Business Quiz: Inventory Management
- 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
Questions: 8 | Attempts: 1252 | Last updated: Mar 22, 2022
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