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Business English Exercises
 

Inventory Management

Answers to test questions and links to explanations

Home > Teaching Business English > Business English Lessons, Advanced Level # 376
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inventory management answer 1
The modern era of inventory management began in 1913 with the publication of a paper by a Westinghouse engineer, Ford W. Harris, on inventory optimization; over the succeeding decades, dozens of new and more elaborate inventory optimization techniques were invented.

Correct answer: (a) elaborate

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inventory management answer 2
"But suddenly the music stopped," exclaims George Brown of Ewe Lamb Technologies: in the early 1980s, Japanese corporations began hollowing out industry after industry in the United States and Europe.

Correct answer: (b) hollowing

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inventory management answer 3
From analyses of their successes, one factor was obvious — Japan employed far less inventory in proportion to sales than was considered 'optimal' — and minimization subsequently superseded optimization as the guiding philosophy of inventory management.

Correct answer: (a) employed

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inventory management answer 4
Minimization dogma says that inventory is the corporate equivalent of 'fat' and should therefore be eliminated; treasury, for its part, was more than happy to endorse this fashionably anorexic philosophy.

Correct answer: (b) anorexic

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inventory management answer 5
After all, through the magic of the liquid asset cycle, reductions in inventory wonderfully reappear as cash in treasury's coffer.

Correct answer: (a) coffer

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inventory management answer 6
Minimization's siren song was that 'a corporation can never be too rich or too lean'.

Correct answer: (b) siren

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inventory management answer 7
A second explanation for the minority's inventory-contentment is almost certainly the misuse of 'nave' ratios (a ratio is said to be nave when it is completely divorced from true corporate objectives and performance).

Correct answer: (d) divorced

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inventory management answer 8
Most common naive ratios are 'inventory-to-sales' and its reciprocal, 'turns', which can provide a comforting but false sense of accomplishment as their numbers 'improve'; the inherent canard of both is the assumption that less inventory is always better than more.

Correct answer: (a) canard

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inventory management answer 9
This simply is not true: anyone who experienced the barren shelves of Moscow's Soviet-era department stores, or is told by a barista that there are no more coffee-lids, will attest to the obvious fact that inventory shortages are a major source of customer dissatisfaction, lost sales, and lost profit.

Correct answer: (a) barista

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inventory management answer 10
The two major failed philosophical opposites, minimization and optimization, happen to nail down the extreme ends of a broad 'feasibility range' for inventory, and by slicing the middle ground into a series of progressive investment options, we can calculate the expected returns, maturities, and risks for each increment.

Correct answer: (d) ground

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