Logistics Management review 1

What is inventory?

• Stock of items to meet future demand
• Stock of items used in past production
• Stock of items sold to customers
• Stock of obsolete items

Which of the following is NOT a type of inventory?

• Raw materials
• Purchased parts
• Speculative stock
• Expired goods

What is the main purpose of carrying inventory?

• To reduce production costs
• To avoid stockouts
• To increase market share
• To reduce lead times

Which of the following is a carrying cost?

• Cost of placing an order
• Cost of transporting goods
• Cost of storage and handling
• Cost of hiring staff

What does EOQ stand for?

• Economic Ordering Quantity
• Essential Ordering Quotient
• Efficient Order Quantity
• Equal Order Quality

Which of the following is NOT part of inventory turnover calculation?

• Cost of goods sold
• Average inventory
• Selling price of goods
• Days of inventory on hand

In ABC analysis, which category includes the items with the highest value?

• A
• B
• C
• D

What is the reorder point (ROP) formula?

• ROP = (DD x RC) + SS
• ROP = (DD + RC) x SS
• ROP = (SS - DD) x RC
• ROP = DD x SS + RC

Which of the following is considered as speculative stock?

• Raw materials
• Goods bought to meet future price increases
• Finished goods
• Work-in-process

What does safety stock represent?

• Extra stock held to prevent stockouts
• Stock held in case of emergencies
• Stock ordered for seasonal demand
• Stock held during production