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Inventory/Purchasing Questions

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Title: Inventory/Purchasing Questions Author: COB_user Last modified by: wsr0001 Created Date: 2/18/2008 11:55:39 PM Document presentation format – PowerPoint PPT presentation

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Title: Inventory/Purchasing Questions


1
Inventory/PurchasingQuestions
  • Top Secret

2
1.Which of the following is NOT one of
the five purposes that inventory serves?
  1. Prevents economies of scale
  2. Balances supply and demand
  3. Enables specialization in manufacturing
  4. Provides protection from uncertainties in demand
    and order cycle time
  5. Acts as a buffer between critical interfaces
    within the supply chain

3
1.Which of the following is NOT one of the five
purposes that inventory serves?
  • Prevents economies of scale
  • Balances supply and demand
  • Enables specialization in manufacturing
  • Provides protection from uncertainties in demand
    and order cycle time
  • Acts as a buffer between critical interfaces
    within the supply chain

4
2.Variability in demand increases safety stock.
  1. True
  2. False

5
2.Variability in demand increases safety stock.
  • True
  • False

6
3.Speculative stock is held in inventory because
of
  1. Demand uncertainty
  2. Forecasted price increases
  3. Variability in lead times
  4. Manufacturing requirements

7
3.Speculative stock is held in inventory because
of
  1. Demand uncertainty
  2. Forecasted price increases
  3. Variability in lead times
  4. Manufacturing requirements

8
4.Seasonal stock is used to prevent stockouts.
  1. True
  2. False

9
4.Seasonal stock is used to prevent stockouts.
  • True
  • False

10
5. Dead stock is
  1. Ready to be shipped
  2. Being held for extended periods of time
  3. The same as safety stock
  4. Stock that is obsolete

11
5. Dead stock is
  • Ready to be shipped
  • Being held for extended periods of time
  • The same as safety stock
  • Stock that is obsolete

12
6. The economic order quantity model (EOQ)
  1. Eliminates inventory carrying costs
  2. Maximizes output
  3. Minimizes the total of inventory carrying costs
    and ordering costs
  4. Has no effect on inventory carrying costs

13
6. The economic order quantity model (EOQ)
  • Eliminates inventory carrying costs
  • Maximizes output
  • Minimizes the total of inventory carrying costs
    and ordering costs
  • Has no effect on inventory carrying costs

14
7. Which of the following does NOT influence
forecasting accuracy?
  1. Economic conditions
  2. Competitive actions
  3. Changes in government regulations
  4. Market shifts
  5. All of the above influence forecasting accuracy

15
7. Which of the following does NOT influence
forecasting accuracy?
  • Economic conditions
  • Competitive actions
  • Changes in government regulations
  • Market shifts
  • All of the above influence forecasting accuracy

16
8. ______ represents the magnitude of a stockout.
  1. Fill rate
  2. EOQ
  3. Replenishment cycle
  4. Fixed Order Interval Model

17
8. ______ represents the magnitude of a stockout.
  • Fill rate
  • EOQ
  • Replenishment cycle
  • Fixed Order Interval Model

18
9. The Fixed Order Interval Model is used when
orders must be placed at fixed time intervals.
  1. True
  2. False

19
9. The Fixed Order Interval Model is used when
orders must be placed at fixed time intervals.
  • True
  • False

20
10. In a fixed-quantity arrangement, orders are
triggered by a time.
  1. True
  2. False

21
10. In a fixed-quantity arrangement, orders are
triggered by a time.
  • True
  • False

22
11. Which of the following is not a goal of
purchasing?
  1. Keep inventory investment and loss at a minimum
  2. Find or develop competent suppliers
  3. Forecast accurate demand for materials purchased
  4. Purchase items and services at lowest total cost

23
11. Which of the following is not a goal of
purchasing?
  • Keep inventory investment and loss at a minimum
  • Find or develop competent suppliers
  • Forecast accurate demand for materials purchased
  • Purchase items and services at lowest total cost

24
12. In the acquisition process, the most
important activity is thought to be
  1. Purchasing the right quantity
  2. Selecting the best supplier
  3. Purchasing materials and services at lowest cost
  4. Minimize lead time

25
12. In the acquisition process, the most
important activity is thought to be
  • Purchasing the right quantity
  • Selecting the best supplier
  • Purchasing materials and services at lowest cost
  • Minimize lead time

26
13. Which of the following is NOT a major product
category that is purchased by most companies?
  1. Component parts
  2. Raw materials
  3. Operating supplies
  4. Process equipment
  5. All of the above are major categories purchased
    by most companies

27
13. Which of the following is NOT a major product
category that is purchased by most companies?
  • Component parts
  • Raw materials
  • Operating supplies
  • Process equipment
  • All of the above are major categories purchased
    by most companies

