CPPB Inventory Management 2

Question 1

Which inventory control technique establishes a maximum and minimum level between which stock is maintained?

Accepted Answer

Min-Max System

Answer

The Min-Max system triggers a replenishment order when stock falls to the minimum level, ordering enough to bring it back up to the maximum.

Question 2

A physical inventory count that covers the entire warehouse at one time is referred to as a:

Accepted Answer

Wall-to-wall inventory

Answer

A wall-to-wall (or complete physical) inventory involves counting every item in the facility during a single defined period, often requiring a halt to operations.

Question 3

Cycle counting differs from a full physical inventory in that cycle counting:

Accepted Answer

Counts a rotating subset of items on a continuous schedule throughout the year

Answer

Cycle counting breaks inventory into segments that are counted on a rotating basis, allowing continuous verification without disrupting operations.

Question 4

In public procurement inventory management, 'turnover rate' is best defined as:

Accepted Answer

The number of times average inventory is sold or used within a given period

Answer

Inventory turnover rate measures how efficiently stock is being used by dividing the cost of goods issued by the average inventory value.

Question 5

Which of the following is an example of a carrying (holding) cost in inventory management?

Accepted Answer

Warehouse space and insurance for stored goods

Answer

Carrying costs include expenses directly related to holding inventory, such as storage space, utilities, insurance, and capital tied up in stock.

CPPB - Certified Professional Public Buyer Practice Test

CPPB - Certified Professional Public Buyer Practice Test

CPPB Inventory Management 2