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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. Often everybody's concern - but nones responsibility
Onventory management
Initial phase of inventory flow
Storage space costs
Material costs
2. Constant vs variable
Replenishments
Different departments in a firm
Inventory service cost
Type of lead time
3. Have most complex and difficult inventory problems
Less inventory
Type of inventory system
Uncertainty Factors
Manufacturers
4. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Finished Goods Inventory
Classifying inventory problems
Inventory management
Responsibility
5. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Storage space costs
Cost accumulation
Different departments in a firm
Raw Materials Inventory
6. 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
Major properties of inventory
Stock out costs
Pipeline stock
Properties of inventory
7. 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
Pipeline stock
Repetiveness
Purchasing discounts
Finished Goods Inventory
8. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Driving force behind the flow
Hurdle rate
Working stock (cycle stock)
Initial phase of inventory flow
9. 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 flow
Type of inventory system
Hurdle rate
Responsibility
10. Demands - replenishments - - constraints - and costs
The categorization of inventory by the purpose that it serves
Driving force behind the flow
Properties of inventory
Second phase
11. 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
Properties of inventory
Growing companies
Inventory holding costs
Discontinuity Factor
12. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
The categorization of inventory by reasons for its existence
Economic Factors
Hurdle rate
Types of inventory
13. Run out of material or supplies - production stopping - deadlines not met
Capital costs (opportunity costs)
Stock out costs
Inventory/materials manager
Internal shortage
14. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Type of demand
Working stock (cycle stock)
Benefits of inventory/material manager
Safety stock (buffer stock)
15. Sacrificed in exchange for buying needed machines
Goals of inventory management
Sub goals of inventory management
Second phase
Purchasing discounts
16. Single order vs repetitive order
Repetiveness
Inventory risk cost
Properties of inventory
Stock out costs
17. Supplies - raw materials - in process goods - and finished goods
Inventory service cost
Inventory management
Less inventory
Basic types of inventory
18. Gives firms a competitive advantage due to lower costs and greater flexibility
Inventory management
Purchase costs
Working stock (cycle stock)
Less inventory
19. Those cost that vary with the amount of inventory in the short run
Properties of inventory
Material costs
Storage space
Sub goals of inventory management
20. 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)
Basic types of inventory
Additional phases
Costs
In-Proccess Goods
21. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Inventory risk cost
Sub goals of inventory management
Pipeline stock
Types of inventory costs
22. Time factor - discontinuity factor - uncertainty factor - economy factor
Type of inventory system
Inventory management
Inventory flow
Functional factors to explain why inventory exists
23. 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)
Internal shortage
Reasons why inventory exists
External shortage
Type of demand
24. 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
Time Factor
Anticipation stock (seasonal stock)
Pipeline stock
Inventory management
25. Time factor - discontinuity factor - uncertainty factor - and economic factor
External shortage
Source of supply
The categorization of inventory by reasons for its existence
Inventory risk cost
26. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Replenishments
Type of lead time
Retailers - wholesalers - and distributors
Time Factor
27. 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)
Retailers - wholesalers - and distributors
Material costs
Inventory service cost
Discontinuity Factor
28. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory management
Reasons why inventory exists
Major properties of inventory
Raw Materials Inventory
29. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Stock out costs
Third phase
Psychic stock
30. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Functional factors to explain why inventory exists
Finished Goods Inventory
Supplies inventory
Initial phase of inventory flow
31. 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
In-Proccess Goods
The categorization of inventory by the purpose that it serves
Psychic stock
Initial phase of inventory flow
32. Customers demand for finished goods
Driving force behind the flow
Time Factor
Demands
Types of inventory
33. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Consumption
Properties of inventory
In-Proccess Goods
Capital cost
34. 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
Cost accumulation
Driving force behind the flow
Type of lead time
35. Cost of obsolescence - damage cost - shrinkage (theft) cost
Inventory risk cost
Initial phase of inventory flow
Purchasing discounts
Demands
36. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Capital cost
Goals of inventory management
Demands
Type of inventory system
37. 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
Time Factor
Capital costs (opportunity costs)
Inventory management
Classification of Inventory item
38. 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)
Purchase costs
Major properties of inventory
Problems become more complex
Cost accumulation
39. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
Benefits of inventory/material manager
Type of inventory system
Driving force behind the flow
40. Constant vs variable - independent vs dependent
Anticipation stock (seasonal stock)
Reasons why inventory exists
Type of demand
Contraints
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
Inventory
Type of inventory system
Reasons why inventory exists
Storage space costs
42. Associated insurance cost - associated taxes
Manufacturers
Third phase
Raw Materials Inventory
Inventory service cost
43. Usually a firm's largest expenditure
Material costs
External shortage
Capital costs (opportunity costs)
Stock out costs
44. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Material costs
Replenishments
Inventory service cost
Demands
45. 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
Types of inventory
Responsibility
Storage space
Inventory service cost
46. It takes time to make a product - but consumers want them on demand
Major components of inventory carrying cost
Time Factor
Classification of Inventory item
Less inventory
47. 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
Third phase
Capital costs (opportunity costs)
Inventory service cost
Demands
48. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Inventory management
How are inventory problems classified
Type of lead time
Capital cost
49. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Inventory management
Retailers - wholesalers - and distributors
Functional factors to explain why inventory exists
50. One firms finished goods may be another firms supplies or raw materials
Inventory
Internal shortage
Classification of Inventory item
Finished Goods Inventory