Inventory Management Quiz Questions

21 Questions

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Management Quizzes & Trivia

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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. 
    • 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. 
    • 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. 
    • 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. 
    • A. 

      Stock-out costs    

    • B. 

      Holding costs    

    • C. 

      Overstock costs    

    • D. 

      Carrying costs

  • 11. 
    • 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