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






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






3. 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






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






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






6. Associated insurance cost - associated taxes






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






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






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






10. Sacrificed in exchange for buying needed machines






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






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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






13. 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






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






15. 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)






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






17. Constant vs variable






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






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






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






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






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






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






24. 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






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






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






27. 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






28. Constant vs variable - independent vs dependent






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






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






31. Demands - replenishments - constraints - and costs






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






33. 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






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






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






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






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






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






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






40. Internal vs external






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






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






43. 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






44. Customers demand for finished goods






45. 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)






46. 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






47. 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






48. 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






49. Minimum rate of return expected on new investments






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