Inventory Management Quiz

What is the primary objective of inventory management?

• To maximize inventory investment

• To increase production speed

• To eliminate all inventory costs

• To achieve a balance between inventory investment and customer service

Which type of inventory consists of materials that have not yet undergone processing?

• Finished goods

• Work-in-process (WIP)

• Raw material

• Maintenance/repair/operating (MRO)

What does ABC analysis categorize items based on?

• Quality control measures

• Annual dollar volume

• Production cycle time

• Supplier reliability

Which class in ABC analysis represents items with high annual dollar volume?

• Class A

• Class C

• Class B

• Class D

What is the purpose of cycle counting?

• To conduct a full inventory count annually

• To update records on a periodic basis

• To increase production capacity

• To eliminate all inventory items

What is the main focus of sales and operations planning (S&OP)?

• To coordinate demand forecasts with functional areas

• To reduce production costs

• To eliminate supply chain issues

• To increase inventory levels

What does aggregate planning aim to achieve?

• Increase inventory levels

• Reduce workforce size

• Meet forecast demand while minimizing cost

• Maximize production output

Which type of inventory includes completed products ready for shipment?

• Raw material

• Work-in-process (WIP)

• Finished goods

• Maintenance/repair/operating (MRO)

What is a key benefit of maintaining accurate inventory records?

• Elimination of all inventory

• Reduction in supplier costs

• Precise decisions about ordering and scheduling

• Increased production speed

What is the purpose of disaggregation in aggregate planning?

• To increase production capacity

• To eliminate unnecessary inventory

• To break the plan down into greater detail

• To simplify the planning process