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. Often short on cash because what little they have they devote to growth






2. 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and deterministic vs unknown vs probabilistic) 2) rate (def size over a period of time) 3) pattern (how demand is withdrawn from inventory - be






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






4. 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)






5. Production does not need to be geared directly to this; it is not faced to adapt to the necessities of production






6. 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






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






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






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






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






11. Capital costs - storage space costs - inventory service cost - inventory risk cost






12. 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)






13. 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






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






15. 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






16. Often everybody's concern - but nones responsibility






17. 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






18. 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






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






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






21. Customers demand for finished goods






22. Demands - replenishments - constraints - and costs






23. Fewer department conflicts - less sub optimization - consolidation of activities - single source of accountability






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






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






26. Inventory held in advance of requirements - reasons for carrying: economies of scale (or batching economies) - price (quantity) discounts - transportation rates - production economies






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






28. Constant vs variable






29. Internal vs external






30. Single order vs repetitive order






31. Limitations placed on inventory systems - ex: space constraints - capital - facility - equipment - personal - management policies and administrative decisions






32. 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






33. Includes cost of obsolescence (equal to the original cost-salavage cost) - damage cost - and shrinkage (theft) cost






34. Have most complex and difficult inventory problems






35. Minimum rate of return expected on new investments






36. Demands - replenishments - - constraints - and costs






37. Time factor - discontinuity factor - uncertainty factor - economy factor






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






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






40. 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






41. Sacrificed in exchange for buying needed machines






42. Repetiveness - source of supply - type of demand - type of lead time - type of inventory system






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






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






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






46. Usually a firm's largest expenditure






47. 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






48. 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






49. Purchase - oder cost or set up cost - stock out cost - and inventory holding costs (aka inventory carrying costs)






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