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Test your basic knowledge |
Inventory Management
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Study First
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. Display inventory carried to increase product visibility stimulate demand
Working stock (cycle stock)
Storage space costs
Anticipation stock (seasonal stock)
Psychic stock
2. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Properties of inventory
Economic Factors
Working stock (cycle stock)
Stock out costs
3. Associated insurance cost - associated taxes
Inventory service cost
Internal shortage
Inventory risk cost
Additional phases
4. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Classification of Inventory item
Additional phases
How are inventory problems classified
Replenishments
5. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Second phase
Manufacturers
Less inventory
Uncertainty Factors
6. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Cost accumulation
Goals of inventory management
Third phase
Additional phases
7. 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
Psychic stock
Type of demand
Inventory
Basic types of inventory
8. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Growing companies
Functional factors to explain why inventory exists
Demands
Capital cost
9. 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
Purchase costs
Internal shortage
How are inventory problems classified
Initial phase of inventory flow
10. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Problems become more complex
Classifying inventory problems
Responsibility
Inventory risk cost
11. Have most complex and difficult inventory problems
Hurdle rate
Pipeline stock
Classification of Inventory item
Manufacturers
12. 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
Retailers - wholesalers - and distributors
Consumption
Inventory carrying cost
Capital costs (opportunity costs)
13. Demands - replenishments - - constraints - and costs
Capital costs (opportunity costs)
Inventory risk cost
Growing companies
Properties of inventory
14. 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)
Inventory risk cost
Costs
Functional factors to explain why inventory exists
Economic Factors
15. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Storage space
Additional phases
Cost accumulation
How are inventory problems classified
16. 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
Internal shortage
Basic types of inventory
Third phase
Stock out costs
17. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Supplies inventory
Major components of inventory carrying cost
Inventory holding costs
Inventory flow
18. 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
Inventory holding costs
How are inventory problems classified
Contraints
Consumption
19. Those cost that vary with the amount of inventory in the short run
Goals of inventory management
Types of inventory costs
Storage space
Properties of inventory
20. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Initial phase of inventory flow
Hurdle rate
Onventory management
The categorization of inventory by the purpose that it serves
21. Allows one part of the system to be isolated from the next
Consumption
Type of demand
Purchase costs
Decoupling stock
22. Demands - replenishments - constraints - and costs
External shortage
Major properties of inventory
Additional phases
Types of inventory
23. 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
Costs
The categorization of inventory by reasons for its existence
Pipeline stock
Inventory/materials manager
24. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
How are inventory problems classified
Inventory risk cost
Functional factors to explain why inventory exists
Inventory management
25. Often short on cash because what little they have they devote to growth
Inventory management
Initial phase of inventory flow
Growing companies
Functional classifications
26. 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
Basic types of inventory
Capital costs (opportunity costs)
Goals of inventory management
Decoupling stock
27. Supplies - raw materials - in-processed goods - finished goods
Capital costs (opportunity costs)
Classifying inventory problems
Types of inventory
Sub goals of inventory management
28. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Inventory management
Supplies inventory
Inventory service cost
29. 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
Raw Materials Inventory
Inventory holding costs
Type of inventory system
Types of inventory costs
30. One firms finished goods may be another firms supplies or raw materials
Classification of Inventory item
Purchase costs
Inventory risk cost
Replenishments
31. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Initial phase of inventory flow
Retailers - wholesalers - and distributors
Type of lead time
Working stock (cycle stock)
32. Supplies - raw materials - in process goods - and finished goods
Purchasing discounts
Growing companies
Retailers - wholesalers - and distributors
Basic types of inventory
33. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Safety stock (buffer stock)
In-Proccess Goods
Working stock (cycle stock)
Type of inventory system
34. 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
Cost accumulation
Discontinuity Factor
Inventory risk cost
Second phase
35. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
Capital costs (opportunity costs)
Purchase costs
Uncertainty Factors
36. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Consumption
Purchase costs
Inventory management
37. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Inventory management
Contraints
Psychic stock
Inventory flow
38. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Storage space
Decoupling stock
Type of demand
39. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Storage space costs
Inventory
Second phase
Demands
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
Purchasing discounts
Demands
Anticipation stock (seasonal stock)
Inventory risk cost
41. 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
Inventory management
Internal shortage
Pipeline stock
Basic types of inventory
42. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Working stock (cycle stock)
Second phase
Functional classifications
Order cost or set up cost
43. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Inventory carrying cost
Cost accumulation
Benefits of inventory/material manager
44. Sacrificed in exchange for buying needed machines
Inventory service cost
Finished Goods Inventory
The categorization of inventory by reasons for its existence
Purchasing discounts
45. 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
Discontinuity Factor
Type of demand
Reasons why inventory exists
Inventory management
46. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Material costs
Working stock (cycle stock)
Capital costs (opportunity costs)
47. Usually a firm's largest expenditure
Inventory holding costs
Material costs
Inventory
Source of supply
48. 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
Discontinuity Factor
Inventory service cost
Sub goals of inventory management
Storage space costs
49. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Major components of inventory carrying cost
Internal shortage
Finished Goods Inventory
Pipeline stock
50. Internal vs external
Source of supply
Anticipation stock (seasonal stock)
Demands
Internal shortage