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






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






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






4. 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)






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






6. 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






7. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock






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






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






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






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. Constant vs variable - independent vs dependent






13. Display inventory carried to increase product visibility stimulate demand






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






15. Internal vs external






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






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






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






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






20. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation






21. 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






22. Single order vs repetitive order






23. Associated insurance cost - associated taxes






24. Final product - available for storage - distribution - or sale; isolate the customer from the producer






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






26. Constant vs variable






27. Time factor - discontinuity factor - uncertainty factor - economy factor






28. 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






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






30. 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






31. Customers demand for finished goods






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






33. 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






34. Usually a firm's largest expenditure






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






36. 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






37. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)






38. Minimum rate of return expected on new investments






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






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






41. 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






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






43. Sacrificed in exchange for buying needed machines






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






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






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






47. Have most complex and difficult inventory problems






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






49. 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)






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