Fundamentals of Inventory Mgt & Control

What is the primary objective of inventory management?

• To increase the amount of stock available
  
  

• To minimize costs while meeting customer demand

• To eliminate the need for warehouses

• To purchase as many products as possible

Which of the following is NOT a type of inventory?

• Raw materials

• Work-in-progress (WIP)

• Finished goods

• Capital investments

What does SKU stand for in inventory management?

• Stock Keeping Unit

• Storage Quantity Unit

• Sales Key Unit

• Supply Keeping Unit

Which of the following is an advantage of keeping high inventory levels?

• Reduced carrying costs

• Lower risk of obsolescence

• Increased ability to meet customer demand

• Less warehouse space required

The Just-in-Time (JIT) inventory system is designed to:

• Keep large amounts of stock on hand at all times

• Reduce inventory levels by receiving goods only as needed

• Increase lead times for production

• Store excess inventory for future demand

ABC analysis in inventory management is based on:

• The physical size of items

• The value and usage frequency of items

• The weight of inventory items

• The alphabetical listing of products

What is the main purpose of cycle counting?

• To conduct a full physical inventory count once a year

•  To continuously count small portions of inventory to improve accuracy

• To increase the overall amount of inventory

• To determine supplier reliability

Which inventory valuation method results in higher costs of goods sold when prices are rising?

• FIFO (First-In, First-Out)

• LIFO (Last-In, First-Out)

• Weighted Average Cost

• Just-in-Time

Economic Order Quantity (EOQ) is used to determine:

• The amount of inventory loss due to theft

• The optimal order quantity that minimizes costs

• The frequency of inventory audits

• The maximum inventory level a company should have

What is safety stock?

• Overstocked items that are returned to suppliers

• A reserve inventory kept to prevent stockouts

• The total amount of inventory in a warehouse
  
  

• Inventory that is damaged or obsolete