INVENTORY CONTROL EXAMINATION QUESTIONS AND
CORRECT ANSWER WITH EXPLANATION GRADED A+
STUDY GUIDE SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. Inventory control refers to:
A. Hiring employees
B. Managing stock levels efficiently
C. Cooking operations
D. Marketing goods
Answer: B
Inventory control ensures proper management of stock.
2. The main objective of inventory control is to:
A. Increase stock randomly
B. Maintain optimal stock levels
C. Stop production
D. Delay delivery
Answer: B
It balances stock to avoid shortage or excess.
3. Inventory includes:
A. Employees
B. Raw materials, work-in-progress, and finished goods
C. Salaries
D. Machines only
Answer: B
Inventory is all stored goods.
4. Overstocking leads to:
,A. Lower cost
B. High holding costs
C. No risk
D. Faster delivery
Answer: B
Too much stock increases storage costs.
5. Stockout means:
A. Excess inventory
B. Running out of stock
C. Full warehouse
D. Increased production
Answer: B
Stock is unavailable.
6. Inventory turnover measures:
A. Employee movement
B. How fast inventory is sold and replaced
C. Salary changes
D. Recruitment speed
Answer: B
It tracks inventory usage.
7. Just-In-Time (JIT) inventory means:
A. Overstocking
B. Receiving stock when needed
C. Ignoring suppliers
D. Bulk storage
Answer: B
It reduces inventory waste.
8. Economic Order Quantity (EOQ) is:
, A. Random order size
B. Optimal order quantity minimizing cost
C. Maximum stock level
D. Minimum stock only
Answer: B
EOQ balances ordering and holding costs.
9. Safety stock is:
A. Damaged goods
B. Extra stock for emergencies
C. Sold inventory
D. Marketing stock
Answer: B
It prevents stockouts.
10. Reorder level is:
A. Maximum stock
B. Level at which new stock is ordered
C. Zero stock
D. Selling price
Answer: B
It triggers replenishment.
11. FIFO means:
A. Fast Input Fast Output
B. First In First Out
C. Final In Final Out
D. First Inventory Fixed Order
Answer: B
Old stock is used first.
12. LIFO means:
CORRECT ANSWER WITH EXPLANATION GRADED A+
STUDY GUIDE SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. Inventory control refers to:
A. Hiring employees
B. Managing stock levels efficiently
C. Cooking operations
D. Marketing goods
Answer: B
Inventory control ensures proper management of stock.
2. The main objective of inventory control is to:
A. Increase stock randomly
B. Maintain optimal stock levels
C. Stop production
D. Delay delivery
Answer: B
It balances stock to avoid shortage or excess.
3. Inventory includes:
A. Employees
B. Raw materials, work-in-progress, and finished goods
C. Salaries
D. Machines only
Answer: B
Inventory is all stored goods.
4. Overstocking leads to:
,A. Lower cost
B. High holding costs
C. No risk
D. Faster delivery
Answer: B
Too much stock increases storage costs.
5. Stockout means:
A. Excess inventory
B. Running out of stock
C. Full warehouse
D. Increased production
Answer: B
Stock is unavailable.
6. Inventory turnover measures:
A. Employee movement
B. How fast inventory is sold and replaced
C. Salary changes
D. Recruitment speed
Answer: B
It tracks inventory usage.
7. Just-In-Time (JIT) inventory means:
A. Overstocking
B. Receiving stock when needed
C. Ignoring suppliers
D. Bulk storage
Answer: B
It reduces inventory waste.
8. Economic Order Quantity (EOQ) is:
, A. Random order size
B. Optimal order quantity minimizing cost
C. Maximum stock level
D. Minimum stock only
Answer: B
EOQ balances ordering and holding costs.
9. Safety stock is:
A. Damaged goods
B. Extra stock for emergencies
C. Sold inventory
D. Marketing stock
Answer: B
It prevents stockouts.
10. Reorder level is:
A. Maximum stock
B. Level at which new stock is ordered
C. Zero stock
D. Selling price
Answer: B
It triggers replenishment.
11. FIFO means:
A. Fast Input Fast Output
B. First In First Out
C. Final In Final Out
D. First Inventory Fixed Order
Answer: B
Old stock is used first.
12. LIFO means:
