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






2. Often everybody's concern - but nones responsibility






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






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






5. Demands - replenishments - - constraints - and costs






6. 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






7. Minimum rate of return expected on new investments






8. 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






9. 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)






10. Sacrificed in exchange for buying needed machines






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






12. 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)






13. 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






14. 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






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






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






17. Associated insurance cost - associated taxes






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






19. 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






20. Demands - replenishments - constraints - and costs






21. 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






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






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






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






25. Single order vs repetitive order






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






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






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






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






30. 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






31. 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)






32. Usually a firm's largest expenditure






33. Supplies - raw materials - in-processed goods - finished goods






34. 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






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






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






38. 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






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. 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






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






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






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






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






45. Constant vs variable






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






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






48. 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






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






50. Constant vs variable - independent vs dependent