CHAPTER 8: INVENTORY MANAGEMENT

1.........refers to stocks of goods and materials that are maintained for many purposes, the most common being to satisfy normal demand patterns.

• a. logistics
• b. supply chain management
• c. inventory
• d. production

2. Holding high levels of inventory result in........ inventory carrying costs and........stockout costs.

• a. high; high
• b. high; low
• c. low; high
• d. low; low

3.........stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

• a. base
• b. speculative
• c. pipeline
• d. safety

4.........stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.

• a. base
• b. pipeline
• c. speculative
• d. buffer

5.........stock refers to inventory that is en route between various nodes in a logistics system.

• a. base
• b. safety
• c. speculative
• d. cycle
• e. none of the above

6.........stock refers to inventory that is held for several reasons, to include seasonal demand, projected price increases, and potential shortages of product.

• a. base
• b. safety
• c. pipeline
• d. speculative

7.........stock is carried to stimulate demand.

• a. base
• b. psychic
• c. speculative
• d. attractive
• e. none of the above

8. Inventory costs in the United States in the twenty-first century represent approximately........of total logistics costs.

• a. one-fifth
• b. one-fourth
• c. one-third
• d. one-half

9. All of the following statements are true, except:

• a. the importance of individual carrying costs factors (categories) is generally consistent from product to product
• b. inventory carrying costs consist of a number of different components or factors
• c. in general, companies prefer to carry less inventory as carrying costs increase
• d. in general, inventory carrying costs are expressed in percentage terms
• e. all of the above are true

10. Inventory carrying costs in the United States in the twenty-first century have ranged between........ and........percent.

• a. 4; 9
• b. 9; 14
• c. 14; 19
• d. 19; 24