Inventory planning and control Interview Questions And Answers

1. Compensation for differences in the timing of supply and demand
2. Compensation for the uncertainties inherent in supply and demand
3. One or more stages in the operation cannot supply all the items it produces simultaneously
4. Material cannot be transported instantaneously between the point of supply and the point of demand

Compensation for the uncertainties inherent in supply and demand

1. One or more stages in the operation cannot supply all the items it produces simultaneously
2. Compensation for the uncertainties inherent in supply and demand
3. Compensation for differences in the timing of supply and demand
4. Material cannot be transported instantaneously between the point of supply and the point of demand

One or more stages in the operation cannot supply all the items it produces simultaneously

1. The assumptions included in the models
2. Small errors in estimating will not result in a significant deviation from the EOQ
3. The real costs of stock in operations
4. The use of the models as prescriptive devices

Small errors in estimating will not result in a significant deviation from the EOQ

1. A system in which everything is split between two storage bins
2. A system in which two full bins of an item are always held in stock
3. A system in which suppliers deliver two bins at a time
4. A system in which orders are placed when only one complete bin of stock is remaining

A system in which orders are placed when only one complete bin of stock is remaining

1. The 80% of high-value items that account for around 20% the total stock value
2. The 20% of high-value items that account for around 20% the total stock value
3. The 20% of high-value items that account for around 80% the total stock value
4. The 80% of high-value items that account for around 80% the total stock value

The 20% of high-value items that account for around 80% the total stock value

1. Production scheduling
2. Monitoring the workings of a MRP system
3. Control of dependent demand inventory items
4. Inventory quality control
5. Control of independent demand inventory items

Control of independent demand inventory items

1. Will depend on how many related parts are required in the same period
2. Is used to calculate how much safety stock should be carried
3. Is a formula that calculates a realistic purchase price for an item
4. Should be calculated once a year
5. Determines the lowest order quantity by balancing the cost of ordering against the cost of holding stock

Determines the lowest order quantity by balancing the cost of ordering against the cost of holding stock

1. Replenishment is non-instantaneous
2. Demand is unstable and unpredictable
3. The purchase price per unit varies with the quantity ordered
4. There is a point where stockholding costs are equal to ordering costs
5. A doubling of demand requires a doubling of the order quantity

There is a point where stockholding costs are equal to ordering costs

1. Order Point
2. Materials Requirements Planning
3. Just-in-Time
4. Periodic Review
5. Two-Bin System

Periodic Review

1. Materials Requirements Planning
2. Just-in-Time
3. Two-Bin System
4. Order Point
5. Periodic Review
6. Poke-Yoka

Periodic Review

1. Ordering inventory at a predetermined re-order level
2. Ordering inventory when it falls below the designated safety stock level
3. Ordering inventory in consultation with suppliers relative to their available capacity
4. Ordering inventory to supplier call-offs on an as required basis
5. Ordering inventory at a fixed and regular time interval

Ordering inventory at a fixed and regular time interval

Inventory control is the process of reducing inventory costs while remaining responsive to customer demands. By this definition a store would want to lower its acquisition, carrying ordering and stock-out costs to their lowest possible levels. However a store would need to have enough inventories to meet any needs of its customers.

☛ Ordering inventory at a predetermined re-order level
☛ Ordering inventory when it falls below the designated safety stock level
☛ Ordering inventory in consultation with suppliers relative to their available capacity
☛ Ordering inventory to supplier call-offs on an as required basis
☛ Ordering inventory at a fixed and regular time interval

The value can be found using four methods in inventory control. The first is the specific cost in which each item's cost is added together for the inventory's value. A second method is to use the weighted average of the costs for a period to determine value. A third method is first in, first out. In this method value is measured using the latest costs of goods while working towards the beginning of the period until all goods in inventory are valued. The final method is last in, first out. In this method the costs of gods at the beginning of the period are used to determine the inventory's value.

For inventory control to work at its best a store must consider the costs of acquisition, carrying, ordering and stock-out. the store must also look at its reordering system, its budgeting for inventory, insurance and forecast the demand.

Inventory levels and their values can effect the income of the store, the amount of taxes paid and the total stocking cost.

The EOQ level is the point at which stocking costs are at their lowest point for a given item.

The model only works for those cases that meet its assumptions.

The EOQ formula is the square root of 2 times demand times order completion cost divided by carrying cost. The mathematical formula is square root of 2DS/C.

Yes, a discount will cause the basic EOQ model to fail. To use a discount in determine a EOQ you must use the EOQ model with quantity discounts.

If there is no savings a error in the calculations may have occurred or the model does not fit your case. For instances were the total stocking costs are even you may use either order quantity.

A inventory should be taken at least once a year. If items are perishable, seasonal or highly demanded a inventory should be taken more often.

There are two types of forecasting qualitative and quantitative. Qualitative uses personal opinions to determine forecasts. Quantitative uses numerical data and statistical modeling to determine forecasts.

Through the use of forecasts inventory levels can be set to meet the demands while keeping levels as low as possible.

By following your inventory policy you should be able to realize important advantages in inventory control. The first is reduced costs for inventories, along with reduced amounts of inventory. Theft and shrinkage should also be reduced if inventory policy is followed. The final benefit will be increased profits for the store.