Question 1

Inventory is only products that are made and stored.

Accepted Answer

Inventory can also include raw materials and work-in-progress goods, not only finished products that are stored.

Question 2

Inventory is a product or service that we could make or provide after the customer asks for it, but we choose to make and store now.

Accepted Answer

Inventory refers to products or services that are made or provided in advance of customer demand and are stored until needed, rather than being produced or provided only in response to customer orders.

Question 3

Raw materials such as steel and car parts in an auto plant waiting to be turned into cars are inventory, but semi-finished cars are not inventory.

Accepted Answer

Semi-finished cars are considered inventory because they are still in the production process and have not yet been sold to customers.

Question 4

The help or FAQ section of any website can be considered as service inventory.

Accepted Answer

The help or FAQ section of a website provides a service to the users by providing answers to common questions and helping them navigate the site effectively. Therefore, it can be considered as part of the service inventory of the website.

Question 5

Businesses carry inventory because of the certainty of demand.

Accepted Answer

Businesses carry inventory to meet uncertain demand and avoid stockouts.

Question 6

The need for inventory lessens as the uncertainty in future demand, prices, and product availability diminishes.

Accepted Answer

This is because if there is less uncertainty, companies can better predict demand and adjust their inventory levels accordingly, reducing the need for excess inventory.

Question 7

Inventory management is a data-driven approach to improving product availability without other concerns.

Accepted Answer

Inventory management involves balancing product availability with other concerns such as minimizing holding costs, reducing stockouts, and optimizing order quantities. It is not solely focused on improving product availability.

Question 8

Effective inventory management targets reducing inventory levels through the application of inventory models.

Accepted Answer

Effective inventory management involves reducing inventory levels to minimize holding costs and increase cash flow. This is typically achieved through the use of inventory models such as Economic Order Quantity (EOQ) or Just-In-Time (JIT) inventory management.

Question 9

The goal of inventory management, in most cases, is to maximize revenues by avoiding or minimizing stock-outs.

Accepted Answer

The answer of The goal of inventory management, in most...

Question 10

Inventory management making data driven-decisions on what is to be stored, how much is to be stored, and when to replenish inventory stock.

Accepted Answer

This accurately describes the role and purpose of inventory management.

Question 11

Physical inventory generally exists in two forms: raw materials and finished goods.

Accepted Answer

Physical inventory can exist in three main forms: raw materials, work-in-process (WIP), and finished goods.

Question 12

Work-in-process inventory is inventory in various stages of completion and includes components and subassemblies.

Accepted Answer

Work-in-process inventory consists of all materials and subassemblies that are in various stages of completion in the manufacturing process. It is considered an asset on a company's balance sheet.

Question 13

Inventory can also be described in terms of how it has been acquired: cyclically or annually.

Accepted Answer

Inventory is typically described in terms of its turnover rate, such as cyclically or seasonally, rather than how it has been acquired.

Question 14

Phantom inventory is inventory that exists in the mind of the customer but not in the store.

Accepted Answer

Phantom inventory refers to items that appear to be available in a store's inventory system but are actually not present in the stock, often due to errors in inventory management or theft.

Question 15

Technology such as an RFID (radio frequency identification device) provides a way to query and track the physical location of inventory.

Accepted Answer

RFID technology uses radio waves to identify and track objects, including inventory. It can provide real-time location information that can be used for inventory management and supply chain optimization.

Question 16

UPS codes are standard codes that are provided by the manufacturer of the product.

Accepted Answer

UPS codes (or Universal Product Codes) are standardized codes that are assigned by the non-profit organization GS1. They are not provided by the manufacturer of the product.

Question 17

Inventory management is important because it can contribute substantially to corporate performance and profits.

Accepted Answer

Effective inventory management can help to reduce costs, improve customer satisfaction, minimize waste and obsolescence, and increase productivity and efficiency, leading to higher profits and overall success for a company.

Question 18

Increasing the inventory turnover ratio increases revenues.

Accepted Answer

Increasing the inventory turnover ratio means selling goods quickly, which increases revenue.

Question 19

Higher inventory turnover will lead to lower inventory levels and cash savings.

Accepted Answer

Higher inventory turnover means a company is selling its inventory quickly, leading to lower inventory levels. This results in cash savings since the company is not tying up as much capital in inventory.

Question 20

Inventory decisions only affect accounting and operations functions in an organization.

Accepted Answer

Inventory decisions also have a significant impact on sales, marketing, and customer satisfaction.

Quiz 8: Managing Inventory