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. 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






3. Sacrificed in exchange for buying needed machines






4. Usually a firm's largest expenditure






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






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






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






8. Perpetual vs periodic






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






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






11. Often everybody's concern - but nones responsibility






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






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






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






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






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






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






18. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






19. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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)






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






23. Constant vs variable - independent vs dependent






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






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






26. Internal vs external






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






28. Minimum rate of return expected on new investments






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






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






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






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






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






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






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)






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






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






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






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






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






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






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






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






44. Have most complex and difficult inventory problems






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






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






47. Constant vs variable






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






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






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