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. Associated insurance cost - associated taxes






2. Constant vs variable - independent vs dependent






3. 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






4. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






5. Time factor - discontinuity factor - uncertainty factor - economy factor






6. 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)






7. 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






8. Demands - replenishments - - constraints - and costs






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






10. Have most complex and difficult inventory problems






11. 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






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






13. Sacrificed in exchange for buying needed machines






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






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






16. 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






17. Constant vs variable






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






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






20. 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






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






22. 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)






23. Minimum rate of return expected on new investments






24. Usually a firm's largest expenditure






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






26. 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






27. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)






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






29. Often everybody's concern - but nones responsibility






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






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






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






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






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






35. Single order vs repetitive order






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






37. 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)






38. 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






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






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






41. 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






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






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






44. 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






45. Demands - replenishments - constraints - and costs






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






47. Customers demand for finished goods






48. 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)






49. 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






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