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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. Constant vs variable
Properties of inventory
Type of lead time
Storage space
Safety stock (buffer stock)
2. Allows one part of the system to be isolated from the next
Inventory management
Functional classifications
Decoupling stock
Basic types of inventory
3. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classifying inventory problems
Storage space
Inventory management
Inventory service cost
4. 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
Purchasing discounts
Anticipation stock (seasonal stock)
Goals of inventory management
Costs
5. Usually a firm's largest expenditure
Inventory risk cost
Different departments in a firm
Classifying inventory problems
Material costs
6. Customers demand for finished goods
Purchase costs
Driving force behind the flow
Third phase
Inventory carrying cost
7. 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
Classification of Inventory item
Sub goals of inventory management
Internal shortage
Uncertainty Factors
8. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Contraints
Types of inventory costs
Discontinuity Factor
Anticipation stock (seasonal stock)
9. 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
Less inventory
Major components of inventory carrying cost
Inventory risk cost
Inventory flow
10. 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
Anticipation stock (seasonal stock)
Second phase
Consumption
Third phase
11. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory management
Inventory risk cost
External shortage
Types of inventory
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
Pipeline stock
Consumption
Demands
Hurdle rate
13. Time factor - discontinuity factor - uncertainty factor - and economic factor
Less inventory
Sub goals of inventory management
Material costs
The categorization of inventory by reasons for its existence
14. 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)
Hurdle rate
Goals of inventory management
Purchase costs
Classifying inventory problems
15. Time factor - discontinuity factor - uncertainty factor - economy factor
Pipeline stock
Inventory
Functional factors to explain why inventory exists
Inventory carrying cost
16. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Material costs
Time Factor
Retailers - wholesalers - and distributors
Inventory management
17. Those cost that vary with the amount of inventory in the short run
Storage space
Inventory management
Demands
Inventory/materials manager
18. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Type of lead time
Consumption
Source of supply
Properties of inventory
19. Sacrificed in exchange for buying needed machines
Purchasing discounts
Different departments in a firm
Inventory carrying cost
Basic types of inventory
20. Minimum rate of return expected on new investments
Inventory service cost
Reasons why inventory exists
Classifying inventory problems
Hurdle rate
21. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Safety stock (buffer stock)
Types of inventory
Responsibility
Classification of Inventory item
22. 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
Second phase
Classification of Inventory item
Demands
Functional classifications
23. 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
Capital costs (opportunity costs)
Inventory service cost
Initial phase of inventory flow
Third phase
24. Single order vs repetitive order
Functional factors to explain why inventory exists
External shortage
Hurdle rate
Repetiveness
25. 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
Sub goals of inventory management
Driving force behind the flow
In-Proccess Goods
Stock out costs
26. Internal vs external
Inventory service cost
Goals of inventory management
Source of supply
Storage space costs
27. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Replenishments
Discontinuity Factor
Capital costs (opportunity costs)
Type of inventory system
28. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Growing companies
Onventory management
Finished Goods Inventory
The categorization of inventory by the purpose that it serves
29. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Anticipation stock (seasonal stock)
Benefits of inventory/material manager
The categorization of inventory by reasons for its existence
Storage space costs
30. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Supplies inventory
Storage space costs
Inventory management
Purchasing discounts
31. Perpetual vs periodic
Driving force behind the flow
Different departments in a firm
External shortage
Type of inventory system
32. 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)
In-Proccess Goods
Contraints
Inventory service cost
Properties of inventory
33. As you move up in the supply chain...
Inventory service cost
Problems become more complex
Driving force behind the flow
Third phase
34. 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
Inventory risk cost
Functional classifications
Responsibility
Inventory/materials manager
35. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
The categorization of inventory by reasons for its existence
Problems become more complex
Storage space
Economic Factors
36. 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)
Costs
Initial phase of inventory flow
Inventory carrying cost
Anticipation stock (seasonal stock)
37. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Stock out costs
Consumption
Benefits of inventory/material manager
Inventory carrying cost
38. Involves controlling the flow of materials into and out of a system - a big timing problem
Growing companies
Onventory management
Economic Factors
Inventory management
39. Often short on cash because what little they have they devote to growth
Basic types of inventory
The categorization of inventory by the purpose that it serves
Growing companies
Capital cost
40. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Capital costs (opportunity costs)
Properties of inventory
In-Proccess Goods
Costs
41. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
In-Proccess Goods
Demands
Goals of inventory management
Major components of inventory carrying cost
42. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Responsibility
Sub goals of inventory management
Initial phase of inventory flow
43. Associated insurance cost - associated taxes
Material costs
Responsibility
Type of lead time
Inventory service cost
44. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Reasons why inventory exists
Order cost or set up cost
Classification of Inventory item
Different departments in a firm
45. Constant vs variable - independent vs dependent
Decoupling stock
Basic types of inventory
Type of demand
Functional classifications
46. Gives firms a competitive advantage due to lower costs and greater flexibility
Purchase costs
Less inventory
Pipeline stock
Capital costs (opportunity costs)
47. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Additional phases
Stock out costs
Uncertainty Factors
Sub goals of inventory management
48. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
How are inventory problems classified
Retailers - wholesalers - and distributors
Types of inventory
49. Display inventory carried to increase product visibility stimulate demand
External shortage
Capital costs (opportunity costs)
Psychic stock
Type of demand
50. Demands - replenishments - constraints - and costs
Onventory management
Capital costs (opportunity costs)
Material costs
Major properties of inventory