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






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






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






4. Internal vs external






5. Usually a firm's largest expenditure






6. 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






7. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






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






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






10. 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






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






12. 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






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






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






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






16. 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






17. 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






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






19. Single order vs repetitive order






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






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






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






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






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






25. Sacrificed in exchange for buying needed machines






26. 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






27. Often everybody's concern - but nones responsibility






28. 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






29. Customers demand for finished goods






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






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






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






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






34. Demands - replenishments - - constraints - and costs






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






36. Constant vs variable






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






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






39. Have most complex and difficult inventory problems






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






41. 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)






42. 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






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






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






45. 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






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






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






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






49. 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






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







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