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






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






3. 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






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






5. Display inventory carried to increase product visibility stimulate demand






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






7. Constant vs variable






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






9. Single order vs repetitive order






10. 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






11. 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






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






13. 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






14. Often everybody's concern - but nones responsibility






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






16. Sacrificed in exchange for buying needed machines






17. 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






18. Constant vs variable - independent vs dependent






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






20. Usually a firm's largest expenditure






21. 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)






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






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






24. Internal vs external






25. Customers demand for finished goods






26. 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






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






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






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






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






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






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






33. 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)






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






35. Time factor - discontinuity factor - uncertainty factor - economy factor






36. 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






37. Have most complex and difficult inventory problems






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






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






40. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative - usually the largest component of the inventory carrying cost - usually set to the value of the firms






41. 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






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






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






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






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






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






47. 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






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






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






50. Demands - replenishments - - constraints - and costs







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