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






2. Time factor - discontinuity factor - uncertainty factor - economy factor






3. Demands - replenishments - constraints - and costs






4. Sacrificed in exchange for buying needed machines






5. 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)






6. 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






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






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






9. Display inventory carried to increase product visibility stimulate demand






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






11. Single order vs repetitive order






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






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






14. Constant vs variable






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






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






17. Demands - replenishments - - constraints - and costs






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






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






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. 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






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






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






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






25. 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






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






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






28. 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






29. 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






30. 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






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






32. Associated insurance cost - associated taxes






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






34. 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






35. 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)






36. Often everybody's concern - but nones responsibility






37. Allows one part of the system to be isolated from the next






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






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






40. 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






41. 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






42. Minimum rate of return expected on new investments






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






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






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






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






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






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






49. 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






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