MHC Storage & Inventory Management 2

Question 1

What does the term 'dead stock' refer to in inventory management?

Accepted Answer

Items that are obsolete or no longer sellable

Answer

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?

Accepted Answer

LIFO

Answer

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?

Accepted Answer

When the first bin is emptied

Answer

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?

Accepted Answer

They maximize storage density by reducing aisle width

Answer

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'?

Accepted Answer

Loss of inventory due to theft, damage, or administrative error

Answer

Shrinkage is the unexplained reduction in inventory quantity caused by theft, damage, miscounting, or administrative errors.

(MHC) Material Handling Certification Practice Test