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Test your basic knowledge |
Inventory Management
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Subject
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business-skills
Instructions:
Answer 50 questions in 15 minutes.
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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
Third phase
Safety stock (buffer stock)
Inventory service cost
Psychic stock
2. Usually a firm's largest expenditure
Growing companies
Material costs
Major components of inventory carrying cost
Driving force behind the flow
3. Run out of material or supplies - production stopping - deadlines not met
Second phase
Internal shortage
Working stock (cycle stock)
Benefits of inventory/material manager
4. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory management
Initial phase of inventory flow
Working stock (cycle stock)
Purchase costs
5. Demands - replenishments - constraints - and costs
Inventory holding costs
Sub goals of inventory management
Basic types of inventory
Major properties of inventory
6. 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)
Finished Goods Inventory
External shortage
Hurdle rate
Inventory service cost
7. 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
Properties of inventory
Time Factor
Raw Materials Inventory
Onventory management
8. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Repetiveness
Uncertainty Factors
Different departments in a firm
9. Single order vs repetitive order
The categorization of inventory by the purpose that it serves
Repetiveness
Inventory/materials manager
Decoupling stock
10. 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
Contraints
Initial phase of inventory flow
Sub goals of inventory management
Cost accumulation
11. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Safety stock (buffer stock)
Raw Materials Inventory
Hurdle rate
Order cost or set up cost
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
Stock out costs
Type of inventory system
Benefits of inventory/material manager
Economic Factors
13. Allows one part of the system to be isolated from the next
Basic types of inventory
Decoupling stock
How are inventory problems classified
Repetiveness
14. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Inventory holding costs
Classifying inventory problems
Different departments in a firm
Supplies inventory
15. Often short on cash because what little they have they devote to growth
In-Proccess Goods
Different departments in a firm
Growing companies
Replenishments
16. Demands - replenishments - - constraints - and costs
Sub goals of inventory management
Major properties of inventory
Purchase costs
Properties of inventory
17. 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
Storage space costs
Decoupling stock
Discontinuity Factor
Psychic stock
18. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Goals of inventory management
Different departments in a firm
Basic types of inventory
Stock out costs
19. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Inventory flow
Anticipation stock (seasonal stock)
Uncertainty Factors
Properties of inventory
20. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Purchasing discounts
Inventory management
Contraints
Order cost or set up cost
21. Sacrificed in exchange for buying needed machines
Major components of inventory carrying cost
Purchasing discounts
Cost accumulation
Anticipation stock (seasonal stock)
22. It takes time to make a product - but consumers want them on demand
Inventory management
Safety stock (buffer stock)
Time Factor
Raw Materials Inventory
23. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Demands
Working stock (cycle stock)
Anticipation stock (seasonal stock)
Functional factors to explain why inventory exists
24. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Inventory management
Type of demand
Types of inventory
25. Supplies - raw materials - in-processed goods - finished goods
Additional phases
Types of inventory
Less inventory
Basic types of inventory
26. 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
Safety stock (buffer stock)
Major components of inventory carrying cost
Problems become more complex
Responsibility
27. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Onventory management
Finished Goods Inventory
Inventory carrying cost
Types of inventory
28. Time factor - discontinuity factor - uncertainty factor - and economic factor
Source of supply
Goals of inventory management
The categorization of inventory by reasons for its existence
Functional classifications
29. Constant vs variable
Order cost or set up cost
Inventory
Classification of Inventory item
Type of lead time
30. Constant vs variable - independent vs dependent
Decoupling stock
Purchasing discounts
Basic types of inventory
Type of demand
31. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Type of demand
Inventory flow
Functional factors to explain why inventory exists
Storage space costs
32. Cost of obsolescence - damage cost - shrinkage (theft) cost
Inventory risk cost
Cost accumulation
Type of inventory system
Storage space costs
33. As you move up in the supply chain...
Problems become more complex
Functional classifications
Storage space costs
Different departments in a firm
34. 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
Costs
Properties of inventory
Major components of inventory carrying cost
Inventory carrying cost
35. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Inventory service cost
Raw Materials Inventory
Properties of inventory
Economic Factors
36. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Capital costs (opportunity costs)
Inventory/materials manager
Pipeline stock
37. 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
Inventory management
Anticipation stock (seasonal stock)
Different departments in a firm
Cost accumulation
38. Internal vs external
Capital costs (opportunity costs)
Source of supply
Type of demand
Onventory management
39. Gives firms a competitive advantage due to lower costs and greater flexibility
Uncertainty Factors
Capital cost
Less inventory
Raw Materials Inventory
40. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Responsibility
Safety stock (buffer stock)
Additional phases
Storage space costs
41. Minimum rate of return expected on new investments
Hurdle rate
Type of inventory system
Initial phase of inventory flow
Discontinuity Factor
42. 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
Capital costs (opportunity costs)
Source of supply
Purchase costs
Anticipation stock (seasonal stock)
43. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Inventory carrying cost
Purchasing discounts
Types of inventory costs
The categorization of inventory by the purpose that it serves
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
Inventory holding costs
Capital cost
Pipeline stock
Inventory management
45. 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
Goals of inventory management
Inventory
Driving force behind the flow
Time Factor
46. 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
Different departments in a firm
Second phase
Consumption
Inventory holding costs
47. Often everybody's concern - but nones responsibility
Onventory management
Functional classifications
Stock out costs
Purchasing discounts
48. Involves controlling the flow of materials into and out of a system - a big timing problem
Different departments in a firm
How are inventory problems classified
Inventory management
Safety stock (buffer stock)
49. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Economic Factors
Classifying inventory problems
Uncertainty Factors
Type of inventory system
50. 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)
Source of supply
Demands
Major components of inventory carrying cost
Purchase costs
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