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 - economy factor






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






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






4. Internal vs external






5. Often everybody's concern - but nones responsibility






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






7. Demands - replenishments - constraints - and costs






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






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






10. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






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






12. It takes time to make a product - but consumers want them on demand






13. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production






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






15. Minimum rate of return expected on new investments






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






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






18. Perpetual vs periodic






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






20. Single order vs repetitive order






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)






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)






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






24. Constant vs variable






25. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions






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






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






28. Have most complex and difficult inventory problems






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






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






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






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






33. Constant vs variable - independent vs dependent






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






35. Associated insurance cost - associated taxes






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






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






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






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






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






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






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






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)






44. Customers demand for finished goods






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






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






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






48. Sacrificed in exchange for buying needed machines






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






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