CVPM Inventory and Cost Control 3

Question 1

A practice orders 200 units of flea prevention monthly at $8 each. Holding cost is $0.50/unit/month and ordering cost is $25/order. What is the EOQ?

Accepted Answer

141 units

Answer

EOQ = √(2 × 200 × $25 / $0.50) = √(20,000) ≈ 141 units.

Question 2

Which of the following best describes 'dead stock' in a veterinary inventory context?

Accepted Answer

Items that have not sold within a defined period and are unlikely to sell

Answer

Dead stock refers to inventory that has remained unsold for an extended period and has little prospect of future sale.

Question 3

A practice's average inventory value is $40,000 and annual COGS is $320,000. What is the inventory turnover rate?

Accepted Answer

8 times

Answer

Inventory turnover = COGS / average inventory = $320,000 / $40,000 = 8 times per year.

Question 4

Which controlled substance schedule in the US includes drugs with the highest accepted medical use but still significant abuse potential, such as ketamine?

Accepted Answer

Schedule III

Answer

Ketamine is classified as a Schedule III controlled substance, indicating accepted medical use with moderate-to-low physical dependence risk.

Question 5

What is the main advantage of a perpetual inventory system over a periodic one?

Accepted Answer

It provides real-time stock level data

Answer

A perpetual inventory system updates stock levels continuously with each transaction, providing real-time visibility into inventory.

(CVPM) Certified Veterinary Practice Manager Practice Test

(CVPM) Certified Veterinary Practice Manager Practice Test

CVPM Inventory and Cost Control 3