MHC Storage & Inventory Management 4

Question 1

What does 'SKU rationalization' mean in inventory management?

Accepted Answer

Reducing the number of active SKUs by eliminating low-value items

Answer

SKU rationalization is the process of identifying and discontinuing slow-moving or redundant SKUs to simplify operations and reduce carrying costs.

Question 2

Which type of warehouse layout places receiving and shipping on opposite ends of the building?

Accepted Answer

Through-flow (straight-line) layout

Answer

A through-flow layout positions receiving at one end and shipping at the other, allowing goods to move in a straight line through the warehouse.

Question 3

What is the role of a 'slotting profile' in warehouse management?

Accepted Answer

A data-driven plan defining the optimal storage location for each SKU

Answer

A slotting profile uses pick frequency, product dimensions, and weight data to assign each SKU to its most efficient storage location.

Question 4

An ABC analysis categorizes inventory into three groups. Which group typically represents ~80% of inventory value?

Accepted Answer

A items

Answer

A items represent roughly 20% of SKUs but account for about 80% of total inventory value, making them the highest priority for tight control.

Question 5

What is a 'bonded warehouse' primarily used for?

Accepted Answer

Holding imported goods before customs duties are paid

Answer

A bonded warehouse is a secured facility where imported goods can be stored, processed, or manufactured before customs duties are paid.

(MHC) Material Handling Certification Practice Test