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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. 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
The categorization of inventory by the purpose that it serves
Consumption
Inventory risk cost
2. As you move up in the supply chain...
Sub goals of inventory management
Problems become more complex
Inventory service cost
In-Proccess Goods
3. 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
How are inventory problems classified
Anticipation stock (seasonal stock)
Pipeline stock
Contraints
4. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Demands
Storage space
Repetiveness
Contraints
5. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Safety stock (buffer stock)
Retailers - wholesalers - and distributors
Source of supply
Time Factor
6. 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)
Consumption
Contraints
Reasons why inventory exists
Functional factors to explain why inventory exists
7. Often short on cash because what little they have they devote to growth
Type of lead time
Purchasing discounts
Cost accumulation
Growing companies
8. 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
Costs
Inventory holding costs
Goals of inventory management
9. Run out of material or supplies - production stopping - deadlines not met
Benefits of inventory/material manager
Internal shortage
Properties of inventory
Inventory service cost
10. Internal vs external
Purchasing discounts
Source of supply
Uncertainty Factors
Retailers - wholesalers - and distributors
11. 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
Consumption
Inventory carrying cost
Second phase
Order cost or set up cost
12. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Capital cost
Repetiveness
Additional phases
13. Single order vs repetitive order
Repetiveness
Cost accumulation
Problems become more complex
Onventory management
14. Constant vs variable - independent vs dependent
Cost accumulation
Inventory risk cost
Contraints
Type of demand
15. Often everybody's concern - but nones responsibility
Onventory management
Types of inventory costs
Inventory flow
Second phase
16. Demands - replenishments - constraints - and costs
Benefits of inventory/material manager
Inventory carrying cost
Major properties of inventory
Inventory holding costs
17. 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
The categorization of inventory by the purpose that it serves
Stock out costs
Cost accumulation
Driving force behind the flow
18. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Driving force behind the flow
Major properties of inventory
The categorization of inventory by the purpose that it serves
How are inventory problems classified
19. 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
Inventory flow
Uncertainty Factors
Functional factors to explain why inventory exists
20. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
How are inventory problems classified
Onventory management
Working stock (cycle stock)
Type of inventory system
21. Have most complex and difficult inventory problems
Functional classifications
Contraints
Manufacturers
Inventory flow
22. 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
Capital costs (opportunity costs)
Inventory/materials manager
Inventory service cost
Storage space
23. 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
Sub goals of inventory management
Problems become more complex
Order cost or set up cost
Repetiveness
24. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Capital cost
Inventory risk cost
Storage space costs
Major properties of inventory
25. 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
Discontinuity Factor
Decoupling stock
Retailers - wholesalers - and distributors
Additional phases
26. 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)
Economic Factors
Functional factors to explain why inventory exists
Source of supply
Purchase costs
27. Usually a firm's largest expenditure
Material costs
Time Factor
Inventory risk cost
Discontinuity Factor
28. One firms finished goods may be another firms supplies or raw materials
Cost accumulation
Order cost or set up cost
Classification of Inventory item
Types of inventory costs
29. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Order cost or set up cost
Benefits of inventory/material manager
Classifying inventory problems
30. 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)
Major properties of inventory
Costs
Goals of inventory management
External shortage
31. 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
Consumption
Inventory risk cost
Inventory holding costs
Contraints
32. Constant vs variable
Functional factors to explain why inventory exists
Type of lead time
Capital costs (opportunity costs)
Inventory service cost
33. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Different departments in a firm
The categorization of inventory by reasons for its existence
Inventory/materials manager
Safety stock (buffer stock)
34. Demands - replenishments - - constraints - and costs
Problems become more complex
Supplies inventory
Material costs
Properties of inventory
35. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Goals of inventory management
In-Proccess Goods
Capital cost
Second phase
36. 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
Raw Materials Inventory
Inventory risk cost
Material costs
Second phase
37. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Third phase
Type of inventory system
Inventory management
External shortage
38. Display inventory carried to increase product visibility stimulate demand
In-Proccess Goods
Classification of Inventory item
Psychic stock
Working stock (cycle stock)
39. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Storage space costs
Classifying inventory problems
Properties of inventory
40. Perpetual vs periodic
Manufacturers
Goals of inventory management
Type of inventory system
Capital costs (opportunity costs)
41. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Psychic stock
Major components of inventory carrying cost
Classifying inventory problems
Less inventory
42. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Hurdle rate
Capital costs (opportunity costs)
How are inventory problems classified
Storage space costs
43. Time factor - discontinuity factor - uncertainty factor - economy factor
Costs
Functional factors to explain why inventory exists
Source of supply
Additional phases
44. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Finished Goods Inventory
Anticipation stock (seasonal stock)
Reasons why inventory exists
Functional factors to explain why inventory exists
45. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
External shortage
Costs
Major components of inventory carrying cost
Inventory risk cost
46. Cost of obsolescence - damage cost - shrinkage (theft) cost
Inventory holding costs
Inventory risk cost
Manufacturers
Third phase
47. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Purchase costs
Second phase
Functional classifications
Supplies inventory
48. It takes time to make a product - but consumers want them on demand
Discontinuity Factor
Time Factor
Problems become more complex
Inventory service cost
49. Those cost that vary with the amount of inventory in the short run
Internal shortage
Capital cost
Storage space
Inventory risk cost
50. Customers demand for finished goods
Driving force behind the flow
In-Proccess Goods
External shortage
Major components of inventory carrying cost