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






2. 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






3. 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)






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






5. 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






6. Single order vs repetitive order






7. Often everybody's concern - but nones responsibility






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






9. Perpetual vs periodic






10. Minimum rate of return expected on new investments






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






12. 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






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






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






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






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






17. Demands - replenishments - constraints - and costs






18. 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






19. Display inventory carried to increase product visibility stimulate demand






20. 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






21. Constant vs variable - independent vs dependent






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






23. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another






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






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






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






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






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






29. 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






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






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






32. 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






33. 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






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






35. 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






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






37. 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)






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






39. Usually a firm's largest expenditure






40. 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






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






42. Customers demand for finished goods






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






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






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






46. Associated insurance cost - associated taxes






47. 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)






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






49. Constant vs variable






50. Units taken from inventory - can be categorized by: 1) size (magnitude/quality - constant vs variable and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be