounts
Inventory management
Major properties of inventory
11. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Repetiveness
Replenishments
Inventory management
Internal shortage
12. 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)
Classification of Inventory item
Inventory service cost
Inventory risk cost
Responsibility
13. 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
Cost accumulation
Inventory management
Inventory risk cost
Inventory flow
14. 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
Growing companies
Purchasing discounts
Problems become more complex
Sub goals of inventory management
15. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Major properties of inventory
Safety stock (buffer stock)
Purchase costs
Discontinuity Factor
16. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
The categorization of inventory by the purpose that it serves
Sub goals of inventory management
Purchasing discounts
Classifying inventory problems
17. Associated insurance cost - associated taxes
Inventory service cost
Major properties of inventory
Capital cost
Working stock (cycle stock)
18. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Benefits of inventory/material manager
Types of inventory costs
Inventory risk cost
Stock out costs
19. 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
Benefits of inventory/material manager
Additional phases
Types of inventory costs
Capital costs (opportunity costs)
20. Demands - replenishments - constraints - and costs
Major properties of inventory
Reasons why inventory exists
Inventory management
Inventory service cost
21. 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
Basic types of inventory
Inventory management
Costs
Second phase
22. Capital costs - storage space costs - inventory service cost - inventory risk cost
Inventory carrying cost
Major components of inventory carrying cost
Functional classifications
Onventory management
23. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Classifying inventory problems
Additional phases
Replenishments
Type of lead time
24. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Inventory service cost
Supplies inventory
Less inventory
25. Single order vs repetitive order
Economic Factors
Source of supply
Properties of inventory
Repetiveness
26. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Inventory management
Costs
Material costs
Capital cost
27. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Uncertainty Factors
Economic Factors
Decoupling stock
Internal shortage
28. Time factor - discontinuity factor - uncertainty factor - and economic factor
Consumption
Initial phase of inventory flow
Functional classifications
The categorization of inventory by reasons for its existence
29. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Demands
Uncertainty Factors
Contraints
Type of demand
30. 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
Inventory management
The categorization of inventory by reasons for its existence
Anticipation stock (seasonal stock)
Raw Materials Inventory
31. 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)
External shortage
Major properties of inventory
Costs
Supplies inventory
32. Usually a firm's largest expenditure
Second phase
Major properties of inventory
Working stock (cycle stock)
Material costs
33. Supplies - raw materials - in-processed goods - finished goods
Inventory risk cost
Types of inventory
Driving force behind the flow
Purchase costs
34. 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
External shortage
Second phase
Inventory
Repetiveness
35. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Working stock (cycle stock)
Functional factors to explain why inventory exists
Consumption
Psychic stock
36. 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
Inventory service cost
Capital cost
Consumption
Inventory/materials manager
37. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Onventory management
Inventory risk cost
Storage space costs
38. 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
Time Factor
Safety stock (buffer stock)
Demands
Replenishments
39. 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
Initial phase of inventory flow
Stock out costs
Growing companies
Less inventory
40. 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
Third phase
Initial phase of inventory flow
Stock out costs
Classifying inventory problems
41. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Types of inventory
Inventory/materials manager
Decoupling stock
42. Often short on cash because what little they have they devote to growth
Raw Materials Inventory
Major components of inventory carrying cost
Classification of Inventory item
Growing companies
43. Cost of obsolescence - damage cost - shrinkage (theft) cost
Goals of inventory management
Inventory risk cost
Inventory service cost
Inventory flow
44. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Additional phases
Order cost or set up cost
Major components of inventory carrying cost
In-Proccess Goods
45. Constant vs variable
Initial phase of inventory flow
Retailers - wholesalers - and distributors
Type of lead time
Storage space
46. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Purchase costs
Consumption
Internal shortage
Demands
47. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Inventory management
Contraints
Type of inventory system
48. 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
Retailers - wholesalers - and distributors
In-Proccess Goods
Inventory carrying cost
Onventory management
49. Run out of material or supplies - production stopping - deadlines not met
Major properties of inventory
Second phase
Internal shortage
Driving force behind the flow
50. Constant vs variable - independent vs dependent
Inventory risk cost
Type of demand
Consumption
Storage space costs