Supply Chain and Logistics Inventory Management 3

Question 1

What is cycle counting?

Accepted Answer

Counting a rotating subset of inventory items on a regular schedule

Answer

Counting all inventory at fiscal year end

Answer

Tracking order cycles from supplier

Answer

Auditing freight invoices monthly

Question 2

Which inventory valuation method results in the lowest net income during rising prices?

Accepted Answer

LIFO

Answer

FIFO

Answer

Weighted Average

Answer

Specific Identification

Question 3

What does VMI stand for in supply chain management?

Accepted Answer

Vendor-Managed Inventory

Answer

Variable Markup Index

Answer

Volume Measurement Indicator

Answer

Value Management Integration

Question 4

What is the formula for Days Inventory Outstanding (DIO)?

Accepted Answer

(Average Inventory / COGS) × 365

Answer

Revenue / Average Inventory

Answer

COGS / Average Inventory

Answer

Net Income / Total Assets

Question 5

What is a bill of materials (BOM)?

Accepted Answer

A comprehensive list of raw materials and components needed to manufacture a product

Answer

A supplier invoice list

Answer

A shipping manifest

Answer

A warehouse picking list

Question 6

Which inventory strategy reduces risk by stocking products closest to confirmed demand?

Accepted Answer

Pull strategy

Answer

Push strategy

Answer

Batch processing

Answer

Mass customization