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