Inventory Management Learning Block 6 Practice Questions Flashcards
Inventory Performance Measurement and Financial Implications: Learning Block 6 Practice Questions
The definition of a hurdle rate is:
The minimum rate of return on any new investment
On a company balance sheet, inventory is which of the following?
An asset
Transshipment costs are a part of which component of inventory carrying costs?
Inventory risk costs
The metric total dollars of on-hand inventory provides an indication of:
Investment that a company has tied up in inventory
Which is the least desirable outcome for a return?
Throwing away
Inventory carrying costs should be applied to:
Raw materials, WIP, and finished goods inventory
Which of the following categories of inventory has the lowest inventory carrying cost?
Raw materials
Days on hand refers to the amount of inventory that, if a company reaches zero days on hand, the company will:
Run out of product
Taxes and insurance are a part of which inventory carrying cost component?
Inventory service cost
An example of shrinkage in inventory risk cost is:
Stolen product or evaporated liquid product