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. 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






2. Demands - replenishments - - constraints - and costs






3. 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






4. Constant vs variable






5. Internal vs external






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






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






8. 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






9. Have most complex and difficult inventory problems






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






11. 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






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






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






14. Minimum rate of return expected on new investments






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






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






17. Constant vs variable - independent vs dependent






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






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






21. 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)






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






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






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






25. Time factor - discontinuity factor - uncertainty factor - economy factor






26. Associated insurance cost - associated taxes






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






28. Demands - replenishments - constraints - and costs






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






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






31. 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






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






33. Display inventory carried to increase product visibility stimulate demand






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






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






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






37. Perpetual vs periodic






38. 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)






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






40. 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






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






42. 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






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






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






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






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






47. 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






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






49. Customers demand for finished goods






50. Usually a firm's largest expenditure