Managing Purchasing and Inventory

The action known as procurement, is the buying of materials needed by the organization is:

• Purchasing

• Model Inventory

• Vendors

The target inventory of what you think you will need to keep in stock is:

• Purchasing

• Model Inventory

• Vendors

Businesses that sell you the inventory are:

• Purchasing

• Model Inventory

• Vendors

What things should you consider when managing purchasing?

• Selecting the right quality and Buying the right quantity

• Timing your purchases

• Choosing the right vendors and the number of vendors

• Getting the right price

• All of the above

It is not good to have more than one vendor.

• True

• False

Too much inventory on hand results in financing costs, opportunity costs, storage costs, insurance costs, shrinkage costs, and obsolescence costs.

• True

• False

When calculating the supply of inventory needed you should first determine the inventory/stock turnover rate and then find the number of months supply to keep.

• True

• False

The Inventory Turnover Rate Formula is:

• Net sales (in retail dollars) / Avg inventory on hand (in retail dollars)

• Cost of goods sold / Avg inventory on hand (at cost)

• Number of units sold / Avg inventory on hand in units

• All of the above

• None of the above

When you look at how much you have in stock and compare it to what you want to have on hand it is:

• Visual Inventory System

• Perpetual Inventory System

• Just-in-time (JIT) Inventory System

As inventory is sold it is subtracted from an inventory list, as it is brought in it is added to the list which is:

• Visual Inventory System

• Perpetual Inventory System

• Just-in-time (JIT) Inventory System