inventory management

Multiple Choice

What is inventory ?

• Stock of items kept to sell when the price increase

• Stock of items kept to meet present demand

• Stock of items kept to meet future demand

• Stock of items kept to sure that no one get that product

Multiple Choice

How many effects of inventory are there in SCM? What are they ?

• Bullwhip effect & Ripple effect

• Bullwhip effect

• Ripple effect

Multiple Choice

Which of the following statements describes the role of inventory in mitigating the bullwhip effect and ripple effect?

• All above answers

• Inventory helps to stabilize seasonal or cyclical demand

• Inventory reduces the need for price discounts

• Inventory prevents work stoppages between stages of production

Multiple Choice

Which of the following statements describes the role of inventory in mitigating the bullwhip effect and ripple effect?

• All above answers

• Inventory helps to stabilize seasonal or cyclical demand

• Inventory reduces the need for price discounts

• Inventory prevents work stoppages between stages of production

Multiple Choice

EOQ methods determines the optimal order quantity to:

• Maximize the revenue cost

• maximize the total inventory cost

• Minimize the transportation cost

• Minimize the total inventory cost

Multiple Choice

Which costs are considered when calculating the Economic Order Quantity (EOQ)?

• Holding cost and ordering cost

• Holding cost, ordering cost, and shortage cost

• Holding cost and shortage cost

• Ordering cost and shortage cost

Multiple Choice

Carrying costs

• A. are the costs associated with holding an inventory of items

• B. include a holding cost

• C. are the costs associated with having vendors hold supplies for organizations

• D. (A) and (B)

Multiple Choice

Economic Order Quantity (EOQ) establishes

• The quantity of items an organization should order each time to minimize costs associated with ordering

• The number of items an organization can order in bulk to receive a discount

• The quantity of items an organization would have to order each time to maximize costs associated with ordering

• The maximum number of items an organization would want to purchase at one time

Multiple Choice

Time as a consideration is unimportant in inventory management.

• FALSE

• TRUE

Multiple Choice

Among different types of costs associated with inventory, the costs of obtaining purchase approvals are ________.

• Purchasing costs

• Ordering costs

• Carrying costs

• Stockout costs

Multiple Choice

Policies based on ABC analysis might include investing

• More in supplier development for A items.

• More in inventory security for C items.

• Extra care in forecasting for C items.

• The most time and effort verifying the accuracy of records for B items.

Multiple Choice

An inventory lead time is

• the time taken to process outstanding sales orders

• amount of time between placing an order with a supplier and receiving the inventory

• the average delay in handling customer orders

• a maximum levels of inventory a business can or want to hold

Multiple Choice

what would be an example of a stock holding cost?

• sales commission

• warehouse rental

• the average delay in handling customer orders

• a maximum levels of inventory a business can or want to hold

Multiple Choice

what kind of stocks are normally easiest to turn into cash?

• finished goods

• work-in-process

• components

• raw materials

Multiple Choice

a likely advantage of a business holding relatively high levels of inventory is that the business will

• have lower inventory cost

• be able to reduce the cash invented in working capital

• be more likely to avoid inventory obsolescence

• be able to handle sudden increases in demand

Multiple Choice

2 likely consequences of a high incidence of stock outs are?

• lower sales and higher profit

• lower sales and lower customers goodwill

• higher sales and higher customer loyalty

• higher sale and lower gross margin

Multiple Choice

Which of the following is not an inventory?

• Machines

• Raw material

• Finished products

• Consumable tools

Multiple Choice

In the ABC Analysis system the B category
stands for ?

• Outstanding importance in value

• Comparatively unimportant in value

• Comparatively important in value

• Average importance in value

Multiple Choice

Which among the following costs is the expense
of storing inventory for a specified period of time ?

• Carrying cost

• Purchasing cost

• Financial cost

• Storing cost

Multiple Choice

Identify the two components that make up
the EOQ equation ?

• Order cost, setup cost

• Annual usage, carrying cost

• Quality cost, setup cost

• Quality cost, annual usage

Multiple Choice

Which of the following is true for inventory control?

• It helps in minimizing costs
  related to overstocking

• It is only relevant for small businesses

• It is solely focused on
  increasing stock levels

• It has no impact on operational efficiency

Multiple Choice

Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory is a(n) ________.

• Purchasing cost

• Shortage cost

• Ordering cost

• Carrying cost

Multiple Choice

Seasonal inventory is manufactured during the pre season to ensure that enough of the product is available during the peak season.

• TRUE

• FALSE

Multiple Choice

Total inventory cost =

• ordering cost + carrying cost

• carrying cost - ordering cost

• demand cost

• ordering cost - carrying cost

Multiple Choice

What is the Inventory Management Objective?

• control the stock flow

• satisfied customer requirements

• order tracking and shortage cautionary

• All 3 answer are correct

Multiple Choice

How many types of inventory are there in the SCM?

• 7

• 4

• 5

• 6

Multiple Choice

What are the advantages of inventory management system ?

• A. enhanced productivity in operations,cut costs
  and increased profits

• B. cost saving, customer satisfaction

• C. Both A and B are correct

• D. both A and B are incorrect

Multiple Choice

What are the disadvantages of inventory management system?

• A. higher costs, difficult to control,
  hides production problems

• B. improved cash flow, profit maximization

• C. cost reduction,
  enhanced customer satisfaction

• D. both A and B are correct

Multiple Choice

What are the benefits of using the EOQ model in inventory
management ?

• A. cost reduction

• B. improved cash flow

• C. enhanced profitability

• D. A,B,C are correct

Multiple Choice

Which of the following is a correct example of independent
demand inventory?

• A. Cars, appliances, Tires for autos, houses

• B. Cars, appliances, computers, and houses

• C. Cars, Tires for autos, computers

• D. Cars, Tires for autos, appliances

Multiple Choice

The purpose of inventory management is to determine ?

• A. timing and quantity of orders

• B. ordering and carrying costs

• C. quantity and cost of order

• D. timing and cost of orders