Question 1

Any quantifiable item that is stored and used in an operation is called ____________________?&#10;A) Work in Process&#10;B) Inventory&#10;C) Finished goods&#10;D) Raw materials

Accepted Answer

Inventory is the correct term for any quantifiable item that is stored and used in an operation, encompassing raw materials, work in process, and finished goods.

Question 2

Partially processed product awaiting further operations is called ______________ inventory?&#10;A) Raw material&#10;B) Cycle&#10;C) Work in Process&#10;D) Buffer

Accepted Answer

Work in Process (WIP) inventory refers to partially finished goods that are still undergoing manufacturing or production processes.

Question 3

When goods have to travel between factories or distribution centres over large distances this is known as _____________________?&#10;A) Anticipation inventory&#10;B) Cycle inventory&#10;C) Buffer inventory&#10;D) Pipeline inventory

Accepted Answer

Pipeline inventory refers to goods that are in transit between locations, such as factories or distribution centers, over large distances.

Question 4

Which of these is not a reason to keep inventory?&#10;A) Can reduce costs by buying in bulk&#10;B) Can increase dependability by having a constant supply&#10;C) Can become obsolete if not ordered&#10;D) Can increase flexibility to cover short term demands

Accepted Answer

Inventory is kept for reasons such as reducing costs through bulk purchases, increasing dependability by ensuring a constant supply, and increasing flexibility to meet short-term demands. However, inventory itself does not become obsolete if not ordered; rather, holding inventory carries the risk of the items becoming obsolete over time if demand changes or newer models are introduced.

Question 5

The inventory management system that looks at inventory in terms of quantity of demand and value is called __________________?&#10;A) The ABC classification&#10;B) The XYZ classification&#10;C) Pareto analysis&#10;D) Asset management

Accepted Answer

The ABC classification system categorizes inventory based on its value and the quantity of demand, with 'A' items being the most valuable and 'C' items being the least. This method helps businesses prioritize their inventory management efforts.

Question 6

Which of these inventory order models would be used for dependent demand systems such as MRP systems?&#10;A) Fixed order quantity&#10;B) Lot for lot&#10;C) Fixed order period&#10;D) Economic order quantity

Accepted Answer

Lot for lot ordering is specifically designed for dependent demand systems, such as those found in Material Requirements Planning (MRP) systems, where the quantity ordered is based on the production needs for finished goods.

Question 7

The total cost of inventory is the sum of the ______________ cost and the _______________ cost&#10;A) Fixed cost and ordering cost&#10;B) Holding cost and variable cost&#10;C) Ordering cost and holding cost&#10;D) Ordering cost and variable cost

Accepted Answer

The total cost of inventory is the sum of the ordering cost (costs associated with placing orders for more inventory) and the holding cost (costs associated with storing the inventory until it is sold or used).

Question 8

The most cost effective quantity of a material to purchase is calculated by which method?&#10;A) Reorder point model&#10;B) Economic Order model&#10;C) Fixed order period model&#10;D) Lot for Lot model

Accepted Answer

The Economic Order Quantity (EOQ) model is specifically designed to calculate the most cost-effective quantity of a material to purchase, balancing ordering costs and holding costs to minimize total inventory costs.

Question 9

What is the bullwhip effect?&#10;A) A fluctuation in demand downstream from a number of suppliers to a customer&#10;B) A fluctuation in demand upstream to a number of suppliers following a small change in demand from the customer&#10;C) A variable inventory cost fluctuation throughout the supply chain&#10;D) A variable inventory quality fluctuation throughout the supply chain

Accepted Answer

The bullwhip effect refers to the phenomenon where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand at the wholesale, distributor, and manufacturer levels. This is due to the amplification of demand signals as they move upstream in the supply chain.

Question 10

A measure of supply chain efficiency which is calculated by dividing the total cost of goods sold over a period by the average aggregate inventory value over that period is called _________?&#10;A) Stock holding&#10;B) Stock taking&#10;C) Stock adjustment&#10;D) Stock turn

Accepted Answer

Stock turn, also known as inventory turnover, is a measure of supply chain efficiency calculated by dividing the total cost of goods sold over a period by the average aggregate inventory value over that period. This metric helps businesses understand how quickly they are selling their inventory.

Deck 6: Managing Materials and Inventory Performa