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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. One firms finished goods may be another firms supplies or raw materials






2. Single order vs repetitive order






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






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






5. 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






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






7. Internal vs external






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






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






10. 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)






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






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






13. 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






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






15. 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






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






17. Customers demand for finished goods






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






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






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






21. Usually a firm's largest expenditure






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






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






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






25. 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






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






27. 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






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






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






30. Display inventory carried to increase product visibility stimulate demand






31. 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






32. Associated insurance cost - associated taxes






33. 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)






34. Constant vs variable






35. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply






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






37. 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






38. Have most complex and difficult inventory problems






39. Time factor - discontinuity factor - uncertainty factor - economy factor






40. 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






41. Constant vs variable - independent vs dependent






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






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






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






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






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






47. 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)






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






49. 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






50. 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






Can you answer 50 questions in 15 minutes?



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