CWLP Inventory Management & Control 3

Question 1

A company's annual demand is 12,000 units, ordering cost is $150 per order, and holding cost is $3 per unit per year. What is the Economic Order Quantity (EOQ)?

Accepted Answer

1,000 units

Answer

EOQ = √(2 × 12,000 × 150 / 3) = √1,200,000 = 1,000 units.

Question 2

Which inventory control technique uses barcode or RFID scanning after each transaction to maintain a running balance?

Accepted Answer

Perpetual inventory system

Answer

A perpetual inventory system continuously updates records after every receipt, shipment, or adjustment in real time.

Question 3

What is 'obsolete inventory' in a warehouse context?

Accepted Answer

Stock that is no longer sellable due to expiration, discontinuation, or technological change

Answer

Obsolete inventory refers to items that can no longer be sold or used due to expiration, product discontinuation, or market changes.

Question 4

The two-bin replenishment system triggers a reorder when:

Accepted Answer

The first bin is emptied and work begins on the second bin

Answer

In a two-bin system, emptying the first bin signals replenishment while the second bin covers demand during lead time.

Question 5

Which costing method results in the same unit cost for all identical items regardless of when they were purchased?

Accepted Answer

Weighted Average Cost

Answer

Weighted Average Cost calculates one blended cost per unit by dividing total inventory cost by total units available.

(CWLP) Certified Warehouse and Logistics Professional Practice Test

(CWLP) Certified Warehouse and Logistics Professional Practice Test

CWLP Inventory Management & Control 3