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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. Gives firms a competitive advantage due to lower costs and greater flexibility
Inventory
Demands
Inventory holding costs
Less inventory
2. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Initial phase of inventory flow
The categorization of inventory by reasons for its existence
How are inventory problems classified
Goals of inventory management
3. Allows one part of the system to be isolated from the next
Functional factors to explain why inventory exists
Demands
Responsibility
Decoupling stock
4. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Types of inventory costs
Driving force behind the flow
Internal shortage
5. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Manufacturers
Economic Factors
Inventory risk cost
Order cost or set up cost
6. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Reasons why inventory exists
Benefits of inventory/material manager
Functional factors to explain why inventory exists
7. Involves controlling the flow of materials into and out of a system - a big timing problem
Functional factors to explain why inventory exists
Initial phase of inventory flow
The categorization of inventory by the purpose that it serves
Inventory management
8. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Replenishments
Stock out costs
Different departments in a firm
Anticipation stock (seasonal stock)
9. Sacrificed in exchange for buying needed machines
Storage space costs
Classifying inventory problems
Inventory risk cost
Purchasing discounts
10. 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)
Order cost or set up cost
Inventory holding costs
Purchase costs
Purchasing discounts
11. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Decoupling stock
Additional phases
Inventory service cost
12. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Inventory flow
Anticipation stock (seasonal stock)
Inventory management
Classifying inventory problems
13. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Goals of inventory management
Types of inventory costs
Uncertainty Factors
Finished Goods Inventory
14. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
How are inventory problems classified
Decoupling stock
Purchase costs
Goals of inventory management
15. Minimum rate of return expected on new investments
Supplies inventory
Inventory service cost
Hurdle rate
Reasons why inventory exists
16. 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
Inventory
Replenishments
Inventory holding costs
17. Supplies - raw materials - in process goods - and finished goods
Capital cost
Basic types of inventory
Driving force behind the flow
Discontinuity Factor
18. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Supplies inventory
Manufacturers
Major components of inventory carrying cost
The categorization of inventory by the purpose that it serves
19. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Cost accumulation
Safety stock (buffer stock)
Type of lead time
Inventory service cost
20. Cost of obsolescence - damage cost - shrinkage (theft) cost
Functional classifications
Inventory risk cost
Inventory holding costs
Sub goals of inventory management
21. 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
Inventory risk cost
Problems become more complex
Inventory flow
Inventory/materials manager
22. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
The categorization of inventory by the purpose that it serves
Working stock (cycle stock)
Costs
Functional factors to explain why inventory exists
23. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Safety stock (buffer stock)
Types of inventory
Basic types of inventory
Capital cost
24. Time factor - discontinuity factor - uncertainty factor - and economic factor
Source of supply
The categorization of inventory by reasons for its existence
Onventory management
Working stock (cycle stock)
25. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
In-Proccess Goods
Storage space costs
Classifying inventory problems
Capital costs (opportunity costs)
26. Internal vs external
Safety stock (buffer stock)
Reasons why inventory exists
Costs
Source of supply
27. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Source of supply
In-Proccess Goods
Inventory
Psychic stock
28. Those cost that vary with the amount of inventory in the short run
Costs
Working stock (cycle stock)
Inventory flow
Storage space
29. 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
Benefits of inventory/material manager
Responsibility
The categorization of inventory by reasons for its existence
Second phase
30. Often everybody's concern - but nones responsibility
Onventory management
Inventory risk cost
Capital costs (opportunity costs)
Different departments in a firm
31. One firms finished goods may be another firms supplies or raw materials
Inventory carrying cost
Classification of Inventory item
Basic types of inventory
Inventory management
32. Supplies - raw materials - in-processed goods - finished goods
Classifying inventory problems
Time Factor
Types of inventory
Basic types of inventory
33. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
The categorization of inventory by the purpose that it serves
Third phase
Retailers - wholesalers - and distributors
Sub goals of inventory management
34. Have most complex and difficult inventory problems
Reasons why inventory exists
Manufacturers
Second phase
Basic types of inventory
35. 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
The categorization of inventory by the purpose that it serves
Raw Materials Inventory
36. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Storage space costs
Functional classifications
Raw Materials Inventory
Problems become more complex
37. 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
Benefits of inventory/material manager
Sub goals of inventory management
Inventory holding costs
Discontinuity Factor
38. As you move up in the supply chain...
Inventory
Less inventory
Problems become more complex
Functional classifications
39. 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
Finished Goods Inventory
Purchasing discounts
Inventory management
Capital costs (opportunity costs)
40. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Type of demand
Type of lead time
Benefits of inventory/material manager
Sub goals of inventory management
41. 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
Safety stock (buffer stock)
Inventory
Sub goals of inventory management
Purchasing discounts
42. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Hurdle rate
How are inventory problems classified
External shortage
Contraints
43. 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
Onventory management
Purchase costs
Psychic stock
44. 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
Hurdle rate
Anticipation stock (seasonal stock)
Driving force behind the flow
Pipeline stock
45. Single order vs repetitive order
Repetiveness
Major components of inventory carrying cost
Time Factor
Order cost or set up cost
46. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
The categorization of inventory by the purpose that it serves
Functional classifications
Functional factors to explain why inventory exists
Demands
47. 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/materials manager
Second phase
Inventory carrying cost
Decoupling stock
48. Usually a firm's largest expenditure
Material costs
Working stock (cycle stock)
Types of inventory
Anticipation stock (seasonal stock)
49. Demands - replenishments - - constraints - and costs
Properties of inventory
Purchasing discounts
Costs
Onventory management
50. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Classification of Inventory item
Supplies inventory
Sub goals of inventory management
Inventory risk cost