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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. Display inventory carried to increase product visibility stimulate demand
Additional phases
Psychic stock
Pipeline stock
Reasons why inventory exists
2. 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
Basic types of inventory
Inventory management
Different departments in a firm
Discontinuity Factor
3. Sacrificed in exchange for buying needed machines
Purchasing discounts
Working stock (cycle stock)
Functional factors to explain why inventory exists
Classification of Inventory item
4. Usually a firm's largest expenditure
Demands
Economic Factors
Material costs
Stock out costs
5. 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
Inventory flow
Reasons why inventory exists
Additional phases
6. 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
Second phase
Inventory flow
Properties of inventory
7. Run out of material or supplies - production stopping - deadlines not met
Replenishments
Internal shortage
Psychic stock
Inventory service cost
8. Perpetual vs periodic
Type of inventory system
External shortage
Growing companies
Costs
9. Cost of obsolescence - damage cost - shrinkage (theft) cost
Material costs
Inventory risk cost
Second phase
Capital cost
10. Supplies - raw materials - in-processed goods - finished goods
Less inventory
Pipeline stock
Repetiveness
Types of inventory
11. Often everybody's concern - but nones responsibility
Onventory management
Classification of Inventory item
Inventory flow
Inventory management
12. 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
Purchase costs
Material costs
External shortage
13. Those cost that vary with the amount of inventory in the short run
Order cost or set up cost
Storage space
Capital cost
Different departments in a firm
14. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Retailers - wholesalers - and distributors
Functional factors to explain why inventory exists
Inventory risk cost
Inventory holding costs
15. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
External shortage
Types of inventory
Classifying inventory problems
Additional phases
16. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Supplies inventory
Time Factor
The categorization of inventory by the purpose that it serves
17. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Pipeline stock
Replenishments
Type of demand
Cost accumulation
18. 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)
Capital cost
Problems become more complex
Inventory management
19. Time factor - discontinuity factor - uncertainty factor - economy factor
Decoupling stock
Inventory carrying cost
Internal shortage
Functional factors to explain why inventory exists
20. 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
Properties of inventory
Demands
Basic types of inventory
Inventory holding costs
21. 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)
Cost accumulation
Contraints
Working stock (cycle stock)
Costs
22. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Material costs
In-Proccess Goods
Less inventory
Inventory
23. Constant vs variable - independent vs dependent
Type of inventory system
Type of demand
Second phase
Contraints
24. Allows one part of the system to be isolated from the next
Supplies inventory
Goals of inventory management
How are inventory problems classified
Decoupling stock
25. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Material costs
Safety stock (buffer stock)
Inventory risk cost
Repetiveness
26. Internal vs external
Time Factor
Source of supply
Responsibility
Anticipation stock (seasonal stock)
27. 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
Classifying inventory problems
How are inventory problems classified
Second phase
Inventory
28. Minimum rate of return expected on new investments
Discontinuity Factor
Hurdle rate
Different departments in a firm
Major components of inventory carrying cost
29. Supplies - raw materials - in process goods - and finished goods
Sub goals of inventory management
Inventory flow
Major properties of inventory
Basic types of inventory
30. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Supplies inventory
Third phase
Classifying inventory problems
Internal shortage
31. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Pipeline stock
Purchase costs
The categorization of inventory by the purpose that it serves
Reasons why inventory exists
32. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Inventory carrying cost
Source of supply
The categorization of inventory by reasons for its existence
33. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Growing companies
How are inventory problems classified
Safety stock (buffer stock)
Inventory service cost
34. Gives firms a competitive advantage due to lower costs and greater flexibility
Capital costs (opportunity costs)
Less inventory
Material costs
Inventory holding costs
35. 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)
Reasons why inventory exists
Material costs
Type of lead time
The categorization of inventory by the purpose that it serves
36. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Driving force behind the flow
Third phase
Psychic stock
37. 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
Stock out costs
Responsibility
Inventory holding costs
Costs
38. Often short on cash because what little they have they devote to growth
Reasons why inventory exists
Different departments in a firm
Sub goals of inventory management
Growing companies
39. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Storage space costs
Different departments in a firm
Inventory risk cost
Inventory management
40. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Hurdle rate
How are inventory problems classified
Order cost or set up cost
Discontinuity Factor
41. Time factor - discontinuity factor - uncertainty factor - and economic factor
Capital cost
Functional classifications
Retailers - wholesalers - and distributors
The categorization of inventory by reasons for its existence
42. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Stock out costs
Growing companies
The categorization of inventory by the purpose that it serves
Retailers - wholesalers - and distributors
43. 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
Types of inventory
Inventory risk cost
Capital costs (opportunity costs)
Repetiveness
44. Have most complex and difficult inventory problems
Capital cost
Manufacturers
The categorization of inventory by reasons for its existence
Purchase costs
45. 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
Anticipation stock (seasonal stock)
Raw Materials Inventory
Inventory risk cost
Reasons why inventory exists
46. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Inventory service cost
Second phase
Consumption
Internal shortage
47. Constant vs variable
Material costs
Type of lead time
Less inventory
Initial phase of inventory flow
48. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
Inventory risk cost
Type of demand
Benefits of inventory/material manager
49. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Inventory
Purchasing discounts
Problems become more complex
Supplies inventory
50. As you move up in the supply chain...
Problems become more complex
Costs
Inventory risk cost
Functional classifications