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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. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Goals of inventory management
Anticipation stock (seasonal stock)
Inventory holding costs
Inventory management
2. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Storage space
Time Factor
Finished Goods Inventory
The categorization of inventory by the purpose that it serves
3. Often short on cash because what little they have they devote to growth
Different departments in a firm
Growing companies
Material costs
Less inventory
4. Customers demand for finished goods
Purchasing discounts
Driving force behind the flow
Responsibility
Reasons why inventory exists
5. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Responsibility
Growing companies
Types of inventory
Types of inventory costs
6. Perpetual vs periodic
Type of inventory system
Retailers - wholesalers - and distributors
Material costs
Type of lead time
7. 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
Classification of Inventory item
Problems become more complex
Second phase
Pipeline stock
8. One firms finished goods may be another firms supplies or raw materials
Responsibility
Functional factors to explain why inventory exists
Safety stock (buffer stock)
Classification of Inventory item
9. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
How are inventory problems classified
Problems become more complex
Inventory carrying cost
10. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Initial phase of inventory flow
Inventory flow
Responsibility
Finished Goods Inventory
11. Time factor - discontinuity factor - uncertainty factor - economy factor
Functional factors to explain why inventory exists
Classification of Inventory item
Anticipation stock (seasonal stock)
Uncertainty Factors
12. 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
Stock out costs
Material costs
Costs
Cost accumulation
13. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Pipeline stock
Storage space costs
Inventory holding costs
Safety stock (buffer stock)
14. Allows one part of the system to be isolated from the next
Hurdle rate
Decoupling stock
Pipeline stock
Inventory
15. 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
Inventory holding costs
Psychic stock
Second phase
Inventory/materials manager
16. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Consumption
Type of demand
Growing companies
Working stock (cycle stock)
17. Supplies - raw materials - in-processed goods - finished goods
Economic Factors
The categorization of inventory by the purpose that it serves
Major properties of inventory
Types of inventory
18. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Responsibility
Replenishments
Material costs
Inventory management
19. Gives firms a competitive advantage due to lower costs and greater flexibility
Inventory management
Less inventory
Inventory risk cost
Type of lead time
20. As you move up in the supply chain...
Problems become more complex
Third phase
Pipeline stock
Replenishments
21. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Additional phases
Sub goals of inventory management
Problems become more complex
Third phase
22. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Replenishments
Consumption
Capital costs (opportunity costs)
Growing companies
23. Demands - replenishments - - constraints - and costs
Properties of inventory
Functional classifications
Pipeline stock
Inventory service cost
24. Run out of material or supplies - production stopping - deadlines not met
Discontinuity Factor
Internal shortage
Functional factors to explain why inventory exists
Manufacturers
25. Minimum rate of return expected on new investments
Hurdle rate
The categorization of inventory by reasons for its existence
External shortage
Contraints
26. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Onventory management
Retailers - wholesalers - and distributors
Inventory risk cost
Driving force behind the flow
27. Internal vs external
Repetiveness
Pipeline stock
Source of supply
Manufacturers
28. Often everybody's concern - but nones responsibility
Functional classifications
Onventory management
Storage space
Supplies inventory
29. Capital costs - storage space costs - inventory service cost - inventory risk cost
Consumption
Hurdle rate
Major components of inventory carrying cost
Supplies inventory
30. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Classification of Inventory item
Responsibility
The categorization of inventory by the purpose that it serves
31. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Inventory service cost
Uncertainty Factors
Inventory holding costs
Major components of inventory carrying cost
32. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Replenishments
Different departments in a firm
Inventory service cost
Safety stock (buffer stock)
33. 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 flow
Inventory
Decoupling stock
Purchasing discounts
34. 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
Stock out costs
Major components of inventory carrying cost
Inventory flow
Functional factors to explain why inventory exists
35. 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
Economic Factors
Sub goals of inventory management
Raw Materials Inventory
Inventory management
36. Display inventory carried to increase product visibility stimulate demand
Inventory risk cost
The categorization of inventory by reasons for its existence
In-Proccess Goods
Psychic stock
37. 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
Type of demand
In-Proccess Goods
Classification of Inventory item
Stock out costs
38. 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)
Inventory service cost
Replenishments
Major components of inventory carrying cost
Cost accumulation
39. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Capital cost
Inventory management
Economic Factors
Different departments in a firm
40. 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
Benefits of inventory/material manager
Demands
Inventory carrying cost
Major components of inventory carrying cost
41. Time factor - discontinuity factor - uncertainty factor - and economic factor
Type of lead time
The categorization of inventory by reasons for its existence
Material costs
Inventory management
42. 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
Functional factors to explain why inventory exists
Safety stock (buffer stock)
Manufacturers
Anticipation stock (seasonal stock)
43. 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
Pipeline stock
Onventory management
Initial phase of inventory flow
Manufacturers
44. 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
Additional phases
Inventory/materials manager
Properties of inventory
The categorization of inventory by the purpose that it serves
45. 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)
Inventory flow
Purchase costs
Material costs
Inventory risk cost
46. 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)
Inventory service cost
Inventory/materials manager
Pipeline stock
Reasons why inventory exists
47. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Inventory flow
Retailers - wholesalers - and distributors
Purchasing discounts
48. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Inventory
Repetiveness
Classifying inventory problems
Decoupling stock
49. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Hurdle rate
Types of inventory
Inventory service cost
Storage space costs
50. 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)
Internal shortage
Stock out costs
Sub goals of inventory management
Costs