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






2. 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






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






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






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






6. 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)






7. Associated insurance cost - associated taxes






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






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






10. 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






11. 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)






12. 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






13. 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






14. 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






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






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






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






18. Sacrificed in exchange for buying needed machines






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






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






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






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






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






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






25. Often everybody's concern - but nones responsibility






26. 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






27. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another






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






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






30. 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






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






32. 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






33. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system






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






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






36. Display inventory carried to increase product visibility stimulate demand






37. 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)






38. Demands - replenishments - - constraints - and costs






39. Time factor - discontinuity factor - uncertainty factor - economy factor






40. 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)






41. Constant vs variable - independent vs dependent






42. Customers demand for finished goods






43. Have most complex and difficult inventory problems






44. Usually a firm's largest expenditure






45. Single order vs repetitive order






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






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






48. Perpetual vs periodic






49. 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






50. Minimum rate of return expected on new investments