COP Inventory Control & Fulfillment Procedures 2 — Questions and Answers
Question 1: A warehouse uses a two-bin replenishment system. What triggers a replenishment order?
- When both bins are empty
- When the first bin is emptied and picking begins from the second bin (Correct answer)
- When stock falls below the reorder point in the main bin
- When the second bin reaches 50% capacity
Correct answer: When the first bin is emptied and picking begins from the second bin
In a two-bin system, emptying the first bin triggers a replenishment order while the second bin continues to supply demand.
Question 2: Which inventory valuation method assigns the cost of the most recently purchased items to the cost of goods sold?
- FIFO
- Weighted Average
- LIFO (Correct answer)
- Specific Identification
Correct answer: LIFO
LIFO (Last-In, First-Out) assumes the most recently acquired inventory is sold first, assigning newer costs to COGS.
Question 3: A 3PL fulfillment center receives a chargeback from a retailer for non-compliance. Which document should be reviewed first to determine the cause?
- The carrier's bill of lading
- The retailer's vendor compliance guide (routing guide) (Correct answer)
- The purchase order acknowledgment
- The warehouse receiving log
Correct answer: The retailer's vendor compliance guide (routing guide)
The retailer's vendor compliance/routing guide specifies all packaging, labeling, and shipping requirements whose violation triggers chargebacks.
Question 4: When performing a cycle count, an order processor finds 48 units on hand but the system shows 52. What is the correct next step?
- Immediately adjust the system to 48 and recount next quarter
- Recount the location, then investigate the discrepancy before adjusting (Correct answer)
- Order 4 units to reconcile the difference
- Flag the item for disposal and zero out inventory
Correct answer: Recount the location, then investigate the discrepancy before adjusting
Best practice requires a recount to confirm the physical quantity and then investigate potential causes (theft, misshipment, recording error) before making a system adjustment.
Question 5: Which picking method is most efficient when a single order contains items stored across many zones of a large warehouse?
- Discrete (single-order) picking
- Batch picking
- Zone picking with order consolidation (Correct answer)
- Cluster picking
Correct answer: Zone picking with order consolidation
Zone picking divides the warehouse into zones where pickers work only their zone; completed picks are consolidated into single orders, minimizing travel while handling multi-zone orders.
Question 6: An order is placed for 200 units but only 150 are in stock. If the company policy is to ship available stock and backorder the remainder, what document is issued for the missing 50 units?
- Credit memo
- Return merchandise authorization (RMA)
- Backorder notice or partial shipment confirmation (Correct answer)
- Debit memo
Correct answer: Backorder notice or partial shipment confirmation
A backorder notice (or partial shipment confirmation) communicates to the customer that the remaining 50 units will ship when stock is replenished.
Question 7: Safety stock is primarily maintained to protect against which two variables?
- Supplier lead time variability and demand variability (Correct answer)
- Warehouse capacity limits and order processing delays
- Carrier rate fluctuations and customs delays
- Return rates and warranty claims
Correct answer: Supplier lead time variability and demand variability
Safety stock buffers against unpredictable changes in supplier lead times and fluctuations in customer demand to prevent stockouts.
COP Inventory Control & Fulfillment Procedures 2
A warehouse uses a two-bin replenishment system.
What triggers a replenishment order?