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






2. 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






3. 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






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






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






6. 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






7. 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)






8. 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






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






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






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






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






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






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






15. Usually a firm's largest expenditure






16. Sacrificed in exchange for buying needed machines






17. 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)






18. 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






19. 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






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






21. Demands - replenishments - - constraints - and costs






22. Customers demand for finished goods






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






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






25. 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)






26. Time factor - discontinuity factor - uncertainty factor - economy factor






27. 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






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






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






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






31. Internal vs external






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






33. Constant vs variable - independent vs dependent






34. 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






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






36. 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






37. 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






38. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper






39. Display inventory carried to increase product visibility stimulate demand






40. Demands - replenishments - constraints - and costs






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






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






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






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






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






47. Single order vs repetitive order






48. 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






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






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







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