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Test your basic knowledge |
Inventory Management
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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. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Repetiveness
Second phase
Supplies inventory
The categorization of inventory by reasons for its existence
2. 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
Time Factor
Different departments in a firm
Inventory
Hurdle rate
3. 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)
Goals of inventory management
Types of inventory
Growing companies
4. 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
Cost accumulation
Stock out costs
Growing companies
Classifying inventory problems
5. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Additional phases
The categorization of inventory by the purpose that it serves
Purchase costs
Functional classifications
6. 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
Second phase
Driving force behind the flow
Inventory management
Less inventory
7. Internal vs external
Source of supply
Capital costs (opportunity costs)
Driving force behind the flow
Finished Goods Inventory
8. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Sub goals of inventory management
Stock out costs
Inventory risk cost
Capital cost
9. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Economic Factors
Capital cost
Type of inventory system
Sub goals of inventory management
10. Customers demand for finished goods
Major properties of inventory
Basic types of inventory
Classification of Inventory item
Driving force behind the flow
11. 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
Inventory management
Stock out costs
Onventory management
Inventory flow
12. One firms finished goods may be another firms supplies or raw materials
Type of demand
Basic types of inventory
Classification of Inventory item
Additional phases
13. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Source of supply
Classification of Inventory item
Capital cost
14. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Finished Goods Inventory
Types of inventory costs
Safety stock (buffer stock)
Anticipation stock (seasonal stock)
15. 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
Discontinuity Factor
How are inventory problems classified
Growing companies
Classifying inventory problems
16. Supplies - raw materials - in-processed goods - finished goods
Types of inventory costs
Types of inventory
The categorization of inventory by the purpose that it serves
Contraints
17. Cost of obsolescence - damage cost - shrinkage (theft) cost
Inventory/materials manager
Initial phase of inventory flow
Inventory risk cost
Discontinuity Factor
18. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Manufacturers
The categorization of inventory by the purpose that it serves
Different departments in a firm
Additional phases
19. 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
Retailers - wholesalers - and distributors
Responsibility
Capital cost
Functional factors to explain why inventory exists
20. 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)
Purchase costs
Inventory management
Hurdle rate
Raw Materials Inventory
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
Goals of inventory management
Working stock (cycle stock)
Repetiveness
Inventory/materials manager
22. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory service cost
Anticipation stock (seasonal stock)
Inventory management
Functional factors to explain why inventory exists
23. Often everybody's concern - but nones responsibility
Safety stock (buffer stock)
Time Factor
Inventory risk cost
Onventory management
24. Associated insurance cost - associated taxes
Inventory service cost
Sub goals of inventory management
Inventory risk cost
Hurdle rate
25. Single order vs repetitive order
Manufacturers
Material costs
Repetiveness
Safety stock (buffer stock)
26. Demands - replenishments - constraints - and costs
Major properties of inventory
Demands
Responsibility
Driving force behind the flow
27. Demands - replenishments - - constraints - and costs
Inventory service cost
External shortage
Properties of inventory
Economic Factors
28. Constant vs variable - independent vs dependent
Hurdle rate
Pipeline stock
Inventory flow
Type of demand
29. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Inventory management
Inventory risk cost
Classifying inventory problems
Discontinuity Factor
30. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Anticipation stock (seasonal stock)
Type of inventory system
Benefits of inventory/material manager
Material costs
31. Display inventory carried to increase product visibility stimulate demand
Order cost or set up cost
Manufacturers
Psychic stock
Type of lead time
32. As you move up in the supply chain...
Raw Materials Inventory
Problems become more complex
Different departments in a firm
Inventory holding costs
33. Time factor - discontinuity factor - uncertainty factor - economy factor
Functional factors to explain why inventory exists
Problems become more complex
Types of inventory costs
Finished Goods Inventory
34. 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
Capital costs (opportunity costs)
Inventory management
Replenishments
Onventory management
35. 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
Inventory service cost
Cost accumulation
Manufacturers
Costs
36. Time factor - discontinuity factor - uncertainty factor - and economic factor
The categorization of inventory by the purpose that it serves
Discontinuity Factor
The categorization of inventory by reasons for its existence
Raw Materials Inventory
37. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Benefits of inventory/material manager
Raw Materials Inventory
Storage space costs
Replenishments
38. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Inventory service cost
Safety stock (buffer stock)
Cost accumulation
39. 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
Additional phases
Types of inventory costs
Raw Materials Inventory
In-Proccess Goods
40. 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
Inventory holding costs
Problems become more complex
Type of demand
Goals of inventory management
41. 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)
Purchasing discounts
In-Proccess Goods
Responsibility
Reasons why inventory exists
42. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Second phase
External shortage
Additional phases
Classification of Inventory item
43. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Replenishments
How are inventory problems classified
Storage space costs
Types of inventory
44. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory risk cost
Purchase costs
Additional phases
Growing companies
45. Often short on cash because what little they have they devote to growth
Inventory risk cost
Growing companies
Storage space
Inventory service cost
46. Gives firms a competitive advantage due to lower costs and greater flexibility
Driving force behind the flow
Less inventory
Consumption
Inventory risk cost
47. 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
Sub goals of inventory management
External shortage
Material costs
Inventory service cost
48. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Internal shortage
Onventory management
Inventory carrying cost
In-Proccess Goods
49. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Capital costs (opportunity costs)
Sub goals of inventory management
Working stock (cycle stock)
Inventory service cost
50. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Inventory management
Inventory/materials manager
Second phase