CAM AS UNIT 4 (part 2)

What is inventory?

• The raw materials, work in progress, and finished goods held by a business
• The total revenue generated by a business
• The total cost of production
• The profit margin of the product

Which of the following is a benefit of holding inventory?

• Increased storage costs
• Ability to meet sudden customer demand
• Higher risk of inventory becoming outdated
• Increased insurance costs

What is buffer inventory?

• The maximum inventory a business can hold
• The minimum inventory to prevent production stoppages
• The total cost of inventory
• The profit margin from inventory sales

What is the reorder level in inventory management?

• The maximum inventory level
• The level at which more inventory is ordered
• The total cost of inventory
• The profit margin from inventory sales

What is lead time in inventory management?

• The time taken to sell inventory
• The time taken for inventory to arrive after ordering
• The total cost of inventory
• The profit margin from inventory sales

Which of the following is a cost of holding inventory?

• Ability to meet demand
• Rent for storage space
• Flexibility in production
• Reduced risk of stockouts

What is the main purpose of just-in-time (JIT) inventory management?

• To hold high levels of inventory
• To minimise inventory holding costs
• To increase storage costs
• To reduce flexibility in production

Which of the following is a requirement for successful JIT implementation?

• High buffer inventory levels
• Reliable suppliers
• Long lead times
• High storage costs

What is the main disadvantage of just-in-case (JIC) inventory management?

• Low storage costs
• High inventory holding costs
• Low risk of stockouts
• High flexibility

Which of the following is a benefit of using IT systems in inventory management?

• Increased manual errors
• Improved tracking and monitoring of inventory
• Higher storage costs
• Reduced flexibility