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Test your basic knowledge |
Inventory Management
Start Test
Study First
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. Time factor - discontinuity factor - uncertainty factor - economy factor
Purchasing discounts
Inventory service cost
Onventory management
Functional factors to explain why inventory exists
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
Capital cost
Responsibility
Onventory management
Hurdle rate
3. 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
In-Proccess Goods
Purchasing discounts
External shortage
Pipeline stock
4. Internal vs external
External shortage
Less inventory
Source of supply
Inventory flow
5. Often everybody's concern - but nones responsibility
Manufacturers
Onventory management
Initial phase of inventory flow
Time Factor
6. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Cost accumulation
Internal shortage
Economic Factors
7. Demands - replenishments - constraints - and costs
Time Factor
Retailers - wholesalers - and distributors
Major properties of inventory
Purchasing discounts
8. 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
Inventory/materials manager
Sub goals of inventory management
Major properties of inventory
Costs
9. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Problems become more complex
Order cost or set up cost
Inventory flow
In-Proccess Goods
10. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Sub goals of inventory management
Inventory risk cost
Third phase
Type of lead time
11. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Economic Factors
Major properties of inventory
Growing companies
External shortage
12. It takes time to make a product - but consumers want them on demand
Purchase costs
Time Factor
Repetiveness
Contraints
13. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Type of inventory system
Order cost or set up cost
Economic Factors
14. Those cost that vary with the amount of inventory in the short run
Storage space
Inventory service cost
Third phase
Less inventory
15. Minimum rate of return expected on new investments
Hurdle rate
Purchasing discounts
Type of lead time
Basic types of inventory
16. 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
Reasons why inventory exists
Inventory management
Demands
Source of supply
17. 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
Third phase
Capital costs (opportunity costs)
Properties of inventory
18. Perpetual vs periodic
Safety stock (buffer stock)
Demands
Type of inventory system
Less inventory
19. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Functional classifications
Second phase
Supplies inventory
Basic types of inventory
20. Single order vs repetitive order
Types of inventory
Second phase
Repetiveness
Cost accumulation
21. 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)
Finished Goods Inventory
Internal shortage
Purchase costs
Capital costs (opportunity costs)
22. 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)
Material costs
How are inventory problems classified
Inventory service cost
Raw Materials Inventory
23. 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
Retailers - wholesalers - and distributors
Capital costs (opportunity costs)
Inventory flow
Psychic stock
24. Constant vs variable
Type of lead time
Contraints
Order cost or set up cost
Cost accumulation
25. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
In-Proccess Goods
Inventory management
Inventory carrying cost
26. Allows one part of the system to be isolated from the next
Material costs
Anticipation stock (seasonal stock)
Working stock (cycle stock)
Decoupling stock
27. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Inventory risk cost
Finished Goods Inventory
Functional classifications
Types of inventory costs
28. Have most complex and difficult inventory problems
Anticipation stock (seasonal stock)
Inventory/materials manager
Manufacturers
Purchasing discounts
29. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Second phase
The categorization of inventory by the purpose that it serves
Inventory
Uncertainty Factors
30. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Inventory service cost
Second phase
The categorization of inventory by the purpose that it serves
31. 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
Working stock (cycle stock)
Source of supply
Raw Materials Inventory
External shortage
32. Run out of material or supplies - production stopping - deadlines not met
Less inventory
Internal shortage
Stock out costs
Time Factor
33. Constant vs variable - independent vs dependent
Inventory holding costs
Inventory
Retailers - wholesalers - and distributors
Type of demand
34. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Reasons why inventory exists
Driving force behind the flow
Inventory flow
Inventory management
35. Associated insurance cost - associated taxes
Functional factors to explain why inventory exists
Inventory service cost
Classification of Inventory item
Inventory/materials manager
36. 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
Less inventory
Functional factors to explain why inventory exists
Problems become more complex
Second phase
37. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
The categorization of inventory by the purpose that it serves
Properties of inventory
Goals of inventory management
Capital cost
38. 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
Capital costs (opportunity costs)
In-Proccess Goods
Source of supply
Uncertainty Factors
39. Supplies - raw materials - in-processed goods - finished goods
Third phase
Types of inventory
Goals of inventory management
Economic Factors
40. Involves controlling the flow of materials into and out of a system - a big timing problem
Driving force behind the flow
Internal shortage
Different departments in a firm
Inventory management
41. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
In-Proccess Goods
Benefits of inventory/material manager
Cost accumulation
Functional classifications
42. 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
Discontinuity Factor
Classification of Inventory item
Inventory/materials manager
Less inventory
43. 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)
Purchasing discounts
Reasons why inventory exists
Retailers - wholesalers - and distributors
Supplies inventory
44. Customers demand for finished goods
Functional classifications
Type of inventory system
Types of inventory costs
Driving force behind the flow
45. 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
Consumption
Inventory flow
Supplies inventory
Inventory/materials manager
46. Capital costs - storage space costs - inventory service cost - inventory risk cost
Inventory holding costs
Major components of inventory carrying cost
Functional factors to explain why inventory exists
Inventory risk cost
47. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Retailers - wholesalers - and distributors
Classifying inventory problems
Second phase
Finished Goods Inventory
48. Sacrificed in exchange for buying needed machines
Manufacturers
Inventory management
Purchasing discounts
Responsibility
49. Final product - available for storage - distribution - or sale; isolate the customer from the producer
How are inventory problems classified
Finished Goods Inventory
Reasons why inventory exists
Type of lead time
50. Time factor - discontinuity factor - uncertainty factor - and economic factor
Inventory risk cost
Raw Materials Inventory
The categorization of inventory by reasons for its existence
Manufacturers