Module 2 Flashcards
Physical count of properties located within a unit command. This involves actual count of stocks and the comparison of the results with the recorded balances.
INVENTORY
TRUE or FALSE
Inventory involves the following:
a. physical count of materials on hand
b. verification of stock record balances
c. investigation and disclosure
d. adjustment of stocks and financial records
e. analysis of cause of inventory discrepancies
TRUE
Physical counting of assets in the storage.
INVENTORY
Everything that has value.
ASSETS
Refers to the place where supplies are kept on storage.
LOCATION
Provides specific/exact location of an item place on storage.
LOCATION NUMBER
Given name or description of an item.
NOMENCLATURE
13-digit numbers which is unique to the item which it identifies and thus identifies it from every other items.
NATIONAL STOCK NUMBER (NSN)
Series of letters of numbers used as an identifying code for an item.
PART NUMBER
Refers to the actual number of item on stock.
QUANTITY
Specified measurement as data which serve as the controlling parameter in the provisioning of supplies.
Example:
EA - each
HD - hundred
CN - cartons
BX - boxes
UNIT OF ISSUE (U/I)
Used to identify serviceable items.
YELLOW TAG
Used to identify reparable items.
GREEN TAG
Used to identify condemned/disposable items.
RED TAG
TRUE or FALSE
Reasons for Inventory:
- Demand forecast error
- Unpredictable or late deliveries from suppliers
- Strategic stocking
- Minimum supplier order quantity
- Supplier delivery interval
- Stocking methodology
- Reorder interval and quantity
- Purchase price advantage
- Lead-times offered to customers are shorter than supplier lead-times
- Minimization of delivery costs
- Pipeline Inventory
- Anticipation or precautionary stocks
- Meeting changing demand with flat capacity
TRUE
An inventory consist of two (2) basic elements
- the actual property in stock; and
- the records indicating the quantity of each item.
The purpose of inventory is to correct ________ in processing and storage operations. This permits item and record balances to agree with actual quantities of stock in hand or in use.
ERRORS
________ give management a measurement of accuracy of accountable records, warehouse location and stocks identification.
INVENTORIES
________ may be defined as “an itemized list or count of all or any designated property on hand at a given time; the property comprising an ________.”
INVENTORY
________ should be taken of all assets, both in storage and out of warehouse regardless of physical location.
INVENTORY
TRUE or FALSE
Warehouse personnel or special inventory personnel may be utilized as inventory counters at the discretion of the Supply Officer.
TRUE
6 Functions of Integrated Inventory Management
- Cataloging
- Requirements Planning
- Procurement Direction
- Distribution Management
- Maintenance Management
- Materiel Utilization and Disposal
[Functions of Integrated Inventory Management]
The inventory manager must insure that the items are properly cataloged and recorded in appropriate working file sections of the Master Data File so that the customer units will know what the item is, what the item does, what stock number to use, what the unit cost is, and where to submit his request for the item.
CATALOGING
[Functions of Integrated Inventory Management]
The inventory manager is responsible for the planning and computing of peace and mobilization requirements for assigned items. He is also responsible for computing military requirements based on history of demand and maintaining stockage levels.
REQUIREMENTS PLANNING
[Functions of Integrated Inventory Management]
The inventory manager has the authority to direct procurement to be accomplished, subject to limitations of approved programs and direction from higher authority. Close coordination between the inventory manager and procurement personnel is essential.
PROCUREMENT DIRECTION
[Functions of Integrated Inventory Management]
The inventory controls stocks, which are storage due in or due out for the entire depot distribution system on both quantitative and monetary basis with the exception of selected items. This ________ function involves the control of inventories to insure that they are adequate, but not excessive, and that they are strategically located so as to be responsive to customer demands.
DISTRIBUTION MANAGEMENT
[Functions of Integrated Inventory Management]
The inventory manager has the authority to require that items be overhauled or rebuilt in computing requirement. All assets, serviceable, economically reparable and unserviceable, must be considered. The users must be brought into the planning process to insure the timely return of unserviceable assets.
MAINTENANCE MANAGEMENT
[Functions of Integrated Inventory Management]
The inventory manager must insure that excess or obsolete stocks are removed from the system. He is responsible for the declaration of excess items and when the item has been declared excess to the government, takes further action to effect disposal. He must conscientiously participate in the materiel utilization program to ensure proper utilization of excess stocks prior to disposal.
MATERIEL UTILIZATION AND DISPOSAL
Inventory Management (IM) Requirements
- A ________ to keep track of the inventory on hand and on order.
- A reliable forecast of ________.
- Knowledge of ________ and its variability.
- Reasonable ________ of inventory holding costs, ordering costs, and shortage costs.
- A classification ________ for inventory items.
- system
- demand
- lead times
- estimates
- system
________ procedures provide positive control of the flow of materials and documentation. This control include issuance directive, receipts, adjustments and catalog data changes.
Physical inventory
TRUE or FALSE
Mutually agreeable cutoff dates must be established between storage and accountable activities for inventory actions.
TRUE
TRUE or FALSE
Indicate “Do Not Inventory” on items not included in inventory count.
TRUE
________ of property is an important function in taking an inventory to achieve optimum effectiveness of available supplies and to maintain protection against uncertainty.
Counting
TRUE or FALSE
The purpose of location surveys, inventory and adjustment is to
A. Determine the location and condition of material
B. Determine the quantity of material on hand
C. Adjust stock record to show actual quantities
D. Determine the cause for discrepancies when they are found
E. Correct the cause of discrepancies
TRUE
Materials which requires protection in the interest of national security.
