MHC Storage & Inventory Management 2 — Questions and Answers
Question 1: What does the term 'dead stock' refer to in inventory management?
- Items that are obsolete or no longer sellable (Correct answer)
- Stock stored in inactive warehouse zones
- Products awaiting quality inspection
- Items returned by customers for credit
Correct answer: Items that are obsolete or no longer sellable
Dead stock refers to inventory that can no longer be sold or used, often due to obsolescence, expiration, or discontinued demand.
Question 2: Which storage method places the most recently received stock at the front, pushing older stock to the back?
- FIFO
- LIFO (Correct answer)
- FEFO
- Random slotting
Correct answer: LIFO
LIFO (Last In, First Out) means the most recently received items are the first to be picked, pushing older inventory deeper into storage.
Question 3: A warehouse uses a 'two-bin system' for replenishment. What triggers a reorder?
- When the first bin is emptied (Correct answer)
- When total stock falls below safety stock
- When the second bin begins to be used
- When a purchase order is manually submitted
Correct answer: When the first bin is emptied
In a two-bin system, emptying the first bin triggers a reorder, while the second bin supplies demand during the replenishment lead time.
Question 4: What is the primary advantage of narrow-aisle storage racking systems?
- They allow forklifts to operate at higher speeds
- They maximize storage density by reducing aisle width (Correct answer)
- They eliminate the need for inventory tracking
- They require no specialized equipment to operate
Correct answer: They maximize storage density by reducing aisle width
Narrow-aisle racking maximizes warehouse floor space utilization by reducing aisle widths, increasing storage capacity within the same footprint.
Question 5: In inventory management, what is 'shrinkage'?
- The physical compression of goods during storage
- Loss of inventory due to theft, damage, or administrative error (Correct answer)
- Reduction in product size due to temperature changes
- The write-down of slow-moving stock value
Correct answer: Loss of inventory due to theft, damage, or administrative error
Shrinkage is the unexplained reduction in inventory quantity caused by theft, damage, miscounting, or administrative errors.
Question 6: Which of the following best describes a 'zone picking' strategy?
- Picking all orders in a single pass through the warehouse
- Assigning pickers to specific areas who only pick items from their zone (Correct answer)
- Rotating pickers through all warehouse zones each shift
- Batching orders by product weight before picking
Correct answer: Assigning pickers to specific areas who only pick items from their zone
Zone picking divides the warehouse into sections where dedicated pickers only handle items within their assigned area, improving efficiency.
Question 7: What is the purpose of a 'velocity slotting' strategy in a warehouse?
- Assigning fast-moving items to the most accessible storage locations (Correct answer)
- Tracking the speed at which forklifts travel through aisles
- Sorting items by weight to prevent shelf overloading
- Grouping items by product category regardless of demand frequency
Correct answer: Assigning fast-moving items to the most accessible storage locations
Velocity slotting places high-turnover items near shipping areas or at ergonomic pick heights to minimize travel time and labor costs.
MHC Storage & Inventory Management 2
What does the term 'dead stock' refer to in inventory management?