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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. Run out of material or supplies - production stopping - deadlines not met
Internal shortage
Onventory management
Uncertainty Factors
Psychic stock
2. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Replenishments
Goals of inventory management
Demands
Repetiveness
3. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Purchasing discounts
Safety stock (buffer stock)
Problems become more complex
Inventory risk cost
4. Supplies - raw materials - in-processed goods - finished goods
Storage space costs
Types of inventory
Capital cost
Onventory management
5. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Supplies inventory
Functional factors to explain why inventory exists
Classifying inventory problems
Basic types of inventory
6. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Manufacturers
Storage space costs
Storage space
Goals of inventory management
7. 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
Second phase
Economic Factors
Functional factors to explain why inventory exists
Additional phases
8. 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
Storage space
Repetiveness
Capital costs (opportunity costs)
Problems become more complex
9. Usually a firm's largest expenditure
Material costs
Type of inventory system
Types of inventory costs
Properties of inventory
10. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Working stock (cycle stock)
In-Proccess Goods
Types of inventory costs
Capital cost
11. 1) stock of material on hand at a given time (tangible assets that can be seen - measured - and counted) 2) utilized assets waiting for sale of use
Cost accumulation
Inventory management
Inventory
Third phase
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
Different departments in a firm
Demands
Costs
Anticipation stock (seasonal stock)
13. Minimum rate of return expected on new investments
Economic Factors
Purchasing discounts
Manufacturers
Hurdle rate
14. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Second phase
Goals of inventory management
Type of demand
Inventory risk cost
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
Finished Goods Inventory
Inventory carrying cost
Third phase
Initial phase of inventory flow
16. 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
Storage space costs
Responsibility
Time Factor
Type of lead time
17. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Storage space costs
Classification of Inventory item
Inventory management
The categorization of inventory by the purpose that it serves
18. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Reasons why inventory exists
Types of inventory costs
Less inventory
Type of demand
19. Perpetual vs periodic
Inventory
Inventory carrying cost
Reasons why inventory exists
Type of inventory system
20. Often short on cash because what little they have they devote to growth
Psychic stock
Working stock (cycle stock)
Growing companies
Storage space costs
21. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
External shortage
Functional classifications
Inventory flow
Pipeline stock
22. 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
Supplies inventory
Inventory flow
Anticipation stock (seasonal stock)
Inventory service cost
23. Allows one part of the system to be isolated from the next
Second phase
Decoupling stock
Basic types of inventory
Purchasing discounts
24. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Demands
Reasons why inventory exists
Basic types of inventory
25. 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
Contraints
Basic types of inventory
Inventory/materials manager
Second phase
26. 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
Finished Goods Inventory
Source of supply
Storage space costs
Raw Materials Inventory
27. One firms finished goods may be another firms supplies or raw materials
Classification of Inventory item
Sub goals of inventory management
Pipeline stock
Functional classifications
28. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Storage space
External shortage
The categorization of inventory by the purpose that it serves
Order cost or set up cost
29. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Supplies inventory
Benefits of inventory/material manager
The categorization of inventory by the purpose that it serves
Goals of inventory management
30. 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
Inventory holding costs
Replenishments
Source of supply
Contraints
31. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Inventory management
Benefits of inventory/material manager
Finished Goods Inventory
Inventory/materials manager
32. 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
Capital cost
Functional classifications
Stock out costs
Inventory holding costs
33. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Inventory flow
Properties of inventory
Goals of inventory management
Type of inventory system
34. 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
Working stock (cycle stock)
Retailers - wholesalers - and distributors
Finished Goods Inventory
Anticipation stock (seasonal stock)
35. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Growing companies
Economic Factors
Type of inventory system
Capital cost
36. Cost of obsolescence - damage cost - shrinkage (theft) cost
Storage space costs
Anticipation stock (seasonal stock)
Inventory risk cost
Decoupling stock
37. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Internal shortage
Economic Factors
Capital costs (opportunity costs)
Inventory carrying cost
38. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Different departments in a firm
Inventory management
Finished Goods Inventory
39. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production
Purchasing discounts
The categorization of inventory by the purpose that it serves
Benefits of inventory/material manager
Consumption
40. 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)
Costs
Capital cost
Less inventory
Decoupling stock
41. Internal vs external
Third phase
Source of supply
Hurdle rate
Types of inventory
42. Customers demand for finished goods
Replenishments
Internal shortage
Time Factor
Driving force behind the flow
43. Often everybody's concern - but nones responsibility
Additional phases
Storage space costs
Functional factors to explain why inventory exists
Onventory management
44. Balance is key - concentration may be on one objective at certain times and on another at other times depending on needs of the firm - company policy should emphasize the need to focus on the total cost to the firm - bad idea to have lots of cash
Classifying inventory problems
Cost accumulation
Finished Goods Inventory
Type of demand
45. Demands - replenishments - - constraints - and costs
Storage space
Properties of inventory
Inventory service cost
Discontinuity Factor
46. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Contraints
Inventory carrying cost
Problems become more complex
Uncertainty Factors
47. 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)
Initial phase of inventory flow
Reasons why inventory exists
Hurdle rate
Purchasing discounts
48. Demands - replenishments - constraints - and costs
Inventory flow
Major properties of inventory
How are inventory problems classified
Reasons why inventory exists
49. 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
Sub goals of inventory management
Repetiveness
Type of lead time
The categorization of inventory by reasons for its existence
50. Constant vs variable
Type of lead time
Pipeline stock
Goals of inventory management
Driving force behind the flow