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Test your basic knowledge |
Inventory Management
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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. 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)
Costs
Economic Factors
Inventory risk cost
Purchasing discounts
2. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Inventory service cost
Different departments in a firm
Storage space
Goals of inventory management
3. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Psychic stock
Inventory
Supplies inventory
4. 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
Sub goals of inventory management
Raw Materials Inventory
Inventory flow
Material costs
5. 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
Types of inventory costs
Major components of inventory carrying cost
Inventory service cost
Sub goals of inventory management
6. One firms finished goods may be another firms supplies or raw materials
Problems become more complex
Repetiveness
Classification of Inventory item
Major properties of inventory
7. Have most complex and difficult inventory problems
Purchasing discounts
Manufacturers
Capital costs (opportunity costs)
Costs
8. 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
Types of inventory costs
Inventory holding costs
Capital cost
Cost accumulation
9. Gives firms a competitive advantage due to lower costs and greater flexibility
Growing companies
Less inventory
Initial phase of inventory flow
Functional classifications
10. 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)
Major components of inventory carrying cost
Costs
Inventory risk cost
Reasons why inventory exists
11. Usually a firm's largest expenditure
Types of inventory costs
Psychic stock
Inventory risk cost
Material costs
12. Run out of material or supplies - production stopping - deadlines not met
How are inventory problems classified
Functional classifications
Internal shortage
Classifying inventory problems
13. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Time Factor
Decoupling stock
Supplies inventory
14. 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)
Type of lead time
Type of inventory system
Purchase costs
How are inventory problems classified
15. 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)
Supplies inventory
Inventory service cost
Second phase
Benefits of inventory/material manager
16. Allows one part of the system to be isolated from the next
Anticipation stock (seasonal stock)
Major properties of inventory
Decoupling stock
Working stock (cycle stock)
17. 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
How are inventory problems classified
Inventory
Uncertainty Factors
Replenishments
18. Sacrificed in exchange for buying needed machines
Repetiveness
Type of demand
Decoupling stock
Purchasing discounts
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
Properties of inventory
Benefits of inventory/material manager
Supplies inventory
Inventory risk cost
20. Time factor - discontinuity factor - uncertainty factor - and economic factor
Inventory
The categorization of inventory by reasons for its existence
How are inventory problems classified
Decoupling stock
21. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Order cost or set up cost
Type of lead time
Repetiveness
22. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classification of Inventory item
Classifying inventory problems
Inventory management
Major components of inventory carrying cost
23. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Goals of inventory management
Growing companies
Inventory management
Purchase costs
24. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
The categorization of inventory by the purpose that it serves
Properties of inventory
Types of inventory
Goals of inventory management
25. Often short on cash because what little they have they devote to growth
Material costs
Growing companies
Stock out costs
Different departments in a firm
26. Constant vs variable
Contraints
Type of lead time
Capital costs (opportunity costs)
Inventory service cost
27. As you move up in the supply chain...
Major properties of inventory
Growing companies
The categorization of inventory by reasons for its existence
Problems become more complex
28. It takes time to make a product - but consumers want them on demand
Inventory holding costs
Costs
Time Factor
Onventory management
29. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Supplies inventory
The categorization of inventory by the purpose that it serves
Functional factors to explain why inventory exists
30. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
How are inventory problems classified
Inventory risk cost
Inventory management
Major components of inventory carrying cost
31. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Purchasing discounts
Safety stock (buffer stock)
Order cost or set up cost
Psychic stock
32. Often everybody's concern - but nones responsibility
Onventory management
Problems become more complex
Order cost or set up cost
Inventory holding costs
33. Internal vs external
Major properties of inventory
Inventory management
Source of supply
Second phase
34. 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
Inventory carrying cost
Source of supply
Storage space costs
Purchase costs
35. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Time Factor
Initial phase of inventory flow
Type of demand
Retailers - wholesalers - and distributors
36. 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
Goals of inventory management
Inventory management
Consumption
37. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Types of inventory costs
Benefits of inventory/material manager
Capital cost
Inventory management
38. Customers demand for finished goods
Functional classifications
Storage space costs
Pipeline stock
Driving force behind the flow
39. 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
Cost accumulation
Functional classifications
Initial phase of inventory flow
Purchase costs
40. Demands - replenishments - constraints - and costs
Major properties of inventory
Classification of Inventory item
Manufacturers
Psychic stock
41. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Finished Goods Inventory
Type of lead time
Type of inventory system
42. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Costs
Properties of inventory
Major properties of inventory
Capital cost
43. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Inventory risk cost
Replenishments
Purchase costs
Initial phase of inventory flow
44. Time factor - discontinuity factor - uncertainty factor - economy factor
Functional factors to explain why inventory exists
Psychic stock
Consumption
Inventory management
45. Involves controlling the flow of materials into and out of a system - a big timing problem
Problems become more complex
Replenishments
Inventory management
How are inventory problems classified
46. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Decoupling stock
Retailers - wholesalers - and distributors
Additional phases
Second phase
47. Those cost that vary with the amount of inventory in the short run
Types of inventory costs
Storage space
Pipeline stock
Replenishments
48. Display inventory carried to increase product visibility stimulate demand
Inventory management
Psychic stock
Third phase
Costs
49. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Demands
Inventory carrying cost
Inventory risk cost
50. Single order vs repetitive order
Repetiveness
Working stock (cycle stock)
Goals of inventory management
Consumption