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. Gives firms a competitive advantage due to lower costs and greater flexibility






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






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






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






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. 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






7. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






8. Internal vs external






9. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)






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






11. Have most complex and difficult inventory problems






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






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. Constant vs variable - independent vs dependent






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






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






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






18. Supplies - raw materials - in-processed goods - finished goods






19. Minimum rate of return expected on new investments






20. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house






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






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






23. 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






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






25. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative






26. Usually a firm's largest expenditure






27. 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)






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






29. Time factor - discontinuity factor - uncertainty factor - economy factor






30. 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






31. Often everybody's concern - but nones responsibility






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






33. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)






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






35. Single order vs repetitive order






36. Perpetual vs periodic






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






38. Capital costs - storage space costs - inventory service cost - inventory risk cost






39. 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






40. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another






41. Demands - replenishments - - constraints - and costs






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






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






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






45. Run out of material or supplies - production stopping - deadlines not met






46. 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)






47. Demands - replenishments - constraints - and costs






48. Customers demand for finished goods






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






50. Sacrificed in exchange for buying needed machines