True/False Indicate whether the
statement is true or false.
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1.
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Excessive inventory ties up your money so that you cannot use it elsewhere in
your business.
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2.
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According to the economy of scale concept, producing larger quantities makes the
production process more efficient, which decreases per unit cost.
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3.
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Just-in-time inventory control keeps the maximum amount of inventory on hand to
meet an unexpected demand for a product.
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4.
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A perpetual inventory control system is a method of taking a physical count of
merchandise at regular intervals.
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5.
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The transfer of electronic orders, confirmations, and invoices between
businesses is known as electronic data interchange.
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6.
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Vendors are companies that sell products to other companies.
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7.
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Product specification is the process of checking goods as tey are received to
ensure that the quality meets expectations.
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8.
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Value is the key to negotiating for quality.
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Multiple Choice Identify the
choice that best completes the statement or answers the question.
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9.
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The process of buying merchandise for resale to customers is called...
a. | Sales Forecasting | c. | Purchasing | b. | Inventory | d. | Quality Control |
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10.
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Each of the following will help you manage inventory to meet customers’
needs EXCEPT...
a. | Selling obsolete inventory | c. | Studying your
market | b. | Identifying purchasing needs | d. | Identifying
vendors |
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11.
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The goods and services a company has on hand for resale to its customers is
its...
a. | Stockout | c. | Productive Merchandise | b. | Buffer
Stock | d. | Inventory |
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12.
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Which of the following is NOT a task associated with inventory
management?
a. | Tracking product orders | b. | Organizing products in
wharehouses | c. | Keeping an adequate assortment of product | d. | Understanding what
the customer wants |
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13.
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Turnover rate indicates...
a. | How quickly invoices are paid | b. | How quickly merchandise
sells | c. | Long-term sales forecasting | d. | Short-term sales
forecasting |
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14.
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Which of the following is NOT a commonly recognized inventory-control
system?
a. | Constant Inventory Control | c. | Perpetual Inventory
Control | b. | Periodic Inventory Control | d. | Just-in-time Inventory Control |
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15.
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To calculate turnover rate, you need to know...
a. | The number of units sold and the monthly supply. | b. | The average number
of units on hand and the monthly supply. | c. | The average number of units on hand and the
number of units sold. | d. | The productive inventory number and the
adequate inventory number. |
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16.
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Many businesses use the 80/20 rule to...
a. | Estimate lead time to process an order | b. | Forecast inventory | c. | Calculate monthly
supply | d. | Calculate turnover rate |
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17.
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To calculate the number of units needed in stock to meet customer demand, you
subtract forecasted units from...
a. | Beginning Inventory Units | c. | The Productive
Inventory | b. | The Monthly Inventory | d. | Additional Units Needed in Stock |
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18.
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The 80/20 rule in inventory forecasting means that...
a. | 20% of sales come from 80% of inventory | b. | 80% of sales come
from 20% of inventory | c. | Your turnover rate is 4 | d. | You have 4 months of
productive inventory on hand |
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19.
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How many steps are involved in managing the purchase process?
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20.
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What is the last step in managing the purchase process?
a. | Selecting the Vendor | c. | Identifying the Vendor | b. | Evaluating the
Vendor | d. | Negotiating the
Purchase |
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21.
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When you insist of value, or getting the highest quality for the lowest price in
the purchase process, you are...
a. | Making the Purchase | c. | Negotiating the Purchase | b. | Receiving the
Order | d. | Selecting the
Vendor |
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22.
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When you are looking over the packing slip to check the contents of your order,
you are...
a. | Receiving the Order | c. | Evaluating the Vendor | b. | Making the
Purchase | d. | Identifying the
Vendor |
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23.
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When you are receiving the purchase order listing the quantities, varieties, and
prices of the product you are ordering, you are in the process of ...
a. | Negotiating the Purchase | c. | Selecting the
Vendor | b. | Making the Purchase | d. | Evaluating the Vendor |
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24.
