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. Display inventory carried to increase product visibility stimulate demand






2. Demands - replenishments - constraints - and costs






3. 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






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






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






6. 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






7. Internal vs external






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






9. 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






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






11. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






12. 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






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






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






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






16. 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






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






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






19. Have most complex and difficult inventory problems






20. Final product - available for storage - distribution - or sale; isolate the customer from the producer






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






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






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






24. 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)






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






26. 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






27. 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)






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






29. 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






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






31. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






34. Associated insurance cost - associated taxes






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






36. 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






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






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






39. Perpetual vs periodic






40. Gives firms a competitive advantage due to lower costs and greater flexibility






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






42. Constant vs variable - independent vs dependent






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






44. Customers demand for finished goods






45. Often everybody's concern - but nones responsibility






46. 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






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






48. Single order vs repetitive order






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






50. Constant vs variable