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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. It takes time to make a product - but consumers want them on demand
Time Factor
Classifying inventory problems
Replenishments
Classification of Inventory item
2. Time factor - discontinuity factor - uncertainty factor - economy factor
Decoupling stock
Functional factors to explain why inventory exists
Order cost or set up cost
Inventory management
3. Demands - replenishments - constraints - and costs
Benefits of inventory/material manager
Problems become more complex
Time Factor
Major properties of inventory
4. Sacrificed in exchange for buying needed machines
Onventory management
Purchasing discounts
Functional classifications
Inventory
5. 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)
Responsibility
Functional factors to explain why inventory exists
Different departments in a firm
Inventory service cost
6. 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
Supplies inventory
Responsibility
Storage space
Stock out costs
7. Final product - available for storage - distribution - or sale; isolate the customer from the producer
Capital cost
Finished Goods Inventory
Order cost or set up cost
Demands
8. Those cost that vary with the amount of inventory in the short run
Classification of Inventory item
Storage space
Growing companies
Manufacturers
9. Display inventory carried to increase product visibility stimulate demand
Psychic stock
Replenishments
Storage space
Third phase
10. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies
Safety stock (buffer stock)
Working stock (cycle stock)
Inventory holding costs
Storage space costs
11. Single order vs repetitive order
Demands
Repetiveness
Psychic stock
Inventory management
12. One firms finished goods may be another firms supplies or raw materials
Type of lead time
Goals of inventory management
Classification of Inventory item
Hurdle rate
13. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue
External shortage
Repetiveness
Economic Factors
Internal shortage
14. Constant vs variable
Problems become more complex
Type of lead time
The categorization of inventory by reasons for its existence
Goals of inventory management
15. Inventory held in reserve to protect against uncertainty - reasons for carrying: uncertainty around customer demand - delays or disruptions in supply
Goals of inventory management
Classification of Inventory item
Inventory service cost
Safety stock (buffer stock)
16. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability
Benefits of inventory/material manager
Material costs
Major properties of inventory
Problems become more complex
17. Demands - replenishments - - constraints - and costs
Inventory carrying cost
Costs
Properties of inventory
Discontinuity Factor
18. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative
Capital cost
Working stock (cycle stock)
Second phase
External shortage
19. Supplies - raw materials - in-processed goods - finished goods
Types of inventory
Third phase
Anticipation stock (seasonal stock)
The categorization of inventory by the purpose that it serves
20. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house
Inventory management
Order cost or set up cost
The categorization of inventory by reasons for its existence
Basic types of inventory
21. 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
The categorization of inventory by reasons for its existence
Types of inventory
Initial phase of inventory flow
Inventory management
22. Time factor - discontinuity factor - uncertainty factor - and economic factor
Order cost or set up cost
The categorization of inventory by reasons for its existence
Consumption
Pipeline stock
23. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system
Benefits of inventory/material manager
Capital costs (opportunity costs)
Costs
Classifying inventory problems
24. If the firm uses a warehouse or distributor centers - there must be additional pools of finished inventory
Inventory risk cost
Inventory/materials manager
Additional phases
Cost accumulation
25. 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
Order cost or set up cost
Costs
Inventory holding costs
Inventory flow
26. Protection from the unexpected (forecast errors - break downs - strikes - disasters)
External shortage
Capital cost
Uncertainty Factors
Repetiveness
27. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)
Type of lead time
Supplies inventory
Second phase
Types of inventory costs
28. 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
The categorization of inventory by the purpose that it serves
Functional classifications
Additional phases
Inventory holding costs
29. 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
Replenishments
Demands
Basic types of inventory
30. 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
Finished Goods Inventory
Internal shortage
Responsibility
Pipeline stock
31. As you move up in the supply chain...
Type of inventory system
Raw Materials Inventory
Problems become more complex
Responsibility
32. Associated insurance cost - associated taxes
Inventory risk cost
Storage space
Inventory service cost
Onventory management
33. A customers order cannot be met - backorder costs - present profit loss - future profit loss
Types of inventory
Costs
Internal shortage
External shortage
34. 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
Problems become more complex
Inventory
Replenishments
Supplies inventory
35. 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)
Responsibility
Purchase costs
Cost accumulation
Inventory flow
36. Often everybody's concern - but nones responsibility
Onventory management
Psychic stock
Different departments in a firm
Capital costs (opportunity costs)
37. Allows one part of the system to be isolated from the next
Decoupling stock
Problems become more complex
Type of demand
Storage space
38. 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
Onventory management
Capital costs (opportunity costs)
Storage space costs
Decoupling stock
39. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions
Contraints
Inventory holding costs
Growing companies
Purchasing discounts
40. 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
Source of supply
Uncertainty Factors
Storage space costs
Anticipation stock (seasonal stock)
41. 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
Inventory service cost
Replenishments
The categorization of inventory by the purpose that it serves
42. Minimum rate of return expected on new investments
Hurdle rate
Purchasing discounts
Functional factors to explain why inventory exists
Inventory management
43. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock
Functional factors to explain why inventory exists
Repetiveness
Types of inventory costs
The categorization of inventory by the purpose that it serves
44. Run out of material or supplies - production stopping - deadlines not met
Inventory risk cost
Storage space
Replenishments
Internal shortage
45. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)
Storage space costs
Capital costs (opportunity costs)
Replenishments
Purchasing discounts
46. Often short on cash because what little they have they devote to growth
Inventory
Classifying inventory problems
Growing companies
Finished Goods Inventory
47. Hold only finished goods inventories/supplies - they have inventory problems confined to supplies and finished goods
Inventory service cost
Supplies inventory
Order cost or set up cost
Retailers - wholesalers - and distributors
48. Involves controlling the flow of materials into and out of a system - a big timing problem
Raw Materials Inventory
Inventory/materials manager
Decoupling stock
Inventory management
49. 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
Driving force behind the flow
Contraints
Type of lead time
Inventory/materials manager
50. 1) minimize inventory investment 2) maximize customer service 3) assure efficient plant operation
Initial phase of inventory flow
Finished Goods Inventory
Storage space
Goals of inventory management