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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. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
Inventory/materials manager
Cost accumulation
Inventory service cost
Uncertainty Factors
2. 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)
Type of inventory system
Purchasing discounts
Costs
Material costs
3. 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
Reasons why inventory exists
Driving force behind the flow
Inventory carrying cost
Major properties of inventory
4. 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
Inventory holding costs
Raw Materials Inventory
Storage space
5. Perpetual vs periodic
Type of inventory system
Hurdle rate
Discontinuity Factor
Types of inventory
6. As you move up in the supply chain...
Reasons why inventory exists
Inventory carrying cost
Problems become more complex
Capital costs (opportunity costs)
7. Supplies - raw materials - in process goods - and finished goods
Anticipation stock (seasonal stock)
Basic types of inventory
Types of inventory
Inventory risk cost
8. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Source of supply
Inventory
Inventory management
In-Proccess Goods
9. 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
Type of lead time
Demands
Inventory holding costs
Onventory management
10. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Inventory/materials manager
The categorization of inventory by the purpose that it serves
Demands
Different departments in a firm
11. Demands - replenishments - constraints - and costs
Major properties of inventory
Goals of inventory management
Stock out costs
Retailers - wholesalers - and distributors
12. 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
Classification of Inventory item
Retailers - wholesalers - and distributors
Types of inventory costs
Sub goals of inventory management
13. 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
Internal shortage
Contraints
Second phase
Time Factor
14. 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
Stock out costs
Classification of Inventory item
Time Factor
Growing companies
15. Demands - replenishments - - constraints - and costs
Inventory/materials manager
Onventory management
Problems become more complex
Properties of inventory
16. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Costs
Additional phases
Repetiveness
Growing companies
17. It takes time to make a product - but consumers want them on demand
Type of demand
Inventory risk cost
Time Factor
Different departments in a firm
18. Constant vs variable - independent vs dependent
Replenishments
Stock out costs
Onventory management
Type of demand
19. Associated insurance cost - associated taxes
Storage space
Safety stock (buffer stock)
Inventory service cost
Manufacturers
20. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Finished Goods Inventory
Hurdle rate
Properties of inventory
Replenishments
21. Display inventory carried to increase product visibility stimulate demand
Types of inventory
Capital costs (opportunity costs)
Growing companies
Psychic stock
22. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Types of inventory
Inventory service cost
Sub goals of inventory management
Types of inventory costs
23. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Pipeline stock
How are inventory problems classified
Contraints
Storage space
24. 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
Internal shortage
Second phase
Inventory risk cost
Discontinuity Factor
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)
The categorization of inventory by reasons for its existence
Purchase costs
Type of demand
Raw Materials Inventory
26. 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
Material costs
Type of demand
Growing companies
Anticipation stock (seasonal stock)
27. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Type of inventory system
Purchase costs
Inventory/materials manager
Goals of inventory management
28. The stock of materials on hand at a given time and the unutilized assets waiting for sale or use
The categorization of inventory by reasons for its existence
Inventory management
Reasons why inventory exists
Major components of inventory carrying cost
29. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Types of inventory costs
Responsibility
Working stock (cycle stock)
Basic types of inventory
30. Capital costs - storage space costs - inventory service cost - inventory risk cost
Major components of inventory carrying cost
Less inventory
Properties of inventory
Safety stock (buffer stock)
31. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Type of inventory system
Finished Goods Inventory
Time Factor
Inventory
32. 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
Cost accumulation
In-Proccess Goods
Type of demand
Inventory
33. 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 service cost
Inventory risk cost
Material costs
Contraints
34. Have most complex and difficult inventory problems
Discontinuity Factor
Onventory management
Manufacturers
Initial phase of inventory flow
35. Minimum rate of return expected on new investments
Contraints
Types of inventory costs
Hurdle rate
Psychic stock
36. Run out of material or supplies - production stopping - deadlines not met
Capital cost
Inventory/materials manager
Demands
Internal shortage
37. Cost of the facility - material handling (labor and energy) - maintenance cost - and some utility cost
Responsibility
Different departments in a firm
Storage space costs
Inventory risk cost
38. 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
How are inventory problems classified
Safety stock (buffer stock)
Inventory
Responsibility
39. Time factor - discontinuity factor - uncertainty factor - and economic factor
Supplies inventory
The categorization of inventory by reasons for its existence
The categorization of inventory by the purpose that it serves
Major properties of inventory
40. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost
Inventory carrying cost
Repetiveness
Inventory risk cost
Stock out costs
41. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Inventory carrying cost
Raw Materials Inventory
Goals of inventory management
42. Those cost that vary with the amount of inventory in the short run
Storage space costs
Storage space
Manufacturers
Major components of inventory carrying cost
43. 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
Order cost or set up cost
Goals of inventory management
Capital costs (opportunity costs)
Finished Goods Inventory
44. Customers demand for finished goods
Second phase
Driving force behind the flow
Storage space
Uncertainty Factors
45. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Economic Factors
Less inventory
Source of supply
Safety stock (buffer stock)
46. 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)
Inventory holding costs
Type of inventory system
Reasons why inventory exists
Major properties of inventory
47. Time factor - discontinuity factor - uncertainty factor - economy factor
The categorization of inventory by the purpose that it serves
Decoupling stock
Pipeline stock
Functional factors to explain why inventory exists
48. Sacrificed in exchange for buying needed machines
Consumption
Goals of inventory management
Purchasing discounts
Inventory holding costs
49. One firms finished goods may be another firms supplies or raw materials
Classifying inventory problems
Cost accumulation
Classification of Inventory item
Inventory management
50. A customers order cannot be met - backorder costs - present profit loss - future profit loss
External shortage
Less inventory
Inventory holding costs
Material costs