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. Demands - replenishments - - constraints - and costs






2. 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






3. 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






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






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






6. 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






7. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






8. As you move up in the supply chain...






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






10. 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






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






13. 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






14. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






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






16. Customers demand for finished goods






17. Constant vs variable - independent vs dependent






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






19. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






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






23. Constant vs variable






24. Minimum rate of return expected on new investments






25. Sacrificed in exchange for buying needed machines






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






27. 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






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






29. Often everybody's concern - but nones responsibility






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






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






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






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






34. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






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






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






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






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






39. Internal vs external






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






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






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






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






45. Usually a firm's largest expenditure






46. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability






47. 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)






48. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)






49. 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






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