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Which of the following is one of the keys to stocking the correct
merchandise?
a. | Knowing the Vendor | c. | Knowing the Customer | b. | Knowing the Value of the
Product | d. | Knowing the Correct
Price |
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25.
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Retailers spend an average of ____ cents of every dollar in sales on
inventory.
a. | 20 cents | c. | 80 cents | b. | 50 cents | d. | 70 cents |
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26.
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Inventory management is the process of ...
a. | Storing Products | b. | Keeping an adequate supply of
products | c. | Tracking product orders | d. | All of the
above |
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27.
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What category of carrying cost is associated with clerical work and the physical
handling of inventory?
a. | Inventory-Service Costs | c. | Capital Costs | b. | Storage
Costs | d. | Inventory-Risk
Costs |
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28.
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What category of carrying costs is associated with borrowing cash from lenders
to purchase inventory from vendors?
a. | Inventory-Service Cost | c. | Capital Costs | b. | Storage Costs | d. | Inventory-Risk
Costs |
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29.
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Which inventory control system is categorized by inventory software programs to
track incoming inventory and sales?
a. | Just-in-time | c. | Periodic | b. | Perpetual | d. | Manual |
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30.
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Which inventory control system is categorized by taking a physical count of
merchandise at regular intervals?
a. | Just-in-time | c. | Periodic | b. | Perpetual | d. | Manual |
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31.
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Which inventory control system is considered time consuming?
a. | Just-in-time | c. | Manual | b. | Perpetual | d. | Periodic |
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32.
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Which inventory control system uses POS or Point-of-sale software to record each
sale when it happens?
a. | Just-in-time | c. | Periodic | b. | Perpetual | d. | Manual |
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33.
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Which inventory control system increases efficiency, reduces waste, and frees up
cash for other purchases?
a. | Just-in-time | c. | Periodic | b. | Perpetual | d. | Manual |
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34.
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Which month shows the lowest demand for laptop
computers?
a. | June | c. | January | b. | February | d. | December |
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35.
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What is the total number of unit sales for both
laptops and desktops for the month of March?
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36.
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Why might demand be high in the month of
December?
a. | Holiday Shopping | c. | Everyone has money | b. | Everyone is snowed in | d. | Secret Santa
sales |
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37.
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What were the total forecastes sales for laptop
computers for the entire year?
a. | 2,020 | c. | 560 | b. | 16,885 | d. | 3,380 |
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38.
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According to this purchase order, the products
should be received on...
a. | March 31 | c. | The next day | b. | May 1 | d. | Information is not
available |
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39.
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Who is responsible to determine the correct amount of money to invest in
inventory each year?
a. | The department manager | c. | The business owner | b. | The employee who stocks
shelves | d. | None of the
above |
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40.
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When vendors expect to payment on receipt for products received, which step in
managing the purchase process is in play?
a. | Receiving the order | c. | Evaluating the vendor | b. | Making the
purchase | d. | Paying the
invoice |
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Matching
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Choose the correct term from the list for the definition give below. a. | Buffer Stock | f. | Product Specification Sheet | b. | Invoice | g. | Purchase Order | c. | Lead Time | h. | Receiving Record | d. | Packing
Slip | i. | Stockout | e. | Physical Inventory | j. | Turnover Rate |
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41.
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Running out of stock
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42.
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Document listing the contents of a box or container
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43.
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Vendor’s bill requesting payment for goods shipped or services
provided.
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44.
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The total time from order placement until the order is received by the
customer.
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45.
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Form a buyer sends to a vendor to place an order.
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46.
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Additional stock kept above the minimum amount required to meet forecasted
sales.
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47.
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The number of times inventory has been solde during a specific time
period.
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48.
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Document that describes the size, color, materials, and weight of a
product.
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49.
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Form on which merchandise received is listed when it arrives at the
customer’s business.
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50.
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An actual count of items in iventory.
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