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. 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)






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






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






4. 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






5. 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






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






7. Have most complex and difficult inventory problems






8. 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






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






10. 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)






11. Usually a firm's largest expenditure






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






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






14. 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)






15. 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)






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






17. 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






18. Sacrificed in exchange for buying needed machines






19. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






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






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






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






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






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






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






26. Constant vs variable






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






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






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






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






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






32. Often everybody's concern - but nones responsibility






33. Internal vs external






34. 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






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






36. 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






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






38. Customers demand for finished goods






39. 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






40. Demands - replenishments - constraints - and costs






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






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






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






44. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






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






48. Display inventory carried to increase product visibility stimulate demand






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






50. Single order vs repetitive order