Inventory Management Learning Block 2 Practice Questions

Question 1

ABC analysis considers which element or elements to determine which items are most important and require the most attention?

Answer 1

Value, velocity, or volume

Question 2

Pareto’s principle can also be referred to as which rule?

Answer 2

80/20

Question 3

Which items have the highest percentage of value, velocity, and volume?

Answer 3

A items

Question 4

Which of the following criteria is used to describe an item that is low in sales but is important to a customer?

Answer 4

Criticality

Question 5

Which corporate department would most likely never want a stockout condition in order to achieve a service level of 100%?

Answer 5

Sales

Question 6

There are times of the year when a given company would hold more inventory than at other times of the year. This is referred to as:

Answer 6

Seasonality

Question 7

In an ideal world, a company’s inventory replenishment philosophy would be:

Answer 7

Sell one and then make one

Question 8

Which of the following best describes velocity in terms of inventory analysis?

Answer 8

How fast an item sells or moves

Question 9

Which metric best describes the number of times that inventory cycles over a one-year period?

Answer 9

Inventory turns

Question 10

When determining the quantity of items for a new or replenishment order, the calculated difference between the Min and Max values refers to what term?

Answer 10

Economic order quantity