28
14. Supplier certification is thought to be
better than inspection programs.
  1. True
  2. False

29
14. Supplier certification is thought to be
better than inspection programs.
  • True
  • False

30
15. Just in time is
  1. A specific method of managing inventory
  2. More of a philosophy of doing business
  3. Uses detailed specifications
  4. Promotes safety stock

31
15. Just in time is
  • A specific method of managing inventory
  • More of a philosophy of doing business
  • Uses detailed specifications
  • Promotes safety stock

32
16. Which of the following is not an important
part of JIT?
  1. Safety Stock
  2. Buyer/Supplier Communication
  3. Purchaser/Supplier relationship
  4. All of the above are important parts of JIT

33
16. Which of the following is not an important
part of JIT?
  • Safety Stock
  • Buyer/Supplier Communication
  • Purchaser/Supplier relationship
  • All of the above are important parts of JIT

34
17. Which of the following is not an issue
related to supplier selection?
  1. Quality control methods
  2. Supplier proximity
  3. Manufacturing flexibility
  4. Lead time reliability
  5. All of the above are issues related to supplier
    selection

35
17. Which of the following is not an issue
related to supplier selection?
  • Quality control methods
  • Supplier proximity
  • Manufacturing flexibility
  • Lead time reliability
  • All of the above are issues related to supplier
    selection

36
18. JIT manufacturers and their suppliers
generally have short term contracts
  1. True
  2. False

37
18. JIT manufacturers and their suppliers
generally have short term contracts
  • True
  • False

38
19. Which of the following is not a benefit of
JIT?
  1. Lower inventory carrying costs
  2. Production levels are relatively level
  3. Demand for materials is more predictable
  4. Increased sales

39
19. Which of the following is not a benefit of
JIT?
  • Lower inventory carrying costs
  • Production levels are relatively level
  • Demand for materials is more predictable
  • Increased sales

40
20. An In-Plant Representative
  1. Is a supplier in the buying companys office
  2. Often replaces a purchaser, planner, and a
    salesperson
  3. Is associated with JIT II
  4. All of the above

41
20. An In-Plant Representative
  • Is a supplier in the buying companys office
  • Often replaces a purchaser, planner, and a
    salesperson
  • Is associated with JIT II
  • All of the above

42
21. Typical Criteria to use in identifying
critical purchases are
  1. Percentage of product cost
  2. Percentage of total purchase expenditure
  3. Use on high-margin end items
  4. A and C
  5. All of the above

43
21. Typical Criteria to use in identifying
critical purchases are
  • Percentage of product cost
  • Percentage of total purchase expenditure
  • Use on high-margin end items
  • A and C
  • All of the above

44
22. All of the following are ways to reduce
inventory levels except
  1. Lead time analysis
  2. Measurement of fill rate by SKU
  3. Eliminating high turnover
  4. Analysis of customer demand characteristics
  5. All of the above

45
22. All of the following are ways to reduce
inventory levels except
  • Lead time analysis
  • Measurement of fill rate by SKU
  • Eliminating high turnover
  • Analysis of customer demand characteristics
  • All of the above

46
23. All of the following are symptoms of poor
inventory management except
  1. Decreasing number of backorders
  2. Increasing number of orders being canceled
  3. Large quantities of obsolete items
  4. Wide variance in inventory turnover
  5. All of the above

47
23. All of the following are symptoms of poor
inventory management except
  1. Decreasing number of backorders
  2. Increasing number of orders being canceled
  3. Large quantities of obsolete items
  4. Wide variance in inventory turnover
  5. All of the above

48
24. The idea behind ABC analysis is that 20 of a
firms customers or products accounts for 80 of
the sales
  1. True
  2. False

49
24. The idea behind ABC analysis is that 20 of a
firms customers or products accounts for 80 of
the sales
  • True
  • False

50
25. Many companies use ERP systems to improve
  1. Materials management
  2. Plant management
  3. Quality management
  4. Production planning and control
  5. All of the above

51
25. Many companies use ERP systems to improve
  • Materials management
  • Plant management
  • Quality management
  • Production planning and control
  • All of the above

52
26. A primary goal of inventory management is to
achieve an optimum balance between inventory
carrying costs and customer service.
  1. True
  2. False

53
26. A primary goal of inventory management is to
achieve an optimum balance between inventory
carrying costs and customer service.
  • True
  • False

54
27. Cost reduction and cost avoidance programs
include all of the following except
  • Supplier development
  • Standardization
  • Make or Buy analysis
  • Increase in inventory

55
27. Cost reduction and cost avoidance programs
include all of the following except
  • Supplier development
  • Standardization
  • Make or Buy analysis
  • Increase in inventory

