Test your basic knowledge |

Inventory Management

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. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






2. Time factor - discontinuity factor - uncertainty factor - and economic factor






3. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






4. Demands - replenishments - constraints - and costs






5. 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






6. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability






7. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation






8. As you move up in the supply chain...






9. 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






10. Protection from the unexpected (forecast errors - break downs - strikes - disasters)






11. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost






12. Internal vs external






13. 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)






14. It takes time to make a product - but consumers want them on demand






15. 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






16. Final product - available for storage - distribution - or sale; isolate the customer from the producer






17. 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






18. Usually a firm's largest expenditure






19. 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






20. Supplies - raw materials - in process goods - and finished goods






21. Associated insurance cost - associated taxes






22. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)






23. 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






24. Allows one part of the system to be isolated from the next






25. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock






26. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions






27. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock






28. Often short on cash because what little they have they devote to growth






29. Sacrificed in exchange for buying needed machines






30. Have most complex and difficult inventory problems






31. Cost of obsolescence - damage cost - shrinkage (theft) cost






32. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






33. Minimum rate of return expected on new investments






34. Those cost that vary with the amount of inventory in the short run






35. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use






36. 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)






37. 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






38. Involves controlling the flow of materials into and out of a system - a big timing problem






39. 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






40. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory






41. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production






42. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods






43. Perpetual vs periodic






44. Repetiveness - source of supply - type of demand - type of lead time - type of inventory






45. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






46. Customers demand for finished goods






47. A customers order cannot be met - backorder costs - present profit loss - future profit loss






48. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system






49. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost






50. Constant vs variable - independent vs dependent