MGMT 339 Final Exam Questions and
All Complete Verified Answers.
Inventory - Answer A stock of goods. They are a vital part of business: necessary for operations
and contribute to customer satisfaction. A "typical" firm has roughly 30% of its current assets
and as much as 90% of its working capital invested in inventory.
Independent Demand Items - Answer Items that are ready to be sold or used.
Types of Inventories - Answer - Raw materials and purchased parts
- WIP
- Finished goods inventories or merchandise
- Tools and supplies
- Maintenance and repairs (MRO) inventory
- Goods-in-transit to warehouses or customers (pipeline inventory)
Level of Customer Service (IM) - Answer Having the right goods available in the right quantity
in the right place at the right time
Inventory Management OBJ - Answer To achieve satisfactory levels of customer service while
keeping inventory costs within reasonable bounds
Inventory Management FUNS - Answer - To establish a system for tracking items in inventory
- Make decisions about when and how much to order
Inventory Management EFF REQ - Answer - A system keep track of inventory
- A reliable forecast of demand
- Knowledge of lead time and lead variability
- Reasonable estimates of: holding costs, ordering costs, shortage costs
- A classification system for inventory items
Periodic System - Answer Physical count of items in inventory made at periodic intervals
, Two-bin System - Answer Two containers of inventory; reorder when the first is empty
Forecasts - Answer Inventories are necessary to satisfy customer demands, so it is important
to have a reliable estimates of the amount and timing of demand
Point-of-Sale (POS) Systems - Answer A system that electronically records actual sales. This is
helpful for enhancing forecasting and inventory management.
Lead Time - Answer Time interval between ordering and receiving the order
Purchase Cost - Answer The amount paid to buy the inventory
Holding (carrying) Costs - Answer Cost to carry an item in inventory for a length of time,
usually a year
Ordering Costs - Answer Costs of ordering and receiving inventory
Setup Costs - Answer The costs involved in preparing equipment for a job. Analogous to
Ordering Costs.
Shortage Costs - Answer Costs resulting when demand exceeds the supply of inventory; often
unrealized profit per unit
ABC Classification System - Answer Classifying inventory according to some measure of
importance, and allocating control efforts accordingly
A Items (Very important) - Answer 10-20 percent of the numbers of items in inventory and
about 60-70 percent of the annual dollar value
B Items (Moderately important) - Answer Inventory that is not crazy important, but that also
isn't throw away
C Items (Least important) - Answer 50-60 percent of the number of items in inventory but only
All Complete Verified Answers.
Inventory - Answer A stock of goods. They are a vital part of business: necessary for operations
and contribute to customer satisfaction. A "typical" firm has roughly 30% of its current assets
and as much as 90% of its working capital invested in inventory.
Independent Demand Items - Answer Items that are ready to be sold or used.
Types of Inventories - Answer - Raw materials and purchased parts
- WIP
- Finished goods inventories or merchandise
- Tools and supplies
- Maintenance and repairs (MRO) inventory
- Goods-in-transit to warehouses or customers (pipeline inventory)
Level of Customer Service (IM) - Answer Having the right goods available in the right quantity
in the right place at the right time
Inventory Management OBJ - Answer To achieve satisfactory levels of customer service while
keeping inventory costs within reasonable bounds
Inventory Management FUNS - Answer - To establish a system for tracking items in inventory
- Make decisions about when and how much to order
Inventory Management EFF REQ - Answer - A system keep track of inventory
- A reliable forecast of demand
- Knowledge of lead time and lead variability
- Reasonable estimates of: holding costs, ordering costs, shortage costs
- A classification system for inventory items
Periodic System - Answer Physical count of items in inventory made at periodic intervals
, Two-bin System - Answer Two containers of inventory; reorder when the first is empty
Forecasts - Answer Inventories are necessary to satisfy customer demands, so it is important
to have a reliable estimates of the amount and timing of demand
Point-of-Sale (POS) Systems - Answer A system that electronically records actual sales. This is
helpful for enhancing forecasting and inventory management.
Lead Time - Answer Time interval between ordering and receiving the order
Purchase Cost - Answer The amount paid to buy the inventory
Holding (carrying) Costs - Answer Cost to carry an item in inventory for a length of time,
usually a year
Ordering Costs - Answer Costs of ordering and receiving inventory
Setup Costs - Answer The costs involved in preparing equipment for a job. Analogous to
Ordering Costs.
Shortage Costs - Answer Costs resulting when demand exceeds the supply of inventory; often
unrealized profit per unit
ABC Classification System - Answer Classifying inventory according to some measure of
importance, and allocating control efforts accordingly
A Items (Very important) - Answer 10-20 percent of the numbers of items in inventory and
about 60-70 percent of the annual dollar value
B Items (Moderately important) - Answer Inventory that is not crazy important, but that also
isn't throw away
C Items (Least important) - Answer 50-60 percent of the number of items in inventory but only
