Inventory Management MCQs

Which of the following is recorded by bin card?

Which type of material is classified as ‘A’ type in ABC analysis?

Which of the following formula cannot be used to calculate re-order level?

This is the quantity of inventory which is to be ordered when inventory reaches the reorder level. If it is set so as to minimise the total costs associated with holding and ordering inventory, then it is known as the economic order quantity

The two-bin system of stores control (or visual method of control) is one whereby each stores item is kept in two storage bins

In the ABC method materials are classified A, B or C according to their expense – group A being the expensive, group B the medium-cost and group C the inexpensive materials.

Inventory control levels can be calculated in order to maintain inventories at the optimum level. The three critical control levels are:

Minimum level is a warning level to draw management attention to the fact that inventories are approaching a dangerously low level and that stockouts are possible

The overall objective of inventory control is, therefore, to maintain inventory levels so that the total of the ______________ costs is minimised.

Safety inventory is also known as