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






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






3. 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






4. Internal vs external






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






6. Display inventory carried to increase product visibility stimulate demand






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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






8. Perpetual vs periodic






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






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






11. Demands - replenishments - constraints - and costs






12. 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)






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






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






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






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






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






18. Constant vs variable - independent vs dependent






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






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






21. Have most complex and difficult inventory problems






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






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






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






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






26. Minimum rate of return expected on new investments






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






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






29. 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






30. 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






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






32. Single order vs repetitive order






33. Gives firms a competitive advantage due to lower costs and greater flexibility






34. Often everybody's concern - but nones responsibility






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






36. 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






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






38. 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






39. 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






40. 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






41. 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






42. 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)






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






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






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






46. Demands - replenishments - - constraints - and costs






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






48. 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






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






50. Customers demand for finished goods