CLASSIFIED ITEM
Materials which requires high degree protection and control, e.g., narcotics, precious metals, etc.
SENSITIVE ITEMS
Materials having a ready resale value highly and technical or hazardous in nature.
PILFERABLE ITEMS
An inventory system where counts are performed continuously, often eliminating the needs for an annual overall inventory.
CYCLE INVENTORY
“to gain better control over the inventory”
GOAL
An inventory accuracy audit technique where inventory is counted on a cyclic schedule rather than once a year.
CYCLE COUNTING
“ to identify items in error, thus triggering research, identification, and elimination of the cause of errors. ”
PURPOSE
What are the causes of cycle count discrepancies?
- Wrong quantity taken to fill an order
- Wrong product taken to fill an order
- Products filled from the wrong stocking location
- Stock put away in the wrong bin location
- Units of measure confused or misrepresented
- Data entry errors
- Damaged material mixed with good stock
- Material movement not properly recorded
conducted using the close warehouse method. All items within the selected parameter are inventoried. The warehouse area being inventoried is closed except for emergency issues. All backlog transactions are processed immediately upon completion of an inventory.
COMPLETE INVENTORY
developed to provide better use of manpower and time. This method serves the same purpose as a complete inventory, however, only a random sample of items need to be counted. If the inventory fails the acceptable error rate, a complete inventory is conducted.
SAMPLE INVENTORY
conducted by line item on an as-required basis. Main reason is to correct out-of-balance condition resulting in warehouse refusal.
SPECIAL INVENTORY
usually performed only upon written request. Conducted discrepancies that cannot be resolved by property custodian.
In-Use/In-Place Equipment Inventory
6 INVENTORY ACTIONS RELATED TO PHYSICAL COUNT OF MATERIAL
- Principles of Inventory Control
- Inventory Planning
- Inventory Training
- Preparation of Material for Inventory
- Inventory and Adjustment
- Controlled Item Inventory
4 TYPES OF INVENTORY
- Complete Inventory
- Sample Inventory
- Special Inventory
- In-Use/In-Place Equipment Inventory
2 METHODS OF INVENTORY
- CLOSED WAREHOUSE METHOD
2. OPEN WAREHOUSE METHOD
is a method whereby the warehouse, or sections thereof, housing the property to be inventoried is closed to all receipt and issue transactions, except emergency issue transactions, while the physical count is being made.
CLOSED WAREHOUSE METHOD
is a method whereby normal receipts and issue transactions continue during the course of inventory.
OPEN WAREHOUSE METHOD
4 FREQUENCY OF INVENTORY (By Schedule)
- Quarterly Inventory
- Semi-Annually Inventory
- Annual Inventory
- As-Required Inventory
covers out-of-warehouse investment assets, in-warehouse investment assets.
Quarterly Inventory
conducted for classified and sensitive items.
Semi-Annually Inventory
conducted for nuclear ordnance, commodity management equipment and pilferage type items
Annual Inventory
inventory of all items added to the critical item management.
As-Required Inventory
The key to any successful inventory is in the proper ________ by all section and persons concerned.
preparation
establish by fiscal year to ensure that all assigned locations and details are inventoried at the correct frequency.
SCHEDULE
is the day immediately before the inventory count begins. The opening record balance on which the ________ is the balance on which the inventory count is compared.
Inventory Deadline Date
conducted before the inventory deadline date to identify and correct discrepancies that would affect the inventory.
Pre-Inventory Survey
Process all transactions at least ________ day prior to the inventory deadline date.
one (1)
3 PROBLEMS IN INVENTORY
- OVERAGES
- SHORTAGES
- REFUSAL
Occur when more assets are found in the warehouse than what is reflected on the accountable cards.
OVERAGES
occur when fewer assets are found in the warehouse than are reflected on the accountable cards.
SHORTAGES
occur when no asset could be found in a given location but accountable records reflects on stock.
REFUSAL
2 PURPOSES OF INVENTORY
- CORRECT ERRORS
2. VALIDATE THE ACCOUNT
[PURPOSE OF INVENTORY]
Improve the usefulness of property accounting records which is a function of accurate balances.
CORRECT ERRORS
[PURPOSE OF INVENTORY]
Establish credibility of the stock record account to public law and recognized good business practices.
VALIDATE THE ACCOUNT
The performance of physical functions covering receipt, storage, and issue of supplies.
Warehousing
The process or act of positioning and placing items (cartons, packages, pallet unit loads, etc.) in area set aside for holding these items or staging these items for shipment.
Warehousing
is the holding and keeping of supplies for future use, ready for issue at any given time.
Storage
includes preparing and planning for supplies that will arrive at the location in the future, the processing and handling of supplies to the customer.
Storage
4 Objectives of Storage and Warehousing
- Full utilization of space
- Savings on time and labor
- Supply readiness and accessibility
- Maximum protection
[OBJECTIVES OF STORAGE AND WAREHOUSING]
every available foot of storage space should be put to use vertically and horizontally.
Full utilization of space
[OBJECTIVES OF STORAGE AND WAREHOUSING]
unexpected volume of shipments can be handled by a lean team of warehouse personnel at less operational time when supplies are stored properly and efficiently.
Savings on time and labor
[OBJECTIVES OF STORAGE AND WAREHOUSING]
supplies are stored in an efficient and proper manner for ease in selection and shipment with minimum amount of effort and cost involved. Each SKU location properly accessible.
Supply readiness and accessibility