CHL Inventory and Supply Management 2 — Questions and Answers
Question 1: A hospital supply manager notices that a critical surgical item frequently runs out mid-month despite reorder points being set. Which corrective action is MOST appropriate?
- Increase the reorder quantity and safety stock level (Correct answer)
- Switch to a different supplier immediately
- Reduce the usage of the item in surgeries
- Implement a manual count every Friday
Correct answer: Increase the reorder quantity and safety stock level
Increasing reorder quantity and safety stock directly addresses chronic stockouts by building a buffer against demand variability.
Question 2: Under a consignment inventory agreement, when does the healthcare facility actually pay for the supplies?
- When the order is placed with the vendor
- When the goods are shipped to the facility
- When the item is used or consumed (Correct answer)
- At the end of each fiscal quarter regardless of use
Correct answer: When the item is used or consumed
Consignment agreements mean the facility only pays the vendor when an item is actually consumed or used, reducing carrying costs.
Question 3: Which inventory costing method assigns the most recent purchase prices to the cost of goods sold, potentially understating ending inventory value in a period of rising prices?
- FIFO (First-In, First-Out)
- LIFO (Last-In, First-Out) (Correct answer)
- Weighted Average Cost
- Specific Identification
Correct answer: LIFO (Last-In, First-Out)
LIFO assigns the latest (most expensive) costs to cost of goods sold, leaving older (cheaper) costs in ending inventory, understating its value when prices are rising.
Question 4: A healthcare leader wants to reduce the total cost of ownership (TCO) for medical supplies. Which factor is LEAST likely to be included in TCO analysis?
- Purchase price of the supply
- Storage and handling costs
- Staff training costs related to the supply
- The vendor's annual marketing budget (Correct answer)
Correct answer: The vendor's annual marketing budget
TCO includes all costs the facility incurs (purchase, storage, training, disposal), not internal costs of the vendor such as their marketing budget.
Question 5: What is the primary purpose of a par-level system in hospital supply management?
- To track the expiration dates of all medications
- To set the maximum and minimum quantity of a supply item to keep on hand (Correct answer)
- To authorize capital equipment purchases
- To schedule vendor delivery windows
Correct answer: To set the maximum and minimum quantity of a supply item to keep on hand
Par-level systems define the minimum quantity that triggers reorder and the maximum quantity to stock, ensuring consistent availability without overstocking.
Question 6: A supply chain disruption causes a hospital to face a shortage of single-use surgical gowns. Which interim strategy BEST balances patient safety and operational continuity?
- Cancel elective surgeries until stock is replenished
- Identify and qualify an alternative approved supplier immediately (Correct answer)
- Reuse gowns after sterilization as a temporary measure
- Transfer all surgical cases to a partner facility
Correct answer: Identify and qualify an alternative approved supplier immediately
Qualifying an alternative approved supplier maintains patient safety standards while restoring supply, making it the best balanced interim strategy.
Question 7: In the context of healthcare supply management, what does 'demand forecasting' primarily help a manager accomplish?
- Determine the number of staff needed in the OR
- Predict future supply needs based on historical usage patterns (Correct answer)
- Set pricing agreements with group purchasing organizations
- Evaluate supplier financial stability
Correct answer: Predict future supply needs based on historical usage patterns
Demand forecasting uses historical consumption data and trends to predict future supply needs, reducing stockouts and overstock situations.
CHL Inventory and Supply Management 2
A hospital supply manager notices that a critical surgical item frequently runs out mid-month despite reorder points being set.
Which corrective action is MOST appropriate?