The Art of Inventory Management | SCT

Which of the following best describes the EOQ (Economic Order Quantity)?

• The amount of inventory to maintain as safety stock

• The number of units to be produced per cycle

• The ideal order quantity that minimizes total ordering and holding costs

• The total amount of inventory carried annually

In the ABC classification system, "A" items are typically:

• Low-value, high-volume items

• High-value, low-volume items

• Items with the highest stock quantity

• Items with irregular demand patterns

Which of the following is a key benefit of using cycle counting?

• Requires full shutdown of warehouse

• Identifies discrepancies without halting operations

• Eliminates the need for physical inventory entirely

• Ensures all items are counted every day

Reorder Point (ROP) is calculated using which two key variables?

• Safety stock and EOQ

• Lead time and average daily demand

• Holding cost and demand variability

• Inventory turnover and order cost

Which inventory control method is most appropriate for perishable items?

• LIFO

• JIT

• FEFO

• Min-Max

What does a high inventory turnover ratio generally indicate?

• Stockouts are frequent

• Inventory is obsolete

• Inventory is being sold or used efficiently

• Excess safety stock is maintained

Which technology allows inventory to be scanned without line-of-sight?

• Barcode

• RFID

• QR Code

• Manual tagging

Fill rate measures:

• Stock level compared to maximum capacity

• Percentage of customer orders fulfilled on the first attempt

• Number of replenishment cycles completed

• Inventory lost due to shrinkage

In inventory management, shrinkage refers to:

• Seasonal demand reduction

• Increase in safety stock

• Loss due to theft, damage, or error

• Storage cost reductions

Which of the following best supports real-time inventory visibility?

• Periodic stock review

• Manual inventory log sheets

• Physical inventory count

• Integrated WMS and scanning tools