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Test your basic knowledge |
Inventory Management
Start Test
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. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Capital cost
Major properties of inventory
External shortage
The categorization of inventory by reasons for its existence
2. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Internal shortage
Supplies inventory
Major components of inventory carrying cost
Inventory holding costs
3. Allows one part of the system to be isolated from the next
Contraints
Finished Goods Inventory
Driving force behind the flow
Decoupling stock
4. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Supplies inventory
Inventory service cost
Contraints
Initial phase of inventory flow
5. 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
Onventory management
Inventory/materials manager
6. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Goals of inventory management
Hurdle rate
Functional classifications
Psychic stock
7. Sacrificed in exchange for buying needed machines
Uncertainty Factors
Psychic stock
Purchasing discounts
Reasons why inventory exists
8. Minimum rate of return expected on new investments
Inventory carrying cost
Hurdle rate
Decoupling stock
Different departments in a firm
9. It takes time to make a product - but consumers want them on demand
Pipeline stock
Supplies inventory
Time Factor
Costs
10. 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
Purchase costs
Inventory carrying cost
The categorization of inventory by the purpose that it serves
Less inventory
11. One firms finished goods may be another firms supplies or raw materials
Onventory management
Anticipation stock (seasonal stock)
Type of demand
Classification of Inventory item
12. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Onventory management
Internal shortage
Replenishments
Safety stock (buffer stock)
13. Time factor - discontinuity factor - uncertainty factor - economy factor
Replenishments
Driving force behind the flow
Functional factors to explain why inventory exists
Purchase costs
14. Customers demand for finished goods
Initial phase of inventory flow
Consumption
Driving force behind the flow
Anticipation stock (seasonal stock)
15. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Anticipation stock (seasonal stock)
Contraints
In-Proccess Goods
16. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Additional phases
Problems become more complex
Purchasing discounts
Working stock (cycle stock)
17. Run out of material or supplies - production stopping - deadlines not met
Purchase costs
Demands
Different departments in a firm
Internal shortage
18. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Order cost or set up cost
Consumption
External shortage
19. Involves controlling the flow of materials into and out of a system - a big timing problem
Supplies inventory
External shortage
Inventory management
Storage space costs
20. Constant vs variable - independent vs dependent
Inventory holding costs
Inventory flow
Functional classifications
Type of demand
21. 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
Supplies inventory
Functional factors to explain why inventory exists
Reasons why inventory exists
22. Usually a firm's largest expenditure
Second phase
Supplies inventory
Material costs
How are inventory problems classified
23. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Consumption
Retailers - wholesalers - and distributors
Inventory
Inventory management
24. The economic consequences of an internal or external shortage - vary greatly between items and customers - very difficult to estimate - most firms avoid messing with this by specifying customer service levels
Hurdle rate
Classification of Inventory item
Benefits of inventory/material manager
Stock out costs
25. 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
Storage space
Inventory
Retailers - wholesalers - and distributors
Functional factors to explain why inventory exists
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)
Basic types of inventory
Driving force behind the flow
Inventory management
Purchase costs
27. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Contraints
Uncertainty Factors
Second phase
Type of lead time
28. Supplies - raw materials - in-processed goods - finished goods
Hurdle rate
Types of inventory
External shortage
Different departments in a firm
29. Gives firms a competitive advantage due to lower costs and greater flexibility
Less inventory
Replenishments
Inventory
Inventory risk cost
30. As you move up in the supply chain...
Uncertainty Factors
Problems become more complex
Purchasing discounts
Psychic stock
31. 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
Economic Factors
Cost accumulation
Decoupling stock
Internal shortage
32. Demands - replenishments - - constraints - and costs
Properties of inventory
Time Factor
Benefits of inventory/material manager
Anticipation stock (seasonal stock)
33. 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
Initial phase of inventory flow
Inventory management
In-Proccess Goods
Safety stock (buffer stock)
34. 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
Anticipation stock (seasonal stock)
Demands
Contraints
35. Often short on cash because what little they have they devote to growth
Inventory/materials manager
How are inventory problems classified
Responsibility
Growing companies
36. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Less inventory
Economic Factors
In-Proccess Goods
Responsibility
37. Constant vs variable
Type of lead time
The categorization of inventory by the purpose that it serves
Discontinuity Factor
Type of demand
38. 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
Classification of Inventory item
Safety stock (buffer stock)
Responsibility
Purchasing discounts
39. 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
Economic Factors
Less inventory
Inventory service cost
Inventory holding costs
40. Cost of obsolescence - damage cost - shrinkage (theft) cost
Stock out costs
Storage space costs
Capital cost
Inventory risk cost
41. 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
Capital costs (opportunity costs)
Inventory management
Type of inventory system
Sub goals of inventory management
42. 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
Functional factors to explain why inventory exists
Inventory flow
Inventory risk cost
Type of demand
43. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Goals of inventory management
Classifying inventory problems
External shortage
Purchasing discounts
44. Demands - replenishments - constraints - and costs
Major properties of inventory
External shortage
Inventory risk cost
Functional factors to explain why inventory exists
45. 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
Demands
Sub goals of inventory management
Less inventory
Raw Materials Inventory
46. Have most complex and difficult inventory problems
Additional phases
Manufacturers
Purchase costs
The categorization of inventory by the purpose that it serves
47. 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)
Reasons why inventory exists
Capital cost
Inventory risk cost
Purchase costs
48. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
The categorization of inventory by the purpose that it serves
Type of lead time
Classifying inventory problems
Inventory management
49. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Raw Materials Inventory
Goals of inventory management
Storage space costs
Inventory
50. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Contraints
Inventory risk cost
Benefits of inventory/material manager
Discontinuity Factor