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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. 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)
Inventory management
Classification of Inventory item
Sub goals of inventory management
Costs
2. 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
Stock out costs
Inventory risk cost
Order cost or set up cost
Inventory/materials manager
3. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Safety stock (buffer stock)
Demands
Second phase
4. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Type of lead time
Classifying inventory problems
In-Proccess Goods
Capital cost
5. Supplies - raw materials - in-processed goods - finished goods
Inventory risk cost
Inventory management
Types of inventory
Inventory holding costs
6. Involves controlling the flow of materials into and out of a system - a big timing problem
Capital cost
Inventory
Material costs
Inventory management
7. Allows one part of the system to be isolated from the next
Functional classifications
Initial phase of inventory flow
Decoupling stock
Material costs
8. Cost of obsolescence - damage cost - shrinkage (theft) cost
Type of inventory system
Inventory risk cost
Raw Materials Inventory
Storage space
9. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
In-Proccess Goods
Capital cost
Storage space
Stock out costs
10. Minimum rate of return expected on new investments
Hurdle rate
Additional phases
Functional classifications
How are inventory problems classified
11. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Less inventory
Replenishments
Purchase costs
12. 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
Type of lead time
Raw Materials Inventory
Less inventory
Storage space costs
13. Externally (aka supply line inventory)-orders place but not yet received (orders being processed and orders in transit) - internally-work in progress - reasons for carrying: time/distance - work in process inventory
Cost accumulation
Inventory risk cost
Pipeline stock
Discontinuity Factor
14. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Discontinuity Factor
Functional classifications
Inventory risk cost
Uncertainty Factors
15. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Retailers - wholesalers - and distributors
Internal shortage
Major components of inventory carrying cost
Inventory management
16. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Pipeline stock
Manufacturers
Different departments in a firm
Economic Factors
17. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Type of inventory system
The categorization of inventory by reasons for its existence
Functional factors to explain why inventory exists
Goals of inventory management
18. 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
Goals of inventory management
In-Proccess Goods
Initial phase of inventory flow
Working stock (cycle stock)
19. Demands - replenishments - constraints - and costs
Inventory management
Types of inventory
Major properties of inventory
Less inventory
20. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Inventory risk cost
Functional classifications
Uncertainty Factors
How are inventory problems classified
21. Time factor - discontinuity factor - uncertainty factor - and economic factor
Functional classifications
Sub goals of inventory management
Inventory/materials manager
The categorization of inventory by reasons for its existence
22. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Onventory management
Repetiveness
Third phase
Source of supply
23. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Functional factors to explain why inventory exists
Types of inventory
How are inventory problems classified
Supplies inventory
24. Internal vs external
Source of supply
Benefits of inventory/material manager
Inventory/materials manager
Classifying inventory problems
25. 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
Purchase costs
Cost accumulation
Pipeline stock
Classification of Inventory item
26. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Reasons why inventory exists
Anticipation stock (seasonal stock)
Inventory carrying cost
Retailers - wholesalers - and distributors
27. Capital costs - storage space costs - inventory service cost - inventory risk cost
Demands
Major components of inventory carrying cost
The categorization of inventory by reasons for its existence
Pipeline stock
28. Single order vs repetitive order
Inventory risk cost
Types of inventory costs
Type of demand
Repetiveness
29. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Time Factor
Classifying inventory problems
Storage space costs
Inventory management
30. 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
Economic Factors
Stock out costs
Material costs
Inventory holding costs
31. As you move up in the supply chain...
Problems become more complex
Inventory carrying cost
Manufacturers
How are inventory problems classified
32. Often everybody's concern - but nones responsibility
Sub goals of inventory management
Internal shortage
Onventory management
Classifying inventory problems
33. 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
Inventory
Functional classifications
Retailers - wholesalers - and distributors
Functional factors to explain why inventory exists
34. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Capital cost
Less inventory
Additional phases
Stock out costs
35. Often short on cash because what little they have they devote to growth
Growing companies
Benefits of inventory/material manager
Pipeline stock
Supplies inventory
36. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
The categorization of inventory by the purpose that it serves
Economic Factors
Demands
Order cost or set up cost
37. Associated insurance cost - associated taxes
Inventory service cost
Types of inventory
Growing companies
Costs
38. 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
Working stock (cycle stock)
Supplies inventory
Capital costs (opportunity costs)
Manufacturers
39. One firms finished goods may be another firms supplies or raw materials
Less inventory
Classification of Inventory item
Demands
Responsibility
40. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Working stock (cycle stock)
Basic types of inventory
Type of lead time
Inventory service cost
41. Time factor - discontinuity factor - uncertainty factor - economy factor
Retailers - wholesalers - and distributors
Inventory flow
Raw Materials Inventory
Functional factors to explain why inventory exists
42. It takes time to make a product - but consumers want them on demand
Raw Materials Inventory
Time Factor
Properties of inventory
Source of supply
43. Those cost that vary with the amount of inventory in the short run
Sub goals of inventory management
In-Proccess Goods
Inventory management
Storage space
44. Perpetual vs periodic
Type of inventory system
Functional classifications
Benefits of inventory/material manager
Purchase costs
45. Run out of material or supplies - production stopping - deadlines not met
Internal shortage
Time Factor
Inventory risk cost
Inventory
46. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Anticipation stock (seasonal stock)
Inventory
Order cost or set up cost
47. Constant vs variable - independent vs dependent
Inventory risk cost
Type of demand
The categorization of inventory by reasons for its existence
Driving force behind the flow
48. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Additional phases
Hurdle rate
Capital costs (opportunity costs)
External shortage
49. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Classification of Inventory item
Psychic stock
Type of lead time
50. Have most complex and difficult inventory problems
Inventory flow
Decoupling stock
Manufacturers
Material costs