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. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






2. 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






3. 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






4. 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






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






6. 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






7. Internal vs external






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






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






10. Customers demand for finished goods






11. 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






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






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






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






15. 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






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






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






18. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)






19. 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






20. 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)






21. 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






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






23. Often everybody's concern - but nones responsibility






24. Associated insurance cost - associated taxes






25. Single order vs repetitive order






26. Demands - replenishments - constraints - and costs






27. Demands - replenishments - - constraints - and costs






28. Constant vs variable - independent vs dependent






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






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






31. Display inventory carried to increase product visibility stimulate demand






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






33. Time factor - discontinuity factor - uncertainty factor - economy factor






34. 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






35. 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






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






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






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






39. 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






40. 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






41. 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)






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






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






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






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






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






47. 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






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






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






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