CDM Purchasing and Inventory Control 2

Question 1

Which purchasing method involves soliciting competitive bids from multiple vendors for large-quantity orders?

Accepted Answer

Competitive bid purchasing

Answer

Open market buying

Answer

Prime vendor agreement

Answer

Cost-plus purchasing

Question 2

What does the term 'par level' refer to in inventory management?

Accepted Answer

The minimum quantity of an item that should be in stock at all times

Answer

The maximum shelf life of a product

Answer

The ideal storage temperature

Answer

The number of vendors for each product

Question 3

Which document specifies the exact quality standards, grade, size, and other requirements for products to be purchased?

Accepted Answer

Product specification

Answer

Purchase order

Answer

Invoice

Answer

Receiving report

Question 4

What is the primary purpose of conducting regular physical inventory counts?

Accepted Answer

To verify that actual stock levels match recorded inventory records

Answer

To reorganize storage areas

Answer

To train new receiving staff

Answer

To identify expired products only

Question 5

Which receiving practice is essential for ensuring food safety of delivered products?

Accepted Answer

Checking temperatures of refrigerated and frozen items upon delivery

Answer

Accepting all deliveries without inspection to save time

Answer

Storing items before counting

Answer

Relying on the driver's temperature logs only

Question 6

What is the economic order quantity (EOQ) concept in purchasing?

Accepted Answer

The order quantity that minimizes total inventory costs (ordering plus holding)

Answer

Buying the maximum quantity available at the lowest price

Answer

The amount ordered when inventory reaches zero

Answer

The quantity specified in the prime vendor contract