Inventory Management Quiz Questions

21 Questions | By Millerthomas2008 | Updated: May 1, 2022 | Attempts: 5791

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Inventory Management Quiz Questions - Quiz

Do you know about inventory management? We have designed this quiz to test your knowledge regarding the basics of inventory management and its related concepts. If you think you have a good understanding of this subject, then you must try this quiz. If your final score is less than 70%, then it means that your knowledge game is not that strong in this subject. So, let's start the quiz and see if you need to work hard on your skills or not.

Questions and Answers

1.

Materials management is defined as the
- A.
  
  Management and control of inventory
- B.
  
  management and control of services, inventory, and equipment
- C.
  
  control of materials purchased
- D.
  
  control of the amount of materials used for patient care
2.

Materials management can be classified in which two ways?
- A.
  
  Equipment and materials
- B.
  
  Ministration and clinical
- C.
  
  Administration and patient care
- D.
  
  Patient care and office materials
3.

Inventory management is the
- A.
  
  Management and control of services, inventory, and equipment
- B.
  
  management and control of inventory
- C.
  
  control of supplies coming into the organization and supplies used
- D.
  
  Control of materials purchased
4.

Why do managers sometimes have a hard time determining the right amount of supplies to have on hand?
- A.
  
  The demand for supplies can fluctuate on the basis of patient volume.
- B.
  
  Supplies may miss their delivery or be discontinued.
- C.
  
  There is often a lag time between ordering and receiving the supply.
- D.
  
  All of the above
5.

Where do costs related to inventory appear on an organization’s financial statements?
- A.
  
  Current asset on the balance sheet
- B.
  
  Expenses on the statement of revenues and expenses
- C.
  
  Both of the above
- D.
  
  None of the above
6.

Which of the following are methods for valuing inventory?
- A.
  
  FIFO, LIFO, specific identification, weighted average
- B.
  
  LIFO, FIFO, weighted average, frequent use
- C.
  
  FO, LIFO, specific identification, frequent use
- D.
  
  Specific identification, LIFO, FIFO, market method
7.

When using the LIFO method of valuing inventory
- A.
  
  the last item put into inventory is the last item taken out
- B.
  
  the last item put into inventory is the first item taken out
- C.
  
  the last items taken out of inventory are items with no expiration date
- D.
  
  Materials with a long shelf life are valued
8.

When using the FIFO method of valuing inventory
- A.
  
  The first item taken out of inventory is the last item taken out
- B.
  
  the first items taken out of inventory have a short shelf life
- C.
  
  The first item put into inventory is the first item taken out
- D.
  
  Materials with a short shelf life are valued
9.

Carrying costs
- A.
  
  are the costs associated with holding an inventory of items
- B.
  
  include a holding cost
- C.
  
  are the costs associated with having vendors hold supplies for organizations
- D.
  
  (a) and (b)
10.

What are costs associated with having more than enough inventory in stock called?
- A.
  
  Stock-out costs
- B.
  
  Holding costs
- C.
  
  Overstock costs
- D.
  
  Carrying costs
11.

What are costs associated with having too little inventory in stock called?
- A.
  
  Stock-out costs
- B.
  
  Opportunity costs
- C.
  
  Overstock costs
- D.
  
  Carrying costs
12.

Economic order quantity establishes
- A.
  
  The maximum number of items an organization would want to purchase at one time
- B.
  
  the quantity of items an organization should order each time to minimize costs associated with ordering
- C.
  
  the number of items an organization can order in bulk to receive a discount
- D.
  
  the quantity of items an organization would have to order each time to maximize costs associated with ordering
13.

The inventory turnover ratio measures
- A.
  
  how quickly an organization goes through routine supplies
- B.
  
  Inventory expenses in relation to operating revenue
- C.
  
  costs incurred from ordering supplies in relation to total inventory expense
- D.
  
  The number of times inventory is turned in relation to operating revenue
14.

Using the Economic Order Quantity formula and the Total Cost formula and given the following data, what is the EOQ? Price = $100 Demand = 1,000 Ordering cost = $10 Interest = 5% Holding cost = $.50 Lag time = 5 days
- A.
  
  48 units
- B.
  
  58 units
- C.
  
  68 units
- D.
  
  78 units
15.

Using the data provided above, what is the Total Cost?
- A.
  
  $100,346
- B.
  
  90,028
- C.
  
  108,028
- D.
  
  $118,028
16.

Using the data provided above and given a constant demand, how many orders are placed each year?
- A.
  
  15
- B.
  
  17
- C.
  
  19
- D.
  
  21
17.

Using the data provided above and given a constant demand and a lag time of 5 days, how many units remain on the shelf when an order is placed?
- A.
  
  10
- B.
  
  12
- C.
  
  14
- D.
  
  16
18.

Using the data provided above and given a constant demand, how many weeks go by between orders?
- A.
  
  One
- B.
  
  Two
- C.
  
  three
- D.
  
  Four
19.

Time as a consideration is unimportant in inventory management.
- A.
  
  True
- B.
  
  False
20.

Just-in-time inventory is a method of holding inventory in the organization so that it can be accessed immediately prior to use.
- A.
  
  True
- B.
  
  False
21.

I worked the following Practice Problems
- A.
  
  Inventory valuation, pgs 252-253
- B.
  
  Economic order quantity, pgs. 255-256.
- C.
  
  neither a or b
- D.
  
  A and B