ODM Ch 12 Test With
Solution
Raw material inventory - ANSWER materials that are usually purchased but
have yet to enter the manufacturing process
work-in-process (WIP) inventory - ANSWER products or components that are
no longer raw materials but have yet to become finished products
MRO - ANSWER maintenance, repair, and operating materials
finished-goods inventory - ANSWER an end item ready to be sold, but still an
asset on the company's books.
ABC analysis - ANSWER a method for dividing on-hand inventory into three
classifications based on annual dollar volume.
cycle counting - ANSWER a continuing reconciliation of inventory with
inventory records
, shrinkage - ANSWER retail inventory that is unaccounted for between receipt
and sale.
pilferage - ANSWER a small amount of theft
holding cost - ANSWER the cost to keep or carry inventory in stock.
ordering cost - ANSWER the cost of the ordering process
setup cost - ANSWER the cost to prepare a machine or process for
production
setup time - ANSWER the time required to prepare a machine or process for
production
economic order quantity (EOQ) model - ANSWER an inventory-control
technique that minimizes the total of ordering and holding costs
robust - ANSWER giving satisfactory answers even with substantial variation
in the parameters
Solution
Raw material inventory - ANSWER materials that are usually purchased but
have yet to enter the manufacturing process
work-in-process (WIP) inventory - ANSWER products or components that are
no longer raw materials but have yet to become finished products
MRO - ANSWER maintenance, repair, and operating materials
finished-goods inventory - ANSWER an end item ready to be sold, but still an
asset on the company's books.
ABC analysis - ANSWER a method for dividing on-hand inventory into three
classifications based on annual dollar volume.
cycle counting - ANSWER a continuing reconciliation of inventory with
inventory records
, shrinkage - ANSWER retail inventory that is unaccounted for between receipt
and sale.
pilferage - ANSWER a small amount of theft
holding cost - ANSWER the cost to keep or carry inventory in stock.
ordering cost - ANSWER the cost of the ordering process
setup cost - ANSWER the cost to prepare a machine or process for
production
setup time - ANSWER the time required to prepare a machine or process for
production
economic order quantity (EOQ) model - ANSWER an inventory-control
technique that minimizes the total of ordering and holding costs
robust - ANSWER giving satisfactory answers even with substantial variation
in the parameters
