Supply Chain Management Warehousing 5 — Questions and Answers
Question 1: Which inventory costing method assumes the most recently purchased items are the first to be sold?
- FIFO
- LIFO (Correct answer)
- Weighted average cost
- Specific identification
Correct answer: LIFO
LIFO (Last In, First Out) assumes newer inventory is sold first, which can reduce taxable income during inflationary periods.
Question 2: What is a 'pick-to-light' system in warehouse operations?
- A system using UV lights to sanitize picked items
- LED displays mounted at storage locations that guide pickers to the correct bin and quantity (Correct answer)
- Overhead lighting that activates only in occupied aisles
- A laser-guided forklift navigation system
Correct answer: LED displays mounted at storage locations that guide pickers to the correct bin and quantity
Pick-to-light uses illuminated displays at each bin location to direct pickers, reducing errors and improving speed.
Question 3: In a distribution center, what is the purpose of a 'sortation system'?
- Organizing worker schedules by department
- Automatically directing individual items or cartons to designated destinations or shipping lanes (Correct answer)
- Sorting supplier invoices by priority
- Categorizing products by ABC velocity classification
Correct answer: Automatically directing individual items or cartons to designated destinations or shipping lanes
Sortation conveyors automatically route individual units to the correct outbound lanes, shipping docks, or packing stations.
Question 4: What risk does excessive safety stock carry for a warehouse operation?
- Increased stockout frequency
- Higher carrying costs and potential obsolescence (Correct answer)
- Reduced order accuracy
- Lower customer service levels
Correct answer: Higher carrying costs and potential obsolescence
While safety stock prevents stockouts, too much ties up capital in storage costs and risks product expiration or obsolescence.
Question 5: Which warehouse process involves inspecting inbound shipments for quantity, quality, and damage before storing them?
- Slotting
- Receiving and putaway (Correct answer)
- Replenishment
- Returns processing
Correct answer: Receiving and putaway
Receiving and putaway includes verifying shipment accuracy and condition before products are moved to designated storage locations.
Question 6: What is the key advantage of a 'goods-to-person' fulfillment system over a traditional 'person-to-goods' system?
- Lower initial capital investment
- Reduced picker travel time by bringing items to a stationary workstation (Correct answer)
- Ability to handle larger palletized loads
- Elimination of the need for a WMS
Correct answer: Reduced picker travel time by bringing items to a stationary workstation
Goods-to-person systems (using robots or AS/RS) eliminate most picker travel, dramatically increasing picks-per-hour rates.
Question 7: A warehouse 'returns center' that grades, restores, repackages, and resells returned products is performing which supply chain function?
- Forward logistics
- Reverse logistics (Correct answer)
- Cross-docking
- Demand planning
Correct answer: Reverse logistics
Reverse logistics manages the flow of returned goods back through the supply chain for recovery, resale, recycling, or disposal.
Supply Chain Management Warehousing 5
Which inventory costing method assumes the most recently purchased items are the first to be sold?