Questions and Answers of Essentials Of Inventory Management

Regarding random locator systems: (a) Each item has an assigned home in a random zone. (b) An item’s home is the location it is in while it is there. (c) An SKU’s storage location must be
Memory location systems: (a) Are simple and efficient. (b) Are human dependent. (c) Require updating of location information. (d) Are useful when a large number of different SKUs must be quickly
Inventory costs generally fall into: (a) Sales expenditures. (b) Work in process. (c) Line during the annual physical inventory. (d) Ordering costs and holding costs.
True or False EDI is when routine business transactions are sent over standard communication lines. (a) True (b) False
True or False Service and repair stock must never be retained beyond 5 years from date of purchase. (a) True (b) False
True or False Anticipation stock is inventory en route from one place to another. (a) True (b) False
Which Article of the Uniform Commercial Code governs the sale of goods? (a) 9 (b) 1 (c) 2 (d) 117
A balance sheet is best described as: (a) A report that identifies a company’s revenues (sales), expenses, and resulting profits for a given period of time. (b) A report that shows the financial
An income statement is best described as: (a) A report that identifies a company’s revenues (sales), expenses, and resulting profits for a given period of time. (b) A report that shows the
True or False The K Factor represents the number of pennies per inventory dollar per year a company is spending to house its inventory. (a) True (b) False
True or False The K Factor is generally expressed as a percentage.(a) True (b) False
Current Assets ÷ Current Liabilities is the formula for which ratio? (a) Inventory Turn Ratio (b) Current Ratio (c) Quick Ratio
Honeycombing is best described as: (a) Product unevenly stacked. (b) Matrix racking or shelving layout. (c) Empty space in usable storage areas. (d) The number of items per level and the number
In relationship to its unloading/loading ratio, an SKU should be placed closer to its point of use if the ratio is: (a) 1:28.(b) 1:1. (c) 3:15. (d) 28:28.
Pareto’s Law holds that: (a) 80 percent of all items account for 80 percent of the dollar value of 20 percent of those items. (b) 20 percent of all items account for 20 percent of the usage value
True or False The Universal Product Code allows for the identification of each individual item sold in a retail environment. (a) True (b) False
True or False There are only five types of bar code languages. (a) True (b) False
True or False The most widely used bar code symbology for nonretail applications is Code 39. (a) True (b) False
True or False When the signals from two or more readers overlap, tag collision occurs.(a) True (b) False
Which symbology is the most widely used for retail point-of sale transactions? (a) Universal Product Code (b) Code 39 (c) Code 128 (d) Codabar
Independent demand is best described as: (a) Erratic purchasing of inventory. (b) One item is needed because of its relationship to another item. (c) Items are impacted by market conditions
Just-in-time manufacturing results in: (a) Right item, right quantity, right place, right time. (b) Right item, right quantity, right place. (c) Right item, right quantity. (d) Larger inventory
Independent demand calls for a(n) ___________ approach to inventory management.
Dependent demand calls for a(n) ___________ approach to inventory management.
The reorder point is the (a) Point in time when a product review is undertaken. (b) Largest quantity of an item you will have on hand or on order. (c) Lowest quantity of an item you will have on
The bill of materials is: (a) Another name for a purchase order. (b) The recipe of raw materials and subassemblies that make up a finished product. (c) The schedule of what will be built, when,
JIT systems regard inventory in excess of current production and R & D needs to be: (a) Safety stock.(b) FIFO inventory. (c) Waste. (d) Part of the kanban system.
True or False. Enterprise Resource Planning software is developed for a single user’s requirements. (a) True (b) False
Cycle counting is: (a) Counting a statistically significant cross-section of your inventory frequently. (b) Counting everything in your facility at least twice per calendar or fiscal year. (c)
Flow charts allow you to: (a) Analyze the sequential sequence of a set of events. (b) Determine trends. (c) Compare a projected value against an actual one. (d) Create a report that identifies
Run charts allow you to: (a) Analyze the sequential sequence of a set of events. (b) Determine trends. (c) Compare a projected value against an actual one. (d) Create a report that identifies the
True or False The diminishing population method of cycle counting involves counting items when that SKU’s stock level reaches zero. (a) True (b) False
Fill rates indicate: (a) How much of a particular SKU you have in stock at the end of a calendar month. (b) The quantitative nature of your inventory. (c) If you had what you needed when you