CLA Inventory Control 2

Question 1

What does the term 'safety stock' refer to in inventory management?

Accepted Answer

Buffer inventory kept to guard against stockouts from demand or supply variability

Answer

Safety stock is extra inventory maintained to prevent stockouts caused by unpredictable demand fluctuations or supply delays.

Question 2

Which inventory counting method records every transaction as it occurs to maintain a continuous, up-to-date inventory balance?

Accepted Answer

Perpetual inventory system

Answer

A perpetual inventory system updates inventory records in real time with every receipt, sale, or transfer.

Question 3

A warehouse notices that 10% of its SKUs account for 70% of its total inventory value. Which inventory classification does this represent?

Accepted Answer

Class A items

Answer

In ABC analysis, Class A items represent the small percentage of SKUs that make up the largest portion of inventory value.

Question 4

What is the primary purpose of conducting a cycle count?

Accepted Answer

To verify inventory accuracy for a subset of items on a rotating basis without halting operations

Answer

Cycle counting allows ongoing accuracy verification of inventory sections without requiring a full operational shutdown.

Question 5

Which term describes inventory that is no longer sellable or usable due to product obsolescence or expiration?

Accepted Answer

Dead stock

Answer

Dead stock refers to inventory that cannot be sold or used, often because it has expired, become obsolete, or has no demand.

(CLA) Certified Logistics Associate Practice Test