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Test your basic knowledge |
Inventory Management
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Subject
:
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. It takes time to make a product - but consumers want them on demand
Safety stock (buffer stock)
Driving force behind the flow
Time Factor
Anticipation stock (seasonal stock)
2. 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
The categorization of inventory by reasons for its existence
Second phase
Repetiveness
Initial phase of inventory flow
3. 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
Type of demand
Decoupling stock
Inventory carrying cost
Inventory risk cost
4. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Order cost or set up cost
In-Proccess Goods
Working stock (cycle stock)
Storage space costs
5. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Responsibility
Pipeline stock
Contraints
Functional classifications
6. 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
Classifying inventory problems
Repetiveness
Discontinuity Factor
Growing companies
7. 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)
Initial phase of inventory flow
Costs
Consumption
Inventory management
8. 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
Source of supply
Additional phases
Internal shortage
Anticipation stock (seasonal stock)
9. Often short on cash because what little they have they devote to growth
Functional classifications
Safety stock (buffer stock)
Growing companies
Types of inventory
10. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Cost accumulation
Finished Goods Inventory
Stock out costs
Functional classifications
11. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Storage space costs
Additional phases
Inventory risk cost
Consumption
12. Involves controlling the flow of materials into and out of a system - a big timing problem
Capital cost
Storage space costs
Second phase
Inventory management
13. One firms finished goods may be another firms supplies or raw materials
Major properties of inventory
Classification of Inventory item
Order cost or set up cost
Responsibility
14. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
External shortage
Driving force behind the flow
Uncertainty Factors
Third phase
15. Usually a firm's largest expenditure
Classification of Inventory item
Material costs
Replenishments
Working stock (cycle stock)
16. Sacrificed in exchange for buying needed machines
Purchasing discounts
Inventory management
Order cost or set up cost
Functional factors to explain why inventory exists
17. 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)
Functional factors to explain why inventory exists
Discontinuity Factor
Psychic stock
Reasons why inventory exists
18. 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
Inventory/materials manager
Demands
Purchase costs
Reasons why inventory exists
19. 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
Inventory/materials manager
Inventory management
Properties of inventory
Functional classifications
20. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Pipeline stock
Manufacturers
Inventory management
Material costs
21. Demands - replenishments - - constraints - and costs
Properties of inventory
Driving force behind the flow
Order cost or set up cost
Manufacturers
22. Customers demand for finished goods
Driving force behind the flow
Type of demand
Inventory
Inventory/materials manager
23. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Types of inventory costs
Repetiveness
Storage space costs
Basic types of inventory
24. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Inventory
Major components of inventory carrying cost
Safety stock (buffer stock)
Contraints
25. 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)
Storage space costs
Properties of inventory
Purchase costs
Additional phases
26. Time factor - discontinuity factor - uncertainty factor - economy factor
Replenishments
Working stock (cycle stock)
Functional factors to explain why inventory exists
Initial phase of inventory flow
27. 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
Cost accumulation
Raw Materials Inventory
Psychic stock
Demands
28. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Contraints
Classification of Inventory item
Functional classifications
Psychic stock
29. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Inventory service cost
Classifying inventory problems
Inventory service cost
Capital costs (opportunity costs)
30. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Types of inventory
Manufacturers
Less inventory
Replenishments
31. Internal vs external
Finished Goods Inventory
Source of supply
Consumption
Capital costs (opportunity costs)
32. Run out of material or supplies - production stopping - deadlines not met
Internal shortage
Onventory management
Major properties of inventory
Classifying inventory problems
33. Constant vs variable - independent vs dependent
Type of demand
Major properties of inventory
Reasons why inventory exists
Onventory management
34. 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
Different departments in a firm
Inventory risk cost
Sub goals of inventory management
Pipeline stock
35. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Inventory/materials manager
Inventory holding costs
Contraints
36. 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
Inventory
Type of lead time
Initial phase of inventory flow
Demands
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
Type of demand
Different departments in a firm
Cost accumulation
Raw Materials Inventory
38. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Supplies inventory
Decoupling stock
Repetiveness
Storage space costs
39. Display inventory carried to increase product visibility stimulate demand
Economic Factors
Psychic stock
Growing companies
Stock out costs
40. Demands - replenishments - constraints - and costs
Inventory risk cost
Major properties of inventory
Pipeline stock
Inventory risk cost
41. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Anticipation stock (seasonal stock)
In-Proccess Goods
Type of inventory system
Inventory flow
42. 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
Hurdle rate
In-Proccess Goods
Purchase costs
Responsibility
43. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Inventory flow
Additional phases
Cost accumulation
Time Factor
44. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Classification of Inventory item
Cost accumulation
Safety stock (buffer stock)
Goals of inventory management
45. Cost of obsolescence - damage cost - shrinkage (theft) cost
Order cost or set up cost
Inventory risk cost
Classifying inventory problems
Finished Goods Inventory
46. Those cost that vary with the amount of inventory in the short run
Raw Materials Inventory
Finished Goods Inventory
Storage space
Types of inventory costs
47. Single order vs repetitive order
Inventory service cost
Inventory holding costs
Retailers - wholesalers - and distributors
Repetiveness
48. 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
Consumption
Stock out costs
Working stock (cycle stock)
Major properties of inventory
49. Supplies - raw materials - in process goods - and finished goods
Onventory management
Purchase costs
Pipeline stock
Basic types of inventory
50. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Internal shortage
Storage space costs
Capital costs (opportunity costs)
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