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






2. Often everybody's concern - but nones responsibility






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






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






5. The cost of issuing a purchase order/placing an order if obtained externally - the cost of setting up production if made in house






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






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






8. Those cost that vary with the amount of inventory in the short run






9. Units put into inventory - can be classified by: size - pattern - lead time (time between order and addition to inventory - constant vs variable)






10. Sacrificed in exchange for buying needed machines






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






12. 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






13. Perpetual vs periodic






14. Display inventory carried to increase product visibility stimulate demand






15. 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






16. 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)






17. Demands - replenishments - - constraints - and costs






18. Single order vs repetitive order






19. 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






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






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






22. 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)






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






24. One firms finished goods may be another firms supplies or raw materials






25. As you move up in the supply chain...






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






27. Demands - replenishments - constraints - and costs






28. Time factor - discontinuity factor - uncertainty factor - economy factor






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






30. Repetiveness - source of supply - type of demand - type of lead time - type of inventory






31. Purchase economies - production economies - transportation economies - hedging against increasing materials cost - smooth production and stabilize manpower levels when seasonality is an issue






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






33. Have most complex and difficult inventory problems






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






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






36. 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






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






38. Usually a firm's largest expenditure






39. Involves controlling the flow of materials into and out of a system - a big timing problem






40. 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






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






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






43. 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






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






45. Constant vs variable






46. 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)






47. 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






48. Working stock - anticipation stock - safety stock - pipeline stock - decoupling stock - psychic stock






49. 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






50. The cost associated with a foregone alternative use of the capital - that is - the benefits that could have been obtained from that alternative