CVPM - Certified Veterinary Practice Manager Inventory and Cost Control Questions and Answers

Question 1

A practice manager performs an ABC analysis of the pharmacy inventory and finds that 15% of the items account for 75% of the total annual drug expenditure.
According to standard inventory control principles, how should these items be managed?

Accepted Answer

Managed with tight controls, lower reorder points, and more frequent physical counts.

Answer

Ordered in large bulk quantities to maximize volume discounts, regardless of turnover rate.

Answer

Categorized as 'C' items and ordered only when stock is completely depleted.

Answer

Audited annually with all other inventory items to ensure consistency.

Question 2

What is the primary function of establishing a reorder point (ROP) for a specific inventory item within a veterinary practice's management software?

Accepted Answer

To automatically trigger a purchase order when the on-hand quantity reaches a predetermined minimum level.

Answer

To calculate the total annual cost of goods sold for that item.

Answer

To determine the most profitable markup percentage for the item.

Answer

To identify which items are expiring within the next 30 days.

Question 3

Which of the following is a significant cause of inventory shrinkage in a veterinary practice that is NOT related to product expiration or physical damage?

Accepted Answer

Failure to charge a client for a dispensed medication during a busy checkout.

Answer

Receiving volume discounts from a new supplier.

Answer

A high inventory turnover rate of 12 turns per year.

Answer

Negotiating longer payment terms with a primary distributor.

Question 4

A practice manager is reviewing inventory and notices the clinic stocks four different brands of non-steroidal anti-inflammatory drugs (NSAIDs) with similar efficacy and cost. To improve cost control, the manager works with the veterinarians to select one preferred brand. This strategy primarily addresses which inventory problem?

Accepted Answer

Redundant formulary and increased carrying costs.

Answer

Calculating the economic order quantity (EOQ).

Answer

A low inventory turnover rate.

Answer

Inaccurate biennial controlled substance counts.

Question 5

A veterinary practice manager is preparing for the federally-mandated biennial controlled substance inventory. According to DEA regulations, how must an open container of a Schedule II drug be counted?

Accepted Answer

An exact physical count of the remaining units must be performed and recorded.

Answer

An estimated count is sufficient if the container held fewer than 1,000 units.

Answer

The count from the last physical inventory can be carried forward if the seal was recently broken.

Answer

The container can be excluded if it is less than 25% full.

Question 6

A well-managed, general small animal practice calculates its annual inventory turnover rate to be 10. What does this metric most likely indicate?

Accepted Answer

The practice is efficiently managing its inventory, selling and replacing it about every 1.2 months.

Answer

The practice has excessive capital tied up in slow-moving stock.

Answer

The practice is at high risk of product expirations and obsolescence.

Answer

The practice is likely experiencing frequent stockouts due to ordering insufficient quantities.

A practice manager performs an ABC analysis of the pharmacy inventory and finds that 15% of the items account for 75% of the total annual drug expenditure.According to standard inventory control principles, how should these items be managed?

A practice manager performs an ABC analysis of the pharmacy inventory and finds that 15% of the items account for 75% of the total annual drug expenditure.
According to standard inventory control principles, how should these items be managed?