Inventory Management Practice Flashcards

Fill-in-the-blank practice flashcards generated from lecture notes on inventory management concepts, costs, and control methods.

Inventory or stock is defined as the goods and materials that a business holds for the ultimate goal of resale__________.

resale

Inventory can exist in the form of raw-materials, semi finished goods, and __________.

Finished goods

The five key principles of inventory management are demand forecasting, warehouse flow, inventory turns/stock rotation, cycle counting, and __________.

process auditing

Among the five principles of inventory management, __________ forecasting has the highest potential savings.

Demand

Lean manufacturing concepts incorporated into warehouse flow include __________, which consists of sorting, setting order, systemic cleaning, standardizing, and sustaining.

5S

Managing inventory down to lot numbers to minimize business costs is particularly critical in industries such as pharmaceuticals, foodstuffs, and __________ warehousing.

chemical

Counting a small amount of inventory in the warehouse each day with the intent of counting the entire inventory over time is known as __________ counting.

cycle

In inventory management, total inventory cost is calculated as $\text{TC} = \text{Ordering Costs} + \text{Holding Costs} + \text{\_\_\_\_\_\_\_\_\_\_}$.

Stock out costs

Ordering costs are irrelevant to the __________ of the order and are incurred every time a firm places an order.

size

Examples of __________ costs include money tied up in inventory, storage costs, insurance premiums, taxes, inventory obsolescence, and spoilage.

carrying

Stockout costs consist of internal costs like delays and lost production, and external costs like loss of profit from lost sales and loss of __________.

goodwill

In the Economic Order Quantity model diagram below, total inventory cost reaches its minimum at the quantity where the holding costs curve intersects the __________ curve.

ordering costs

Bulk shipments help reduce total costs primarily by decreasing the frequency of ordering, which directly reduces __________ costs.

ordering

The logistical strategy where inbound materials are unloaded and immediately moved onto outbound transportation with minimal storage time is called __________.

cross docking

A supply chain strategy where a company purchases items from a third party only after a customer orders, shipping directly to the customer, is known as __________.

drop shipping

In the ABC inventory model, Item A represents goods that account for top $70\%$ to $80\%$ of yearly consumption value but comprise only $10\%$ to __________$\%$ of total inventory items.

$$20$$

In the ABC model, Item B goods amount to about $30\%$ of total inventory and account for $15\%$ to __________$\%$ of annual consumption value.

$$20$$

In the ABC inventory model, Item C accounts for less than __________$\%$ of the annual consumption value.

$$5$$

An order for a good or service that cannot be filled at the current time due to a lack of available supply is called a __________.

backorder

The inventory strategy aimed at increasing efficiency and reducing waste by receiving goods only as they are needed in the production process is __________.

Just In Time

In __________ inventory, goods are stored at the buyer's business unit without paying the supplier until after the goods are consumed or sold.

consignment