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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. Demands - replenishments - - constraints - and costs
Properties of inventory
Source of supply
Discontinuity Factor
Type of inventory system
2. Minimum rate of return expected on new investments
Second phase
Material costs
Inventory service cost
Hurdle rate
3. 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
Inventory
Contraints
Inventory/materials manager
Types of inventory costs
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
Capital costs (opportunity costs)
Inventory risk cost
Initial phase of inventory flow
Pipeline stock
5. Perpetual vs periodic
Inventory management
Storage space costs
Initial phase of inventory flow
Type of inventory system
6. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Supplies inventory
Economic Factors
Safety stock (buffer stock)
Additional phases
7. Items consumes in the normal functioning of a firm that are NOT part of the final product; ex: pencils - light bulbs - drill bits - paper
Contraints
Initial phase of inventory flow
Supplies inventory
Major components of inventory carrying cost
8. 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
Major components of inventory carrying cost
Inventory holding costs
Inventory/materials manager
Third phase
9. It takes time to make a product - but consumers want them on demand
Time Factor
Internal shortage
Classification of Inventory item
Replenishments
10. Constant vs variable
Source of supply
Anticipation stock (seasonal stock)
Type of lead time
Decoupling stock
11. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
The categorization of inventory by the purpose that it serves
Replenishments
Capital cost
Order cost or set up cost
12. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Inventory flow
Replenishments
Initial phase of inventory flow
Order cost or set up cost
13. 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
Capital cost
Raw Materials Inventory
Inventory/materials manager
Type of demand
14. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Classifying inventory problems
Inventory risk cost
Sub goals of inventory management
Storage space costs
15. Constant vs variable - independent vs dependent
Type of demand
The categorization of inventory by the purpose that it serves
Responsibility
Replenishments
16. 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
Inventory/materials manager
Types of inventory costs
Driving force behind the flow
Initial phase of inventory flow
17. Involves controlling the flow of materials into and out of a system - a big timing problem
Storage space
Inventory management
Retailers - wholesalers - and distributors
Pipeline stock
18. 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
Pipeline stock
Inventory/materials manager
Types of inventory
Types of inventory costs
19. As items are completed - they enter another pool-finihsed goods - this pool must be controlled with regard to external demand
Third phase
Classification of Inventory item
Inventory/materials manager
Capital costs (opportunity costs)
20. Repetiveness - source of supply - type of demand - type of lead time - type of inventory
Inventory risk cost
How are inventory problems classified
Working stock (cycle stock)
Finished Goods Inventory
21. 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)
The categorization of inventory by reasons for its existence
Goals of inventory management
Growing companies
Inventory service cost
22. 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
Third phase
Classifying inventory problems
Responsibility
In-Proccess Goods
23. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Hurdle rate
Inventory service cost
Contraints
The categorization of inventory by reasons for its existence
24. 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
Purchase costs
Finished Goods Inventory
Types of inventory
25. Time factor - discontinuity factor - uncertainty factor - economy factor
Inventory risk cost
Inventory management
Functional factors to explain why inventory exists
Driving force behind the flow
26. Usually a firm's largest expenditure
Growing companies
Initial phase of inventory flow
Cost accumulation
Material costs
27. Run out of material or supplies - production stopping - deadlines not met
Initial phase of inventory flow
Pipeline stock
Internal shortage
Inventory risk cost
28. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Retailers - wholesalers - and distributors
Stock out costs
Demands
In-Proccess Goods
29. Customers demand for finished goods
Basic types of inventory
Storage space costs
Functional classifications
Driving force behind the flow
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
Costs
Pipeline stock
Time Factor
Initial phase of inventory flow
31. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Classification of Inventory item
External shortage
The categorization of inventory by reasons for its existence
Finished Goods Inventory
32. Supplies - raw materials - in process goods - and finished goods
Basic types of inventory
Different departments in a firm
Type of lead time
Order cost or set up cost
33. One firms finished goods may be another firms supplies or raw materials
Classification of Inventory item
Working stock (cycle stock)
Repetiveness
Additional phases
34. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Inventory management
Sub goals of inventory management
The categorization of inventory by the purpose that it serves
Types of inventory costs
35. Supplies - raw materials - in-processed goods - finished goods
Functional classifications
Type of demand
The categorization of inventory by the purpose that it serves
Types of inventory
36. Capital costs - storage space costs - inventory service cost - inventory risk cost
Uncertainty Factors
Growing companies
Inventory flow
Major components of inventory carrying cost
37. 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
Repetiveness
Reasons why inventory exists
Discontinuity Factor
Sub goals of inventory management
38. 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
Classifying inventory problems
Sub goals of inventory management
Second phase
Basic types of inventory
39. Time factor - discontinuity factor - uncertainty factor - and economic factor
Source of supply
Third phase
The categorization of inventory by reasons for its existence
Inventory service cost
40. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Classifying inventory problems
Working stock (cycle stock)
Basic types of inventory
Inventory holding costs
41. Sacrificed in exchange for buying needed machines
Different departments in a firm
Types of inventory costs
Inventory service cost
Purchasing discounts
42. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
Storage space
Safety stock (buffer stock)
Responsibility
Economic Factors
43. Often everybody's concern - but nones responsibility
Onventory management
Purchasing discounts
Contraints
Inventory/materials manager
44. Inventory partially completed finished products that are still in the production process; isolate the production departments from one another
Onventory management
Third phase
In-Proccess Goods
Retailers - wholesalers - and distributors
45. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Capital costs (opportunity costs)
Benefits of inventory/material manager
Supplies inventory
Storage space costs
46. 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
Storage space
Capital costs (opportunity costs)
Discontinuity Factor
Second phase
47. Internal vs external
Properties of inventory
Additional phases
Onventory management
Source of supply
48. Gives firms a competitive advantage due to lower costs and greater flexibility
Less inventory
Supplies inventory
Stock out costs
Type of inventory system
49. What purpose does inventory serve? working stock - anticipation stock (seasonal stock) - safety (buffer) stock - pipeline stock - decoupling stock - psychic stock
Functional classifications
Safety stock (buffer stock)
Manufacturers
Major properties of inventory
50. Single order vs repetitive order
Decoupling stock
Raw Materials Inventory
Repetiveness
Different departments in a firm