CFA Inventory & Resource Management

Question 1

What is the primary purpose of conducting a physical inventory count in field operations?

Accepted Answer

To verify that recorded stock levels match actual on-hand quantities

Answer

To determine the market value of all assets

Answer

To identify employees who are misusing resources

Answer

To calculate the depreciation of field equipment

Question 2

When a field associate notices that supply levels have dropped below the reorder point, what should be the immediate next step?

Accepted Answer

Initiate a replenishment order according to established procurement procedures

Answer

Wait until the end of the month to order all supplies at once

Answer

Borrow supplies from a neighboring territory

Answer

Continue operations and note the shortage in the final report

Question 3

Which inventory management technique categorizes items by their annual consumption value to prioritize management efforts?

Accepted Answer

ABC Analysis

Answer

FIFO (First-In, First-Out)

Answer

Just-In-Time (JIT)

Answer

Economic Order Quantity (EOQ)

Question 4

What does FIFO stand for, and how does it apply to managing perishable field supplies?

Accepted Answer

First-In, First-Out — oldest stock is used or distributed before newer stock

Answer

First-In, First-Out — newest stock is always used first to maintain freshness

Answer

Fixed Inventory, Fixed Output — stock levels remain constant

Answer

Field Inventory, Field Operations — all field assets are tracked together

Question 5

A field associate discovers a discrepancy between the inventory log and actual stock. What is the BEST first action?

Accepted Answer

Conduct a recount to confirm the discrepancy, then document and report it

Answer

Adjust the log to match actual stock without documentation

Answer

Ignore the discrepancy if it is less than 5% variance

Answer

Immediately suspend all operations until the issue is resolved

Question 6

What is the purpose of an asset tag on field equipment?

Accepted Answer

To uniquely identify and track each piece of equipment in the organization's asset register

Answer

To indicate the replacement cost of the equipment

Answer

To show which employee is personally liable for the equipment

Answer

To indicate the date when the equipment must be retired

Question 7

Which of the following best describes a 'stockout' in the context of field resource management?

Accepted Answer

A situation where required supplies or materials are unavailable when needed

Answer

Excess inventory that exceeds storage capacity

Answer

The process of removing outdated stock from inventory

Answer

A scheduled reduction in inventory levels for audit purposes