Inventory Management Flashcards
6 cards from real Supply Chain and Logistics practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Inventory Management flashcards as text
What does EOQ stand for in inventory management?
Answer: Economic Order Quantity
EOQ (Economic Order Quantity) is the ideal order quantity that minimizes total inventory holding and ordering costs.
Which inventory method assumes the first items purchased are the first items sold?
Answer: FIFO
FIFO (First In, First Out) assumes inventory purchased earliest is sold first, commonly used for perishable goods.
What is safety stock used for in inventory management?
Answer: Buffer against demand variability and supply delays
Safety stock is extra inventory held to protect against unexpected spikes in demand or delays in replenishment.
Which metric measures how many times inventory is sold and replaced over a period?
Answer: Inventory turnover
Inventory turnover ratio equals cost of goods sold divided by average inventory, indicating how efficiently stock is managed.
What is the primary goal of ABC analysis in inventory control?
Answer: Prioritize inventory items by value and volume
ABC analysis classifies inventory into A (high value), B (moderate), and C (low value) categories to focus management effort.
What does 'dead stock' refer to in inventory management?
Answer: Inventory that has never been sold and is unlikely to be sold
Dead stock consists of unsold inventory that occupies storage space and ties up capital without generating revenue.