Practice Test Geeks(CVPM) Certified Veterinary Practice Manager Practice Test
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Inventory and Cost Control Flashcards

7 cards from real CVPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Inventory and Cost Control flashcards as text

  1. A practice implements a formulary to standardize drug selection. What is the primary operational benefit?

    Answer: Reduced inventory complexity and improved purchasing leverage

    A formulary limits product choices to preferred items, reducing stock complexity, simplifying ordering, and increasing volume discounts with fewer suppliers.

  2. Which practice best prevents controlled substance diversion in a veterinary clinic?

    Answer: Requiring dual sign-off on controlled substance logs and conducting regular reconciliation

    Dual sign-off and regular reconciliation of controlled substance logs are the most effective deterrents to diversion.

  3. A practice wants to reduce carrying costs. Which action directly achieves this goal?

    Answer: Reducing average inventory on hand

    Carrying costs (storage, insurance, obsolescence) are proportional to the amount of inventory held; reducing average stock lowers them.

  4. What does the term 'days inventory outstanding (DIO)' measure?

    Answer: The average number of days inventory is held before being sold

    DIO = (average inventory / COGS) × 365, indicating how many days on average inventory sits before sale.

  5. In a veterinary practice, which scenario represents a 'stockout cost'?

    Answer: A client leaving without treatment because a medication was unavailable

    A stockout cost occurs when the absence of inventory causes lost revenue and potential client defection.

  6. Which pricing strategy sets product prices based on what competitors charge rather than on cost-plus calculations?

    Answer: Competitive pricing

    Competitive pricing sets prices by benchmarking against what competitors charge for similar products or services.

  7. A practice notices that one vaccine line consumes 60% of refrigerator space but contributes only 8% of revenue. What is the most appropriate managerial response?

    Answer: Evaluate reducing stock depth and negotiating JIT delivery to free up space

    High space usage with low revenue contribution warrants reducing on-hand quantity and using just-in-time ordering to optimize the return on storage resources.