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. 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






2. 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)






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






4. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






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






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






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






8. 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






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






10. 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






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






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






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






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. Demands - replenishments - - constraints - and costs






16. 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






17. 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






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






19. 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






20. Have most complex and difficult inventory problems






21. Associated insurance cost - associated taxes






22. Single order vs repetitive order






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






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






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






26. 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)






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






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






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






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






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






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






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






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






35. 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






36. 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






37. 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






38. 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)






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






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






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






42. Often everybody's concern - but nones responsibility






43. 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






44. Constant vs variable - independent vs dependent






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






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






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






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






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






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