56
28. Which of the following is not a performance
measure?
  1. Price effectiveness
  2. Value analysis
  3. Material flow control
  4. Cost savings
  5. All of the above

57
28. Which of the following is not a performance
measure?
  • Price effectiveness
  • Value analysis
  • Material flow control
  • Cost savings
  • All of the above

58
29. System contracts are a means of reducing
materials related costs
  1. True
  2. False

59
29. System contracts are a means of reducing
materials related costs
  • True
  • False

60
30. All of the following are objectives of system
contracts and stockless purchasing except
  1. Lower inventory levels
  2. Increase in number of suppliers
  3. Reduction in administrative cost and paperwork
  4. Timely delivery of material directly to user
  5. All of the above

61
30. All of the following are objectives of
system contracts and stockless purchasing except
  • Lower inventory levels
  • Increase in number of suppliers
  • Reduction in administrative cost and paperwork
  • Timely delivery of material directly to user
  • All of the above

62
31. ______ is a physical resource that a firm
holds in stock with the intent of selling it or
transforming it into a more valuable state.
  1. Raw materials
  2. Work-in-process
  3. Inventory
  4. Finished goods

63
31. ______ is a physical resource that a firm
holds in stock with the intent of selling it or
transforming it into a more valuable state.
  • Raw materials
  • Work-in-process
  • Inventory
  • Finished goods

64
32. Inventory impacts all of the following except
  1. Customer Satisfaction
  2. Logistics activity performance
  3. Company performance
  4. Forecasting accuracy
  5. All of the above are impacted by inventory

65
32. Inventory impacts all of the following except
  • Customer Satisfaction
  • Logistics activity performance
  • Company performance
  • Forecasting accuracy
  • All of the above are impacted by inventory

66
33. Which of the following is not an objective of
inventory?
  1. Fulfill corporate policies and goals
  2. Create customer demand
  3. Minimize total logistics activities
  4. Promote corporate profitability
  5. All of the above are objectives of inventory

67
33. Which of the following is not an objective of
inventory?
  • Fulfill corporate policies and goals
  • Create customer demand
  • Minimize total logistics activities
  • Promote corporate profitability
  • All of the above are objectives of inventory

68
34. The three types of inventory are
69
34. The three types of inventory are
  • Raw materials
  • Work-in-process
  • Finished goods

70
35. Which of the following is not a key decision
of inventory?
  1. How much to order
  2. When to order
  3. Where to hold inventory
  4. When to substitute transportation for inventory
  5. All of the above are key decisions of inventory

71
35. Which of the following is not a key decision
of inventory?
  • How much to order
  • When to order
  • Where to hold inventory
  • When to substitute transportation for inventory
  • All of the above are key decisions of inventory

72
36. Which of the following is NOT an aspect of
inventory that must be managed?
  1. Holding costs
  2. Number of products
  3. Value analysis
  4. Lead time
  5. All of the above are aspects of inventory that
    must be managed

73
36. Which of the following is NOT an aspect of
inventory that must be managed?
  • Holding costs
  • Number of products
  • Value analysis
  • Lead time
  • All of the above are aspects of inventory that
    must be managed

74
37. All of the following are internal
measurements of inventory except
  1. Inventory turn
  2. Selling days on hand
  3. Backorder level
  4. Inventory sales to ratio
  5. All of the above are internal measurements

75
37. All of the following are internal
measurements of inventory except
  • Inventory turn
  • Selling days on hand
  • Backorder level
  • Inventory sales to ratio
  • All of the above are internal measurements

76
38. Which of the following is NOT an external
measurement of inventory?
  1. Customer service level
  2. Customer delivery quantity
  3. Customer delivery cycle time
  4. ABC analysis

77
38. Which of the following is NOT an external
measurement of inventory?
  • Customer service level
  • Customer delivery quantity
  • Customer delivery cycle time
  • ABC analysis

78
39. All of the following are symptoms of poor
inventory management except
  1. Decreasing numbers in backorders
  2. Higher customer turnover rate
  3. Periodic lack of storage space
  4. Increasing number of canceled orders
  5. All of the above are symptoms of poor inventory
    management

79
39. All of the following are symptoms of poor
inventory management except
  • Decreasing numbers in backorders
  • Higher customer turnover rate
  • Periodic lack of storage space
  • Increasing number of canceled orders
  • All of the above are symptoms of poor inventory
    management

80
40. Which of the following is NOT a strategy to
manage inventory?
  1. ABC analysis
  2. Real-time visibility
  3. Inventory models
  4. Centralized decision making
  5. All of the above are strategies to manage
    inventory

81
40. Which of the following is NOT a strategy to
manage inventory?
  • ABC analysis
  • Real-time visibility
  • Inventory models
  • Centralized decision making
  • All of the above are strategies to manage
    inventory
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