Inventory Management Quiz

Which of the following is NOT a purpose of inventory management?

• Minimizing the occurrence of unexpected out-of-stocks to decrease the impact on patient care.

• Preventing costs associated with damage and expiration of inventory.

• Decreasing total costs to the pharmacy and overall health care organization by focusing on purchasing products with the lowest cost.

• Increasing costs and thus boosting income by ordering medications from wholesalers.

Joe’s pharmacy has an inventory value of $750,000. The last quarterly report states that Joe’s pharmacy made inventory purchases of $800,500 for that quarter. What is Joe’s turnover rate?

Lydia pharmacy has an inventory value of $450,000. The last quarterly report states that Lydia’s pharmacy made inventory purchases of $700,250 for that quarter. What is Lydia’s turnover rate?

Latasha’s pharmacy has an inventory value of $650,000. The last quarterly report states that Latasha’s pharmacy made inventory purchases of $900,990 for that quarter. What is Latasha’s turnover rate?

Who has the best turnover rate?

• Joe = 4.27

• Lydia = 6.22

• Latasha = 5.54

A CVS Pharmacy has a value of $270,000 in actual inventory, and the previous week’s sales were $95,000 with the cost to the pharmacy of products sold being $65,000. What is the pharmacy’s number of days of inventory supply?

A Walgreen’s Pharmacy has a value of $350,000 in actual inventory, and the previous week’s sales were $100,000 with the cost to the pharmacy of products sold being $55,000. What is the pharmacy’s number of days of inventory supply?

A Walmart Pharmacy has a value of $270,000 in actual inventory, and the previous week’s sales were $95,000 with the cost to the pharmacy of products sold being $85,000. What is the pharmacy’s number of days of inventory supply?

Who will have the best profit margin? Consider the following inventory days: - CVS Pharmacy: 29 days - Walgreen’s Pharmacy: 45 days - Walmart Pharmacy: 22 days

Is 45 days too much supply? What happens if it is not sold? Did Walgreen’s buy too much inventory?