APICS CSCP > Module 4.3 - Inventory > Flashcards

Module 4.3 - Inventory Flashcards

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1
Q

Which type of inventory includes purchase parts, materials, or sub assemblies to a production process that has been acquired but have not yet entered production?

A

Raw materials

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2
Q

What type of inventory is considered to be a good or goods in various stages of completion throughout the plant?

A

Work in process

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3
Q

What type of inventory includes the finished, ready to use products waiting to be purchased by the customer?

A

Finished goods

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4
Q

What type of inventory includes material moving between two or more locations?

A

In-transit inventory

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5
Q

What type of inventory includes spare parts and supplies that are needed to maintain production, but are not in the final product?

A

Maintenance,/Repair/operating (MRO) inventory

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6
Q

What is known as the additional inventory to cover projected trends of increased sales?

A

Anticipation inventory

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7
Q

What inventory is considered to be maintained in order to keep throughput steady at work centers?

A

Buffer inventory

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8
Q

What type of inventory is kept in stock to protect against fluctuations in demand or supply?

A

Safety stock

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9
Q

What inventory does a company hold to protect against potential future shortages, price increases, or other disruptions?

A

Hedge inventory

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10
Q

What is known as the strategic separation of different parts of the supply chain to isolate them from variability and disruptions?

A

Decoupling

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11
Q

What is known as the cost required to obtain one or more units of an item?

A

Acquisition cost

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12
Q

What is known as the cost of a product including the cost of logistics?

A

Landed cost

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13
Q

What is known as the total expense of holding unsold inventory over a period of time?

A

Carrying/Holding cost

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14
Q

What type of cost varies only by the frequency of ordering rather than the quantities ordered?

A

Ordering cost

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15
Q

What is known as an unfulfilled customer order or commitment?

A

Backorder

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16
Q

What is known as the activities and techniques of determining the desired levels of material?

A

Inventory planning

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17
Q

What is the difference between centralized and decentralized inventory?

A

Decentralized inventory involves each supply chain stage determining its own inventory requirements and placing orders independently.

Centralized inventory is when inventory is pushed out to later stages in the supply chain by the lead organization or channel master

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18
Q

Which type of inventory planning can lead to the bullwhip effect?

A

Decentralized inventory

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19
Q

What two types of inventory planning has grown in popularity?

A

Centralized and hybrid

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20
Q

What is known as a place to receive, store, and ship materials?

A

Warehouse

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21
Q

What is a type of warehouse where demand-driven distribution to retailers occurs?

A

Distribution center

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22
Q

What is known as a level supply chain nodes?

A

Echelon

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23
Q

Which branch of business management is concerned with planning and controlling inventories?

A

Inventory management

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24
Q

What is known as the extent to which inventory information is shared within a firm and with supply chain partners?

A

Inventory visibility

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25
What is a way to formalize the results of strategic inventory decisions so that they can be implemented consistently?
Inventory policy
26
Since aggregate inventory management is primarily concerned with the financial impact of inventory, what is their main inventory priority?
To get to the optimal level of inventory that can produce the greatest overall profit
27
When forecasting supply and demand patterns, what is more accurate, aggregate-level forecasts or item-level forecasts? Why
Aggregate-level Aggregate-level forecasts reduces the variability in data
28
What type of classification involves a group of items in decreasing order of annual dollar volume or other criteria?
ABC Classification
29
With ABC Classification, what percent by number of items and by projected dollar volume does the A-group represent?
10-20% by # of items 50-70% by $ volume
30
With ABC Classification, what percent by number of items and by projected dollar volume does the B-group represent?
20% by # of items 20% by $ volume
31
With ABC Classification, what percent by number of items and by projected dollar volume does the C-group represent?
50% by # of items 10-30% by $ volume
32
What does the ABC principle stat in regards to saving effort and money?
Effort and money can be saved by applying looser controls to the low $ volume class items than the high $ class items.
33
What is the Pareto principle?
In any population, a small percentage of the population (~20%) will be responsible for a large portion of the group's impact.
34
What type of inventory management is typically used in short-term operational decision making?
Item Inventory Management
35
What is the optimal way of balancing inventory cost?
Keep a high inventory turnover ratio and a short cash-to-cash cycle time
36
What is commonly referenced to determine if the flow of materials is efficient and effective in maximizing profits?
Financial statements
37
Assets = L_______ + O______ E_______
Assets = Liabilities + Owner's Equity
38
What financial statement is used to determine if a company has made or lost money during a specific period of time?
Income statement
39
What is more effective reducing Cost of Goods Sold (COGS) or increasing sales volume?
Reducing COGS
40
What is known as the activities and techniques of maintaining the desired levels of inventory?
Inventory control
41
What 2 models can managers use to determine how much inventory to order?
Lot-for-Lot fixed order quantity (FOQ)
42
Which ordering model generates plan orders and quantities equal to the net requirements in each period? Aka. Organizations order no more and no less inventory than is needed.
Lot for lot
43
Which ordering model will always cause planned or actual orders to be generated for a predetermined fixed quantity?
Fixed order quantity
44
Which ordering model really only works if the customer demand is very stable over the long term?
Fixed order quantity
45
Which ordering model is a refinement of fixed order quantity and determines the most cost effective fixed order size when replenishing inventory?
Economic order quantity
46
What is the main benefit of the economic order quantity model?
Even if there are considerable variations in the cost figures, the model tends to vary within a fairly small range
47
What is known as inventory models for the replenishment of inventory?
Inventory ordering system
48
What determines the inventory level, or point, at which a reorder must be placed?
Order point system
49
In an order point system, is the time between replenishment orders fixed or vary?
Varies
50
What is the order point based on?
The average demand during the lead time
51
Which ordering system sets a base stock level based on what is needed to maintain effective and continuous operations?
Periodic review system
52
In the periodic review system, our order intervals fixed or vary?
Fixed
53
In the periodic review system, when are inventory levels reviewed?
At the end of each period, most common format is quarter 1, 2, 3, and 4
54
Which ordering system allows order timing and order amount to be varied?
Min-Max System
55
When are orders submitted in the Min-Max System?
When inventory has fallen below the minimum point
56
Which ordering system checks whether an item will fall below the order point during the order horizon rather than waiting until the inventory drops below a certain point?
Time-Phased Order Point System (TPOP)
57
Which ordering system is useful for parts maintained in low volumes?
Time-Phased Order Point System (TPOP)
58
Which ordering system is relatively new and dynamically determines the best places to position inventory and dynamically adjust the size of the buffer inventories to maximize return on investment for the inventory?
Demand driven MRP system
59
How often does the demand driven MRP system perform reviews?
Daily
60
What are the three basic methods for determining the amount of safety stock to maintain?
Fixed amount, coverage, statistical
61
What is known as an element of time added to the normal lead time to protect against fluctuations in lead time so that an order can be completed before it's real needed date?
Safety lead time
62
What is known as the ability to manage product data for the life cycle of a product or service with a high level of data integrity?
Configuration management
63
Product traceability and configuration management also affect T_______ A_______ such as F________ T_______ Z_______.
Trade Agreements Free Trade Zone
64
What type of inventory counting involves shutting down the facility once a year and sending a large group of employees into an area to count every item?
Periodic counting
65
What is known as the planning for the phase-out of one product and the phase-in of a new product?
End-of-life management
66
What is a quantitative forecasting technique the covers introduction, growth, maturity, saturation, and decline of similar products to a new product family?
Life cycle analysis
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