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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. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Raw Materials Inventory
Functional classifications
Working stock (cycle stock)
Decoupling stock
2. 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
Responsibility
Safety stock (buffer stock)
Major properties of inventory
Classifying inventory problems
3. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
External shortage
Benefits of inventory/material manager
Functional classifications
Major properties of inventory
4. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Responsibility
Finished Goods Inventory
Material costs
Order cost or set up cost
5. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Types of inventory
Inventory carrying cost
Storage space costs
Goals of inventory management
6. 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)
Types of inventory costs
Storage space costs
Reasons why inventory exists
Initial phase of inventory flow
7. Associated insurance cost - associated taxes
Decoupling stock
Inventory service cost
Material costs
Internal shortage
8. Allows one part of the system to be isolated from the next
Decoupling stock
Finished Goods Inventory
Inventory holding costs
Additional phases
9. Run out of material or supplies - production stopping - deadlines not met
Psychic stock
Inventory holding costs
Source of supply
Internal shortage
10. 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
Finished Goods Inventory
Uncertainty Factors
Capital costs (opportunity costs)
Order cost or set up cost
11. 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)
Inventory service cost
The categorization of inventory by reasons for its existence
Functional classifications
Purchasing discounts
12. 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
Inventory
Driving force behind the flow
Discontinuity Factor
Pipeline stock
13. 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
Costs
Decoupling stock
Contraints
Inventory carrying cost
14. 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
Classifying inventory problems
Manufacturers
Functional factors to explain why inventory exists
Inventory/materials manager
15. Gives firms a competitive advantage due to lower costs and greater flexibility
Inventory holding costs
Demands
Less inventory
Sub goals of inventory management
16. One firms finished goods may be another firms supplies or raw materials
Different departments in a firm
Second phase
Initial phase of inventory flow
Classification of Inventory item
17. Cost of obsolescence - damage cost - shrinkage (theft) cost
Type of lead time
Inventory risk cost
Decoupling stock
Initial phase of inventory flow
18. Sacrificed in exchange for buying needed machines
Purchasing discounts
Inventory risk cost
Driving force behind the flow
Type of lead time
19. Supplies - raw materials - in-processed goods - finished goods
Inventory management
Types of inventory
How are inventory problems classified
Stock out costs
20. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory/materials manager
Inventory risk cost
Third phase
Inventory flow
21. Often short on cash because what little they have they devote to growth
Raw Materials Inventory
Inventory holding costs
Purchasing discounts
Growing companies
22. Time factor - discontinuity factor - uncertainty factor - and economic factor
Order cost or set up cost
The categorization of inventory by reasons for its existence
Purchase costs
Inventory/materials manager
23. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Psychic stock
How are inventory problems classified
Storage space costs
Major properties of inventory
24. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Time Factor
Costs
Additional phases
Uncertainty Factors
25. Often everybody's concern - but nones responsibility
The categorization of inventory by reasons for its existence
Type of lead time
Onventory management
In-Proccess Goods
26. 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
Onventory management
The categorization of inventory by reasons for its existence
Inventory service cost
Inventory holding costs
27. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Material costs
In-Proccess Goods
Inventory risk cost
Inventory service cost
28. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Supplies inventory
Decoupling stock
Safety stock (buffer stock)
Inventory/materials manager
29. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Less inventory
Retailers - wholesalers - and distributors
Capital cost
Type of demand
30. 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
Anticipation stock (seasonal stock)
Goals of inventory management
Material costs
Demands
31. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Additional phases
Inventory management
The categorization of inventory by the purpose that it serves
Anticipation stock (seasonal stock)
32. 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
Initial phase of inventory flow
Capital cost
Type of demand
Problems become more complex
33. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classification of Inventory item
Psychic stock
Classifying inventory problems
Initial phase of inventory flow
34. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Purchase costs
Types of inventory costs
Inventory management
External shortage
35. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Storage space
Inventory service cost
Economic Factors
Psychic stock
36. Display inventory carried to increase product visibility stimulate demand
Psychic stock
Type of inventory system
Goals of inventory management
Driving force behind the flow
37. 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)
Problems become more complex
Inventory management
Third phase
Costs
38. Demands - replenishments - - constraints - and costs
Anticipation stock (seasonal stock)
Properties of inventory
Reasons why inventory exists
Goals of inventory management
39. Time factor - discontinuity factor - uncertainty factor - economy factor
Less inventory
Goals of inventory management
Economic Factors
Functional factors to explain why inventory exists
40. 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)
Purchase costs
Anticipation stock (seasonal stock)
Inventory risk cost
Inventory risk cost
41. Constant vs variable - independent vs dependent
Functional classifications
Type of inventory system
Types of inventory costs
Type of demand
42. Customers demand for finished goods
Supplies inventory
Second phase
Driving force behind the flow
Material costs
43. Have most complex and difficult inventory problems
Replenishments
Repetiveness
Manufacturers
Types of inventory
44. Usually a firm's largest expenditure
Material costs
Onventory management
Inventory service cost
Uncertainty Factors
45. Single order vs repetitive order
Types of inventory
Repetiveness
Time Factor
Responsibility
46. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Second phase
Contraints
Third phase
Inventory holding costs
47. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
In-Proccess Goods
Psychic stock
Retailers - wholesalers - and distributors
The categorization of inventory by the purpose that it serves
48. Perpetual vs periodic
Inventory risk cost
Inventory risk cost
Type of inventory system
Sub goals of inventory management
49. 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 risk cost
Source of supply
Costs
Pipeline stock
50. Minimum rate of return expected on new investments
Different departments in a firm
Hurdle rate
Type of lead time
Goals of inventory management