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. Have most complex and difficult inventory problems






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






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






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






5. 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






6. 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






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






8. Time factor - discontinuity factor - uncertainty factor - economy factor






9. Associated insurance cost - associated taxes






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. Constant vs variable






12. 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






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






14. 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






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






16. 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






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






18. Customers demand for finished goods






19. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand






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






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






22. Materials are used by manufacturing and fill a second pool of work in process - this pool must be managed in relation to the capacity of the facility






23. Usually a firm's largest expenditure






24. Demands - replenishments - constraints - and costs






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






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






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






28. Sacrificed in exchange for buying needed machines






29. 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






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






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






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






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






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






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






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






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






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






39. 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






40. 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






41. 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






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






43. Minimum rate of return expected on new investments






44. 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






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






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






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






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






49. 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)






50. Perpetual vs periodic