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. 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)






2. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house






3. Internal vs external






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






5. 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






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






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






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






9. 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






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






11. 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






12. 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)






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






14. Usually a firm's largest expenditure






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






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






17. Often everybody's concern - but nones responsibility






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






19. Capital costs - storage space costs - inventory service cost - inventory risk cost






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






21. Demands - replenishments - - constraints - and costs






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






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






24. 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






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






26. Constant vs variable - independent vs dependent






27. 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






28. Display inventory carried to increase product visibility stimulate demand






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






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






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






32. Constant vs variable






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






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






35. 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






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






37. 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






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






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






40. 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






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






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






43. 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






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






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






46. Demands - replenishments - constraints - and costs






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






48. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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