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 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






2. 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






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






4. 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






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






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






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






8. 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






9. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






12. Demands - replenishments - constraints - and costs






13. Sacrificed in exchange for buying needed machines






14. 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






15. 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






16. Perpetual vs periodic






17. 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






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






19. Minimum rate of return expected on new investments






20. Customers demand for finished goods






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






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






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






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






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






26. Demands - replenishments - - constraints - and costs






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






28. 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






29. Associated insurance cost - associated taxes






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






31. 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






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






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






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






35. Often everybody's concern - but nones responsibility






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






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






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






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






40. 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)






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






42. 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






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






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






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






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






47. 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






48. Usually a firm's largest expenditure






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






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