Inventory Management

Courtney sells birdhouses. In her warehouse she has lumber, hardware and paint used in the production of her birdhouses. Which term best describes these items?

• Work-in-progress goods

• Inventory

• Raw materials

• Building supplies

Which of the following is the term used to describe the cost of an opportunity given up in order to follow another choice?

• Carrying costs

• Operating costs

• Inventory management costs

• Opportunity costs

Which inventory method is primarily used when a company has inventory with a high carrying cost?

• HIFO method

• FISH situation

• Periodic inventory

• Just In Case method

Which of the following is more costly than other inventory systems, but is very efficient, effective and accurate?

• Perpetual manual system

• Visual inventory control

• Annual inventory count

• Perpetual computer-based system

Which of the following often utilizes “out-of-stock” cards behind the last item on the shelf?

• Computer-based perpetual systems

• Visual inventory control

• Just In Time method

• Annual inventory count

Supply and demand is used in combination with which of the following inventory management methods?

• LIFO method

• FIFO method

• Just In Time (JIT) method

• Just In Case (JIC) method

Which of the following describes when supply and demand are balanced?

• Surplus

• Equilibrium

• Stability

• Neutrality

Which of the following occurs when supply exceeds demand?

• Surplus

• Equilibrium

• Shortage

• Stability

Which of the following occurs when demand exceeds supply?

• Surplus

• Equilibrium

• Shortage

• Stability

Which of the following is the correct equation to use when calculating inventory turnover?

• Profit of goods sold x average inventory

• Carrying costs x demand

• Cost of goods sold ÷ average inventory

• Demand ÷ Supply