CFSP Purchasing and Inventory 3

Question 1

Which inventory valuation method assumes the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

LIFO (Last In, First Out) assumes the newest inventory is used first, which affects reported cost of goods sold.

Question 2

An operation's average inventory is $12,000 and annual COGS is $144,000. What is the inventory turnover rate?

Accepted Answer

12 times per year

Answer

Inventory turnover = COGS ÷ Average inventory = $144,000 ÷ $12,000 = 12 times per year.

Question 3

Which of the following is a key advantage of using a group purchasing organization (GPO)?

Accepted Answer

Lower prices through combined buying volume

Answer

GPOs leverage the collective purchasing power of many members to negotiate lower prices from suppliers.

Question 4

Fresh whole chickens delivered to a foodservice operation should be received at or below which internal temperature?

Accepted Answer

40°F (4°C)

Answer

Poultry must be received at 40°F (4°C) or below per FDA Food Code requirements to prevent pathogen growth.

Question 5

What does 'economic order quantity' (EOQ) help a foodservice manager determine?

Accepted Answer

The optimal order size that minimizes total ordering and holding costs

Answer

EOQ calculates the order size that balances ordering costs against inventory carrying costs to minimize total expense.

(CFSP) Certified Foodservice Professional Practice Test