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. Demands - replenishments - constraints - and costs






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






3. It takes time to make a product - but consumers want them on demand






4. 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






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






6. Minimum rate of return expected on new investments






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






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






9. Demands - replenishments - - constraints - and costs






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






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






12. Associated insurance cost - associated taxes






13. Internal vs external






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






15. 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






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






17. 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






18. 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






19. Constant vs variable - independent vs dependent






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






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






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






23. Display inventory carried to increase product visibility stimulate demand






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






25. 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






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






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






28. Have most complex and difficult inventory problems






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






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






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






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






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






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






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






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






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






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






39. Single order vs repetitive order






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






41. 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






42. Balance is key - concentration may be on one objective at certain times and on another at other times depending on needs of the firm - company policy should emphasize the need to focus on the total cost to the firm - bad idea to have lots of cash






43. Often everybody's concern - but nones responsibility






44. 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






45. 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)






46. 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)






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






48. 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






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






50. 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