Question 1

Walmart Stores sell the popular Tide detergent brand supplied by Procter and Gamble (P&G).In this case P&G owns and also manages the inventory; however,the inventory is housed in Walmart Stores.Such an arrangement is called

Accepted Answer

This type of arrangement is called Vendor-managed Inventory (VMI), where the supplier (P&G) manages the inventory at the location of the retailer (Walmart).

Question 2

Materials stored to support the functioning of the business are known as ________.

Accepted Answer

The answer of Materials stored to support the functioning of...

Question 3

If a firm turns over inventory once a week,they would have 7 days' worth of inventory on hand.

Accepted Answer

This is correct since if a firm turns over inventory once a week, then they have enough inventory on hand to support their sales for the next 7 days.

Question 4

If a firm turns over inventory once a week,they would have ________ inventory turns per year.

Accepted Answer

The answer of If a firm turns over inventory once...

Question 5

The rate at which firms use up their inventory is known as economic inventory rate.

Accepted Answer

The rate at which firms use up their inventory is known as inventory turnover rate, not economic inventory rate.

Question 6

Classic Car Dealers has an average of 150 cars in inventory.They sold 3000 cars this past year.Assuming 365 days in a work year,how many days' worth of inventory do they carry on average?

Accepted Answer

The answer of Classic Car Dealers has an average of...

Question 7

Vendor-managed inventory is always consignment inventory.

Accepted Answer

Vendor-managed inventory (VMI) refers to a system where the vendor/supplier monitors and manages the inventory levels at a customer's location. While VMI can involve consignment inventory, where the vendor retains ownership of the inventory until it is sold, it can also involve non-consignment inventory where the vendor simply manages the inventory levels but ownership remains with the customer. Therefore, VMI is not always consignment inventory.

Question 8

Inventory turnover is

Accepted Answer

Inventory turnover is calculated by dividing cost of goods sold by average inventory. This formula gives the number of times a company sells and replaces its inventory during a given period.

Question 9

Inputs to production that take the form of either fundamental supplies or subassemblies and components received from suppliers are known as ________.

Accepted Answer

The answer of Inputs to production that take the form...

Question 10

Inventory that is completed and placed into inventory for sale at a later date is known as ________ inventory.

Accepted Answer

The answer of Inventory that is completed and placed into...

Question 11

Products that are waiting to be sold to customers are known as ________ inventory.

Accepted Answer

The answer of Products that are waiting to be sold...

Question 12

If a firm has annual cost of goods sold of $100 million and turn over inventory twice a month,the average inventory they carry would be

Accepted Answer

The average inventory is calculated by dividing the annual cost of goods sold by the number of times inventory is turned over in a year. With an annual cost of goods sold of $100 million and inventory turned over twice a month (which is 24 times a year), the average inventory is $100 million / 24 = $4.167 million.

Question 13

Best Tools maintains an average finished goods inventory of $15 million and its annual cost of goods sold is $180 million.How many times per year do they turn over their inventory?

Accepted Answer

The answer of Best Tools maintains an average finished goods...

Question 14

Products sent directly to customers and not placed in finished goods inventory are known as ________ inventory.

Accepted Answer

The answer of Products sent directly to customers and not...

Question 15

Best Home Cabinets orders wood,their main raw material,from their supplier once every week.The inventory model they are using is known as a ________ model.

Accepted Answer

The answer of Best Home Cabinets orders wood,their main raw...

Question 16

Best Tools turns over inventory once every month and its annual cost of goods sold is $180 million.The amount of average inventory they carry is ________.

Accepted Answer

The answer of Best Tools turns over inventory once every...

Question 17

The rate at which firms use up their inventory is known as ________.

Accepted Answer

The answer of The rate at which firms use up...

Question 18

Inventory turnover is the average inventory divided by total sales.

Accepted Answer

Inventory turnover is total sales divided by average inventory.

Question 19

Inventory that has been received and is in the production phase is known as ________ inventory.

Accepted Answer

The answer of Inventory that has been received and is...

Question 20

Stock that is owned by the supplier but is in the physical possession of the buyer is known as ________.

Accepted Answer

The answer of Stock that is owned by the supplier...

Quiz 9: Inventory Management Fundamentals and Independent Demand

Walmart Stores sell the popular Tide detergent brand supplied by Procter and Gamble (P&G) .In this case P&G owns and also manages the inventory; however,the inventory is housed in Walmart Stores.Such an arrangement is called