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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. Associated insurance cost - associated taxes
Hurdle rate
Inventory service cost
Inventory risk cost
Cost accumulation
2. Constant vs variable - independent vs dependent
Type of demand
Inventory holding costs
Raw Materials Inventory
Time Factor
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
Supplies inventory
Inventory carrying cost
Responsibility
Reasons why inventory exists
4. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Uncertainty Factors
Different departments in a firm
Inventory management
5. Time factor - discontinuity factor - uncertainty factor - economy factor
Inventory service cost
Classification of Inventory item
Functional factors to explain why inventory exists
Consumption
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)
Source of supply
Purchase costs
Classification of Inventory item
In-Proccess Goods
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
Initial phase of inventory flow
Decoupling stock
Type of lead time
In-Proccess Goods
8. Demands - replenishments - - constraints - and costs
Basic types of inventory
Repetiveness
Properties of inventory
Order cost or set up cost
9. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Inventory management
Storage space costs
External shortage
Finished Goods Inventory
10. Have most complex and difficult inventory problems
Functional factors to explain why inventory exists
Manufacturers
Types of inventory costs
Purchasing discounts
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
Raw Materials Inventory
Replenishments
Types of inventory costs
Inventory carrying cost
12. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
External shortage
Contraints
Functional factors to explain why inventory exists
Different departments in a firm
13. Sacrificed in exchange for buying needed machines
Initial phase of inventory flow
Stock out costs
Purchasing discounts
Retailers - wholesalers - and distributors
14. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
External shortage
Types of inventory
Capital cost
Inventory holding costs
15. Time factor - discontinuity factor - uncertainty factor - and economic factor
Inventory carrying cost
The categorization of inventory by reasons for its existence
Driving force behind the flow
Decoupling stock
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
Raw Materials Inventory
Source of supply
Internal shortage
Capital costs (opportunity costs)
17. Constant vs variable
Inventory management
Second phase
Classification of Inventory item
Type of lead time
18. Run out of material or supplies - production stopping - deadlines not met
Internal shortage
Inventory service cost
Finished Goods Inventory
Order cost or set up cost
19. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Manufacturers
How are inventory problems classified
Types of inventory costs
Functional classifications
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
Inventory flow
Type of demand
Psychic stock
Supplies inventory
21. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Type of inventory system
Raw Materials Inventory
Inventory management
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)
Major components of inventory carrying cost
Source of supply
Third phase
Reasons why inventory exists
23. Minimum rate of return expected on new investments
Hurdle rate
Inventory/materials manager
How are inventory problems classified
The categorization of inventory by the purpose that it serves
24. Usually a firm's largest expenditure
Inventory service cost
Basic types of inventory
Material costs
Sub goals of inventory management
25. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory management
Functional factors to explain why inventory exists
Functional classifications
Cost accumulation
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
Inventory carrying cost
Uncertainty Factors
Inventory service cost
Benefits of inventory/material manager
27. 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
In-Proccess Goods
Stock out costs
Replenishments
28. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Retailers - wholesalers - and distributors
Purchasing discounts
Additional phases
Functional classifications
29. Often everybody's concern - but nones responsibility
Onventory management
Type of demand
Cost accumulation
In-Proccess Goods
30. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Discontinuity Factor
Benefits of inventory/material manager
Classifying inventory problems
Inventory management
31. One firms finished goods may be another firms supplies or raw materials
Inventory/materials manager
Costs
Classification of Inventory item
Capital cost
32. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Driving force behind the flow
The categorization of inventory by the purpose that it serves
Material costs
Storage space
33. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Psychic stock
Time Factor
Safety stock (buffer stock)
Classification of Inventory item
34. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Contraints
Consumption
Functional classifications
Retailers - wholesalers - and distributors
35. Single order vs repetitive order
Repetiveness
The categorization of inventory by the purpose that it serves
The categorization of inventory by reasons for its existence
Decoupling stock
36. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Types of inventory costs
Capital costs (opportunity costs)
Retailers - wholesalers - and distributors
Hurdle rate
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)
Benefits of inventory/material manager
Storage space costs
Consumption
Inventory service cost
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
Inventory/materials manager
Storage space costs
Functional factors to explain why inventory exists
Retailers - wholesalers - and distributors
39. Allows one part of the system to be isolated from the next
Decoupling stock
Inventory management
Types of inventory costs
Safety stock (buffer stock)
40. Supplies - raw materials - in-processed goods - finished goods
Types of inventory
Internal shortage
The categorization of inventory by the purpose that it serves
Order cost or set up cost
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
Classifying inventory problems
Inventory service cost
Inventory
Contraints
42. Often short on cash because what little they have they devote to growth
The categorization of inventory by reasons for its existence
Time Factor
Growing companies
Pipeline stock
43. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Functional factors to explain why inventory exists
Raw Materials Inventory
Working stock (cycle stock)
Purchase costs
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
Anticipation stock (seasonal stock)
Functional classifications
Inventory/materials manager
Pipeline stock
45. Demands - replenishments - constraints - and costs
Cost accumulation
Major properties of inventory
Order cost or set up cost
Purchasing discounts
46. Supplies - raw materials - in process goods - and finished goods
Manufacturers
Onventory management
Basic types of inventory
Time Factor
47. Customers demand for finished goods
Source of supply
Driving force behind the flow
Supplies inventory
Benefits of inventory/material manager
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)
Responsibility
Major properties of inventory
Costs
Source of supply
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
Inventory holding costs
Supplies inventory
Types of inventory costs
Major properties of inventory
50. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Major properties of inventory
Inventory risk cost
Functional factors to explain why inventory exists
Inventory/materials manager