Free Practice Quiz Question List

5 Inventory Management Online Quiz Questions

Use this free practice quiz with 20 questions to review 5 Inventory Management, test your knowledge, and prepare for your next test or exam.

20 questions

True or false

1 point

True or false: Safety stock is intended to buffer against uncertainty in demand or replenishment lead time.

A
True
B
False

Written response

1 point

What inventory category describes items that are in transit through the supply chain?

True or false

1 point

True or false: ABC ranking by annual usage value should not automatically override an item's operational criticality; a low-value spare may merit close attention if it is essential.

A
True
B
False

Fill in the blank

1 point

Inventory position equals on-hand inventory plus on-order inventory minus .

Choose one

1 point

A warehouse monitors inventory position continuously and places the same-sized order whenever inventory position reaches or falls below a threshold. Which policy is it using?

A
An (s, S) policy: order at s and raise inventory position to target S
B
A continuous-review (s, Q) policy: order fixed quantity Q when inventory position reaches or falls below s
C
A periodic-review (R, S) policy: check inventory position at regular intervals and raise it to S

Written response

1 point

A product has average demand of 24 units per day, a lead time of 3 days, and 18 units of safety stock. Using reorder point = expected demand during lead time + safety stock, what is its reorder point? Enter the number of units. $24 \times 3 + 18$

Fill in the blank

1 point

In a periodic-review policy, the target inventory must protect against demand during both the .

Choose one

1 point

Which statement correctly distinguishes cycle service level from fill rate?

A
Cycle service level is the share of total demand supplied immediately; fill rate is the probability of avoiding a stockout during a cycle.
B
Cycle service level and fill rate both measure the proportion of demand supplied immediately.
C
Cycle service level is the probability of avoiding a stockout during a replenishment cycle; fill rate is the share of demand supplied immediately from available stock.

Choose all

1 point

Which situations are examples of anticipation stock? Select all that apply.

A
A retailer builds extra stock before a predictable seasonal sales peak.
B
A factory holds stock between two stages so that a delay at the first stage does not immediately stop the second.
C
A manufacturer builds stock ahead of a planned shutdown.

Choose all

1 point

Which practices support effective inventory control? Select all that apply.

A
Record receipts, picks, returns, transfers, and adjustments promptly.
B
Adjust balances after a count without investigating why discrepancies occurred.
C
Count stock regularly and investigate the causes of discrepancies.
D
Update demand and lead-time estimates as conditions change.

Choose one

1 point

A spare part has low annual usage value but is essential to keep a production line running. What is the best inventory-control response?

A
Give the spare appropriate attention because its operational criticality may matter more than its low usage value.
B
Automatically place the spare in the lowest-priority group because its annual usage value is low.
C
Ignore the spare when setting controls because ABC analysis ranks only expensive items.

Open ended

1 point

A retailer is considering replacing continuous review with periodic review to coordinate replenishment across several products. Explain one operational benefit of periodic review and why it may require a higher inventory target than continuous review.

Choose one

1 point

Using the safety stock formula $z \times \sigma \times \sqrt{L}$ , what is the safety stock when $z = 1.5$ , demand standard deviation per period $\sigma = 4$ units, and lead time $L = 9$ periods?

A
12 units
B
18 units
C
24 units
D
36 units

True or false

1 point

True or false: A fill rate is the probability of avoiding a stockout during a replenishment cycle.

A
True
B
False

Choose one

1 point

A retailer counts goods that have left a supplier but have not yet arrived at its warehouse. Which inventory role describes these goods?

A
Cycle stock
B
Pipeline stock
C
Safety stock
D
Anticipation stock

Choose one

1 point

A company has 80 units on hand, 50 units on order, and 15 units of backorders. What is its inventory position?

A
65 units
B
95 units
C
115 units
D
145 units

Written response

1 point

A manufacturer holds items between two process stages so that a delay at the first stage does not immediately stop the second. What inventory role is this?

Choose one

1 point

Under a continuous-review (s, Q) policy, inventory position has reached the reorder point. What action should the organization take?

A
Order a fixed quantity when inventory position reaches or falls below the reorder point.
B
Order enough to raise inventory position to a target whenever it reaches the reorder point.
C
Order a fixed quantity only at scheduled review intervals.
D
Order enough to cover only the current backorders.

Choose one

1 point

A business uses a periodic-review (R, S) policy. Which demand horizon should its target stock protect against?

A
Demand only during supplier lead time
B
Demand only until the next scheduled review
C
Demand during the review interval and supplier lead time
D
Average demand over the previous review interval only

Written response

1 point

Average demand is 24 units per day, supplier lead time is 3 days, and safety stock is 12 units. Using expected demand during lead time plus safety stock, what is the reorder point?