$1.$ Select the correct answer. $1\mathrm{.}1.$ How would you describe the inventory that inventory management focuses on$?$ i$.$ The stock of products, materials and supplies carried by a business organisation for the purpose of: ii$.$ Sale to satisfy outside customer demand. business such as stationary, printing paper and cartridges. house production. v$.$ Providing refreshments to employees. $(1)($a$)$ i$,$ ii$,$ iii, iv$,$ v $($b$)$ i$,$ iii, iv $($c$)$ i$,$ iii, iv$,$ v $($d$)$ i$,$ ii$,$ iv $($e$)$ i$,$ iv$,$ v iii. Functioning of the iv$.$ Providing inputs for in$1\mathrm{.}2.$ Which ONE of the following is NOT one of the reasons why organisations carry inventory? $(1)($a$)$ To act as a buffer$/$hedge against uncertainties. $($b$)$ To outline the different costs associated with inventory. $($c$)$ To make use of the Economies of Scale principle. $($d$)$ To take advantage of price discounts on bulk buying. $1\mathrm{.}3.$ How would you describe the customers of inventory management and what they do$?$ i$.$ It refers to retailers, manufacturers, and suppliers ii$.$ Retailers need to carry sufficient stock in anticipation of customer demand iii. Suppliers of raw materials serve their clients $($manufacturer$)$ who use it in production. iv$.$ Inventory has no effect on the flow of operations. v$.$ Manufacturers are the customers of suppliers of parts or components used in production. $(1)($a$)$ i$,$ ii$,$ iii, iv$,$ v $($b$)$ i$,$ ii$.$ iii, v $($c$)$ ii$,$ iii, iv$,$ v $($d$)$ i$,$ ii$,$ iv $($e$)$ i$,$ iii, iv$,$ v $4.1\mathrm{.}4.$ Which cost of a stock$-$out occurs when unsatisfied clients decide to make use of a competing, or new, supplier in future? $(1)($a$)$ The cost of a lost sale $($b$)$ Handling cost $($c$)$ The cost of a backorder $($d$)$ The cost of a lost customer $1\mathrm{.}5.$ Late deliveries, short$-$shipments and poor$-$quality materials from suppliers are part of the uncertainties which organisations can carry additional inventory of raw materials, parts, components and finished goods over and above what is normally demanded. This is called: $(1)($a$)$ Decoupling. $($b$)$ Buffer stock. $($c$)$ Economies of scale. $($d$)$ Stock$-$out. $1\mathrm{.}6.$ Which of the following is not one of the different types of inventory based on their position and flow in the supply chain?$(1)($a$)$ Work$-$in$-$process or work$-$in$-$progress. $($b$)$ Maintenance, repair, and operational supplies $($MROs$).($c$)$ Raw materials, parts, and components. $($d$)$ Cycle stock or lot$-$size inventory. $1\mathrm{.}7.\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ is inventory held for reasons other than satisfying current or normal da to$-$day customer demand.$(1)($a$)$ Speculative stock. $($b$)$ Cycle stock required to meet average customer demand. $($c$)$ Safety or buffer stock. $($d$)$ In$-$transit inventory. $($e$)$ Seasonal stock. $1\mathrm{.}8.$ Which one of the following is not an indication of good inventory management? $1($a$)$ Apply the correct stock planning techniques. $(1)($b$)$ Low inventory turnover rates because of the application of the LIFO stock rotation instead of the FIFO approach. $($c$)$ Keep stock levels to a minimum. $($d$)$ Initiate proactive purchasing to ensure no last minute rushing or stock$-$outs occur. $($e$)$ Minimise unnecessary stock holding thus reducing carrying cost.