CFA Inventory & Resource Management 1

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

Physical inventory counts verify that recorded stock levels accurately reflect actual quantities on hand, helping identify and resolve discrepancies.

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

When supplies drop below the reorder point, the associate should immediately initiate a replenishment order per established procedures to prevent stockouts.

Question 3

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

Accepted Answer

ABC Analysis

Answer

ABC Analysis categorizes inventory into A (high value), B (medium value), and C (low value) groups based on annual consumption value to focus management attention appropriately.

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

FIFO (First-In, First-Out) ensures the oldest inventory is consumed first, which is critical for perishable items to minimize waste and expiration losses.

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

The correct procedure is to recount to confirm the discrepancy, then document findings and report through proper channels to maintain accountability.

CFA - Certified Field Associates Practice Test

CFA - Certified Field Associates Practice Test

CFA Inventory & Resource Management 1