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Test your basic knowledge |
Inventory Management
Start Test
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. Often short on cash because what little they have they devote to growth
Driving force behind the flow
The categorization of inventory by the purpose that it serves
Inventory service cost
Growing companies
2. 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
Major properties of inventory
Psychic stock
Discontinuity Factor
Stock out costs
3. Associated insurance cost - associated taxes
Retailers - wholesalers - and distributors
Third phase
Inventory carrying cost
Inventory service cost
4. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Safety stock (buffer stock)
Purchasing discounts
Inventory service cost
Contraints
5. 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
Storage space
Inventory flow
Internal shortage
Inventory
6. Internal vs external
Purchase costs
Responsibility
Source of supply
Classifying inventory problems
7. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Order cost or set up cost
Type of lead time
Manufacturers
Inventory
8. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Cost accumulation
Inventory risk cost
Contraints
In-Proccess Goods
9. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Inventory management
Functional classifications
Repetiveness
10. 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 management
Inventory service cost
Raw Materials Inventory
Storage space costs
11. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classifying inventory problems
Discontinuity Factor
Working stock (cycle stock)
Safety stock (buffer stock)
12. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Inventory risk cost
Stock out costs
Purchase costs
Storage space costs
13. Supplies - raw materials - in-processed goods - finished goods
Stock out costs
Types of inventory
Inventory management
Manufacturers
14. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Inventory holding costs
Replenishments
Types of inventory
Anticipation stock (seasonal stock)
15. Those cost that vary with the amount of inventory in the short run
Manufacturers
Storage space
Functional classifications
Second phase
16. Involves controlling the flow of materials into and out of a system - a big timing problem
Inventory management
Safety stock (buffer stock)
How are inventory problems classified
Different departments in a firm
17. Usually a firm's largest expenditure
Retailers - wholesalers - and distributors
Inventory management
Material costs
Properties of inventory
18. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
How are inventory problems classified
Inventory management
Second phase
Onventory management
19. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Major components of inventory carrying cost
Goals of inventory management
Classification of Inventory item
Internal shortage
20. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
External shortage
Inventory/materials manager
Inventory management
Safety stock (buffer stock)
21. 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)
Finished Goods Inventory
Less inventory
Reasons why inventory exists
Storage space costs
22. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Inventory carrying cost
Capital cost
Cost accumulation
Retailers - wholesalers - and distributors
23. 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
Capital costs (opportunity costs)
Initial phase of inventory flow
Third phase
Inventory/materials manager
24. Constant vs variable
Inventory service cost
Type of lead time
Sub goals of inventory management
Repetiveness
25. 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)
Inventory management
Onventory management
Purchase costs
Material costs
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
Inventory holding costs
Supplies inventory
Source of supply
Inventory/materials manager
27. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Uncertainty Factors
Discontinuity Factor
The categorization of inventory by reasons for its existence
External shortage
28. Single order vs repetitive order
Repetiveness
Working stock (cycle stock)
In-Proccess Goods
Safety stock (buffer stock)
29. As you move up in the supply chain...
Inventory risk cost
Time Factor
Discontinuity Factor
Problems become more complex
30. Often a lot of conflict when it comes to inventory decisions - sub optimization problems (managers only looking out for their own departments)
Different departments in a firm
Source of supply
Supplies inventory
Raw Materials Inventory
31. Run out of material or supplies - production stopping - deadlines not met
External shortage
Replenishments
Internal shortage
Capital costs (opportunity costs)
32. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Initial phase of inventory flow
Safety stock (buffer stock)
Hurdle rate
Economic Factors
33. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Types of inventory costs
External shortage
Manufacturers
Supplies inventory
34. Time factor - discontinuity factor - uncertainty factor - and economic factor
Inventory
The categorization of inventory by reasons for its existence
Initial phase of inventory flow
Contraints
35. 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
Stock out costs
Inventory service cost
Time Factor
Second phase
36. Supplies - raw materials - in process goods - and finished goods
Classification of Inventory item
Basic types of inventory
Order cost or set up cost
Sub goals of inventory management
37. 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
Additional phases
Benefits of inventory/material manager
Anticipation stock (seasonal stock)
Types of inventory costs
38. Display inventory carried to increase product visibility stimulate demand
Manufacturers
Source of supply
Psychic stock
Hurdle rate
39. Constant vs variable - independent vs dependent
Type of demand
Inventory flow
Classification of Inventory item
Anticipation stock (seasonal stock)
40. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Decoupling stock
Goals of inventory management
Benefits of inventory/material manager
Inventory service cost
41. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Classifying inventory problems
Inventory service cost
Onventory management
Finished Goods Inventory
42. 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
In-Proccess Goods
Inventory service cost
Anticipation stock (seasonal stock)
Sub goals of inventory management
43. Minimum rate of return expected on new investments
Functional classifications
Third phase
Hurdle rate
Purchasing discounts
44. 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
Major properties of inventory
Cost accumulation
Costs
45. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Replenishments
Functional factors to explain why inventory exists
Functional classifications
Benefits of inventory/material manager
46. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Benefits of inventory/material manager
Safety stock (buffer stock)
Types of inventory costs
Type of lead time
47. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Inventory holding costs
Time Factor
Basic types of inventory
In-Proccess Goods
48. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Retailers - wholesalers - and distributors
Functional factors to explain why inventory exists
Inventory risk cost
The categorization of inventory by the purpose that it serves
49. Gives firms a competitive advantage due to lower costs and greater flexibility
Less inventory
Costs
Inventory management
Discontinuity Factor
50. 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
External shortage
Purchase costs
Pipeline stock
Onventory management