Business Quiz: Inventory Management

10 Questions | Total Attempts: 434

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Inventory Quizzes & Trivia

Questions and Answers
  • 1. 
    Which of the following statements is most accurate about inventory management?
    • A. 

      Inventories and production must be managed together

    • B. 

      Inventory is not important at the production planning level

    • C. 

      Inventories are usually insignificant on the balance sheet

    • D. 

      Inventory does not cost much to carry

  • 2. 
    What is the name of materials used in the production process that do not become part of the product?
    • A. 

      Raw materials

    • B. 

      Work in process

    • C. 

      Finished goods

    • D. 

      Maintenance, repair, and operating supplies

  • 3. 
    What is the name given to inventories of items that are purchased or manufactured in quantities greater than needed immediately?
    • A. 

      Fluctuation inventory

    • B. 

      Lot size inventory

    • C. 

      Transportation inventory

    • D. 

      Scheduled receipts

  • 4. 
    Which of the following comapny objectives are in conflict?
    • A. 

      Maximum customer service and low-cost plant operation

    • B. 

      Low-cost plant operation and cash flow

    • C. 

      Maximum inventory investment and customer service

    • D. 

      Cash flow and profitability

  • 5. 
    Which of the following costs will increase if order quantity is increased?
    • A. 

      Annual cost of carrying inventory

    • B. 

      Cost of ordering

    • C. 

      Cost of manufacturing operations

    • D. 

      Cost of customer service

  • 6. 
    Which of the following are costs of carrying inventory?
    • A. 

      Capital costs and production control costs

    • B. 

      Capital costs and storage costs

    • C. 

      Production control costs and purchase costs

    • D. 

      Storage costs and purchasing costs

  • 7. 
    Which of the following are considered order costs?
    • A. 

      Production control costs

    • B. 

      Capital costs

    • C. 

      Risk costs

    • D. 

      Obsolescence costs

  • 8. 
    Which of the folloiwng equations is correct?
    • A. 

      Assets = Liabilities - Owners' Equity

    • B. 

      Income = Revenue - Liabilities

    • C. 

      Owners' Equity = Assets - Liabilities

    • D. 

      Revenue = Cost of Goods Sold - General and Administrative Expenses

  • 9. 
    If the annual cost of goods sold is $10 million and the average inventory is $2.5 million, what is the turns ratio?
    • A. 

      $7.5 million

    • B. 

      .25

    • C. 

      2.5

    • D. 

      4

  • 10. 
    Which of the following costs is relevant to inventory management decisions?
    • A. 

      Run costs

    • B. 

      Storage costs

    • C. 

      Marketing costs

    • D. 

      New product development costs

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