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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. It takes time to make a product - but consumers want them on demand
Benefits of inventory/material manager
Time Factor
Raw Materials Inventory
Stock out costs
2. 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
Third phase
Inventory carrying cost
Inventory holding costs
Finished Goods Inventory
3. Supplies - raw materials - in-processed goods - finished goods
Inventory
Types of inventory
Onventory management
Raw Materials Inventory
4. Those cost that vary with the amount of inventory in the short run
Storage space
Inventory management
Reasons why inventory exists
Discontinuity Factor
5. Time factor - discontinuity factor - uncertainty factor - and economic factor
The categorization of inventory by reasons for its existence
Responsibility
Classifying inventory problems
The categorization of inventory by the purpose that it serves
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
Basic types of inventory
Stock out costs
Storage space costs
7. 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
Material costs
In-Proccess Goods
Inventory flow
8. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Growing companies
Repetiveness
The categorization of inventory by the purpose that it serves
How are inventory problems classified
9. Gives firms a competitive advantage due to lower costs and greater flexibility
Finished Goods Inventory
Type of lead time
Less inventory
Material costs
10. Allows one part of the system to be isolated from the next
Uncertainty Factors
Repetiveness
Growing companies
Decoupling stock
11. 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)
Retailers - wholesalers - and distributors
Inventory flow
Costs
Different departments in a firm
12. 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
Types of inventory costs
Pipeline stock
Internal shortage
Demands
13. Constant vs variable
Type of lead time
Safety stock (buffer stock)
Capital cost
Responsibility
14. 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
Inventory risk cost
Responsibility
Raw Materials Inventory
Inventory flow
15. Time factor - discontinuity factor - uncertainty factor - economy factor
Reasons why inventory exists
Functional factors to explain why inventory exists
Major components of inventory carrying cost
Finished Goods Inventory
16. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Uncertainty Factors
Third phase
Supplies inventory
Hurdle rate
17. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Demands
Supplies inventory
Type of lead time
Contraints
18. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
The categorization of inventory by the purpose that it serves
Demands
Economic Factors
19. 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
Cost accumulation
Second phase
Inventory service cost
Growing companies
20. Perpetual vs periodic
Supplies inventory
Inventory management
Type of inventory system
Purchase costs
21. 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
Replenishments
Inventory management
Problems become more complex
Inventory/materials manager
22. Usually a firm's largest expenditure
Material costs
Manufacturers
Inventory management
Type of inventory system
23. Demands - replenishments - constraints - and costs
Inventory
Major properties of inventory
Psychic stock
Type of inventory system
24. 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)
In-Proccess Goods
Stock out costs
Purchase costs
Basic types of inventory
25. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Costs
Problems become more complex
Classifying inventory problems
Internal shortage
26. Often everybody's concern - but nones responsibility
Inventory
Replenishments
Inventory service cost
Onventory management
27. Customers demand for finished goods
Storage space
Second phase
Raw Materials Inventory
Driving force behind the flow
28. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Classification of Inventory item
Replenishments
Repetiveness
Basic types of inventory
29. 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
Classification of Inventory item
Second phase
Inventory holding costs
Psychic stock
30. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Uncertainty Factors
Onventory management
Types of inventory costs
Consumption
31. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Basic types of inventory
Decoupling stock
Major components of inventory carrying cost
32. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Cost accumulation
Hurdle rate
Purchase costs
Working stock (cycle stock)
33. Involves controlling the flow of materials into and out of a system - a big timing problem
The categorization of inventory by reasons for its existence
Second phase
Inventory management
Less inventory
34. 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
Anticipation stock (seasonal stock)
The categorization of inventory by reasons for its existence
In-Proccess Goods
Uncertainty Factors
35. Internal vs external
Psychic stock
Inventory risk cost
Source of supply
The categorization of inventory by the purpose that it serves
36. Supplies - raw materials - in process goods - and finished goods
Problems become more complex
Types of inventory
Inventory carrying cost
Basic types of inventory
37. One firms finished goods may be another firms supplies or raw materials
Classification of Inventory item
Supplies inventory
Hurdle rate
External shortage
38. Sacrificed in exchange for buying needed machines
Purchasing discounts
Additional phases
Working stock (cycle stock)
Major components of inventory carrying cost
39. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Repetiveness
Uncertainty Factors
Less inventory
Major properties of inventory
40. Constant vs variable - independent vs dependent
Goals of inventory management
Type of demand
Consumption
Inventory risk cost
41. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Responsibility
Second phase
Type of demand
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
The categorization of inventory by reasons for its existence
Cost accumulation
Discontinuity Factor
Working stock (cycle stock)
43. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Inventory
Hurdle rate
Inventory risk cost
Different departments in a firm
44. Display inventory carried to increase product visibility stimulate demand
Type of inventory system
Less inventory
Repetiveness
Psychic stock
45. Associated insurance cost - associated taxes
Types of inventory costs
Major properties of inventory
Working stock (cycle stock)
Inventory service cost
46. 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)
Inventory service cost
Major properties of inventory
Inventory management
Classifying inventory problems
47. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Sub goals of inventory management
Order cost or set up cost
Functional classifications
Functional factors to explain why inventory exists
48. Run out of material or supplies - production stopping - deadlines not met
Order cost or set up cost
Inventory risk cost
The categorization of inventory by the purpose that it serves
Internal shortage
49. As you move up in the supply chain...
Problems become more complex
Inventory service cost
Working stock (cycle stock)
The categorization of inventory by reasons for its existence
50. Often short on cash because what little they have they devote to growth
Growing companies
Inventory flow
Consumption
Inventory management