Pharmacy Management and Inventory Control

Question 1

Average cost of inventory on hand

Answer 1

Determined by adding the year’s beginning inventory to the year’s ending inventory and dividing by two.

Question 2

DEA form

Answer 2

An official federal government DEA changed to non-carbon-copy form in 2020. Form from the Drug Enforcement Administration used for ordering controlled substances.

Question 3

Delayed billing

Answer 3

A benefit that some companies offer to the buyer who is purchasing increased amounts of merchandise. The date the statement must be paid is usually longer than 30-60 days away.

Question 4

FIFO

Answer 4

Acronym for “first in, first out.”

Question 5

FOB

Answer 5

Acronym for “free on board.”

Question 6

FOB destination

Answer 6

Title of possession passes from the pharmaceutic company to the buyer (i.e.: the purchaser) when the shipment is delivered to the buyer’s business destination (i.e.: the veterinary facility).

Question 7

FOB shipping point

Answer 7

Title passes from the pharmaceutic company to the purchaser when the vendor places the goods in the possession of a carrier (e.g.: United Parcel Service, Federal Express, Averitt Express).

Question 8

Full-service companies

Answer 8

A pharmaceutic company that offers full service (e.g.: the company employs sales representatives [reps] who visits veterinary facilities), usually with a limited number of products.

Question 9

Inventory

Answer 9

The quantity of goods or assets that a veterinary facility possesses, requiring proactive control to keep supplies stable and current.

Question 10

Inventory control manager (ICM)

Answer 10

A person (many times a licensed veterinary medical technician [LVMT]) responsible for monitoring, ordering, and maintaining inventory in a veterinary facility.

Question 11

Invoice

Answer 11

A form generated by a company that documents the quantity and price of each item ordered by the inventory control manager.

Question 12

Mail order discount house

Answer 12

A company that accepts orders from the buyer by telephone; a good source for ordering items such as gauze, cotton, isopropyl alcohol, or paper towels.

Question 13

Margin

Answer 13

The actual profit a practice makes on each sale.

Question 14

Markup

Answer 14

The amount of money over cost for which a product sells. Markup percentages vary from practice to practice, but all markups reflect a retail value over wholesale value.

Question 15

Packing slip

Answer 15

A document supplied by the vendor that accompanies a purchase. A packing slip generally reflects quantities ordered, not prices.

Question 16

Statement

Answer 16

A document generated by the vendor that details the quantity and pricing of all goods purchased (usually in 1 month) by the buyer. The total balance is generally expected to be paid in full within 30 days.

Question 17

Total cost

Answer 17

A measure that includes the cost of an item plus tax.

Question 18

Turnover

Answer 18

the number of times a product is sold or used up in a veterinary facility. The minimum turnover rate should be established at four times a year.

Question 19

Veterinary supply distributor

Answer 19

An intermediate company (i.e.: not full service, not mail order) that generally stocks a large inventory and employs sales representatives who visit veterinary facilities.