CVPM Inventory and Cost Control 4

Question 1

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

Accepted Answer

Reduced inventory complexity and improved purchasing leverage

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

Reducing average inventory on hand

Answer

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

Question 4

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

Accepted Answer

The average number of days inventory is held before being sold

Answer

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

Question 5

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

Accepted Answer

A client leaving without treatment because a medication was unavailable

Answer

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

(CVPM) Certified Veterinary Practice Manager Practice Test

(CVPM) Certified Veterinary Practice Manager Practice Test

CVPM Inventory and Cost Control 4