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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. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Repetiveness
Decoupling stock
In-Proccess Goods
Inventory risk cost
2. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Functional classifications
Capital costs (opportunity costs)
Initial phase of inventory flow
Third phase
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
Replenishments
Storage space
Safety stock (buffer stock)
Inventory holding costs
4. 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
Storage space costs
Capital costs (opportunity costs)
Additional phases
Storage space
5. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Consumption
Benefits of inventory/material manager
Goals of inventory management
Repetiveness
6. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
In-Proccess Goods
Types of inventory costs
Properties of inventory
Type of inventory system
7. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Inventory carrying cost
Supplies inventory
Contraints
The categorization of inventory by the purpose that it serves
8. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Consumption
Time Factor
Replenishments
Economic Factors
9. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Additional phases
Goals of inventory management
Initial phase of inventory flow
Classifying inventory problems
10. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
Internal shortage
Inventory carrying cost
Functional classifications
11. Run out of material or supplies - production stopping - deadlines not met
Supplies inventory
Internal shortage
Capital costs (opportunity costs)
Replenishments
12. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Different departments in a firm
Safety stock (buffer stock)
Basic types of inventory
How are inventory problems classified
13. Minimum rate of return expected on new investments
Responsibility
Sub goals of inventory management
Hurdle rate
Driving force behind the flow
14. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Types of inventory
How are inventory problems classified
Onventory management
Internal shortage
15. 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
Pipeline stock
Benefits of inventory/material manager
Inventory risk cost
Inventory/materials manager
16. 1) difficulties in synchronizing supply and demand (supply and demand often differ in the rates at which they provide and require stock) 2) material-related operations take time (goods cannot be produced the instant demand occurs)
Economic Factors
Reasons why inventory exists
Storage space costs
Major properties of inventory
17. Sacrificed in exchange for buying needed machines
Responsibility
Purchasing discounts
Inventory holding costs
Finished Goods Inventory
18. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Psychic stock
Economic Factors
The categorization of inventory by reasons for its existence
Classifying inventory problems
19. Supplies - raw materials - in-processed goods - finished goods
Inventory/materials manager
Major components of inventory carrying cost
Types of inventory
Internal shortage
20. One firms finished goods may be another firms supplies or raw materials
Additional phases
Classification of Inventory item
Storage space
Contraints
21. Demands - replenishments - - constraints - and costs
Basic types of inventory
Major components of inventory carrying cost
Sub goals of inventory management
Properties of inventory
22. Often everybody's concern - but nones responsibility
Functional classifications
Basic types of inventory
Growing companies
Onventory management
23. As you move up in the supply chain...
Retailers - wholesalers - and distributors
Goals of inventory management
Problems become more complex
Basic types of inventory
24. Perpetual vs periodic
Type of inventory system
Working stock (cycle stock)
Raw Materials Inventory
Inventory holding costs
25. 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
Reasons why inventory exists
Inventory/materials manager
Purchase costs
Costs
26. 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
Benefits of inventory/material manager
Demands
Order cost or set up cost
Additional phases
27. 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
Stock out costs
Initial phase of inventory flow
Inventory management
Major components of inventory carrying cost
28. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Inventory risk cost
Types of inventory
Contraints
Onventory management
29. 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)
Growing companies
Initial phase of inventory flow
Purchase costs
Anticipation stock (seasonal stock)
30. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Manufacturers
Working stock (cycle stock)
Order cost or set up cost
Types of inventory costs
31. Allows one part of the system to be isolated from the next
Type of demand
Decoupling stock
Internal shortage
The categorization of inventory by the purpose that it serves
32. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Inventory carrying cost
Retailers - wholesalers - and distributors
The categorization of inventory by the purpose that it serves
33. Have most complex and difficult inventory problems
Pipeline stock
Third phase
Manufacturers
Internal shortage
34. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Major components of inventory carrying cost
Supplies inventory
Decoupling stock
Time Factor
35. 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
Source of supply
Raw Materials Inventory
Decoupling stock
The categorization of inventory by reasons for its existence
36. Balance is key - concentration may be on one objective at certain times and on another at other times depending on needs of the firm - company policy should emphasize the need to focus on the total cost to the firm - bad idea to have lots of cash
Cost accumulation
Problems become more complex
Discontinuity Factor
Different departments in a firm
37. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Capital costs (opportunity costs)
Stock out costs
Different departments in a firm
Demands
38. Display inventory carried to increase product visibility stimulate demand
Consumption
Type of inventory system
Types of inventory costs
Psychic stock
39. Supplies - raw materials - in process goods - and finished goods
Source of supply
Basic types of inventory
Finished Goods Inventory
Inventory risk cost
40. Gives firms a competitive advantage due to lower costs and greater flexibility
How are inventory problems classified
Classifying inventory problems
Classification of Inventory item
Less inventory
41. 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
Major components of inventory carrying cost
Inventory
Economic Factors
Inventory flow
42. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Additional phases
Third phase
Classifying inventory problems
Stock out costs
43. Capital costs - storage space costs - inventory service cost - inventory risk cost
Capital costs (opportunity costs)
Second phase
Major components of inventory carrying cost
Inventory risk cost
44. 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
Material costs
Stock out costs
Classification of Inventory item
Inventory carrying cost
45. Cost of obsolescence - damage cost - shrinkage (theft) cost
Source of supply
Inventory risk cost
The categorization of inventory by the purpose that it serves
Retailers - wholesalers - and distributors
46. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
Order cost or set up cost
Less inventory
Inventory management
Inventory service cost
47. 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 service cost
Purchasing discounts
Costs
Material costs
48. Those cost that vary with the amount of inventory in the short run
Inventory management
Storage space
Different departments in a firm
Consumption
49. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Manufacturers
Finished Goods Inventory
Supplies inventory
Demands
50. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
The categorization of inventory by the purpose that it serves
Retailers - wholesalers - and distributors
Purchasing discounts
Initial phase of inventory flow