Inventory Management MCQ Multiple Choice Questions Answers

Q: 1. Which of the following is true for Inventory control?

Correct Answer is: Ordering cost decreases with lo size

Q: 2. Which of the following is true for Inventory control?

Correct Answer is: Ordering cost decreases with lo size

Q: 8. Average stock level can be calculated as

Correct Answer is: Maximum stock level + 1/3 of Re-order level

Q: 11. If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:

Correct Answer is: none of these

Q: 14. In the two-bin system, the quantity in the second bin is equal to the:

Correct Answer is: None of these

Q: 17. Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:

Correct Answer is: order frequency

Q: 18. Re-ordering level is calculated as

Correct Answer is: Minimum consumption rate x Maximum re-order period

Q: 20. The cost of insurance and taxes are included in

Correct Answer is: Cost of shortages

Inventory Management MCQs are designed to test and enhance your understanding of inventory control and management. These questions are ideal for students and professionals preparing for exams, interviews, and career advancement.

About Inventory Management MCQ Questions

Inventory Management MCQs cover a wide range of topics including inventory control techniques, demand forecasting, supply chain management, and stock management strategies. These questions are crafted to ensure a comprehensive understanding of the principles and practices involved in efficiently managing inventory levels.

Why Practice Inventory Management Objective Questions?

Practicing these MCQs can significantly improve your performance in exams, interviews, and real-world scenarios. They help reinforce key concepts, enhance problem-solving skills, and prepare you for various assessment formats. Regular practice also aids in identifying weak areas and building confidence in your knowledge of inventory management.

Who Should Use These MCQs?

Inventory Management MCQ Questions for Practice

1. Which of the following is true for Inventory control?

Economic order quantity has minimum total cost per order
Inventory carrying costs increases with quantity per order
Ordering cost decreases with lo size
All of the above

2. Which of the following is true for Inventory control?

Economic order quantity has minimum total cost per order
Inventory carrying costs increases with quantity per order
Ordering cost decreases with lo size
All of the above

3. Which product is usually bought on a fixed interval basis?

textbooks
wedding gifts
sugar
brownies

4. Which product is usually bought on an ROP basis?

textbooks
wedding gifts
sugar
newspaper

5. A fixed-interval ordering system would be used for items that have independent demand.

true.
false.

6. A store that sells daily newspapers could use the single-period model for reordering.

true.
false.

7. A two-bin system is essentially a simple reorder point system.

true.
false.

8. Average stock level can be calculated as

Minimum stock level + ½ of Re-order level
Maximum stock level + ½ of Re-order level
Minimum stock level + 1/3 of Re-order level
Maximum stock level + 1/3 of Re-order level

9. Holding and ordering costs are inversely related to each other.

true.
false.

10. If a decrease in unit price causes the average demand rate to increase, which one of these would not increase?

the EOQ
lead time
annual holding cost
the ROP

11. If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:

84
46
42
none of these

12. In an A-B-C system, B items typically represent about this percentage of items:

13. In the basic EOQ model, annual ordering cost and annual ordering cost are equal for the optimal order quantity.

true.
false.

14. In the two-bin system, the quantity in the second bin is equal to the:

EOQ
ROP
FOI
None of these

15. Increasing the order quantity so that it is slightly above the EOQ would not increase the total cost by very much.

true.
false.

16. Inventory might be held to take advantage of order cycles.

true.
false.

17. Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:

order size
order frequency
reorder point

18. Re-ordering level is calculated as

Maximum consumption rate x Maximum re-order period
Minimum consumption rate x Minimum re-order period
Maximum consumption rate x Minimum re-order period
Minimum consumption rate x Maximum re-order period

19. Setup costs are analogous to which one of these costs?

shortage
holding
excess
ordering

20. The cost of insurance and taxes are included in

Cost of ordering
Set up cost
Inventory carrying cost
Cost of shortages

21. The cost of insurance and taxes are included in

Cost of ordering
Set up cost
Inventory carrying cost
Cost of shortages

22. The economic order quantity cannot be used when holding costs are a percentage of purchase cost.

true.
false.

23. The following classes of costs are usually involved in inventory decisions except

Cost of ordering
Carrying cost
Cost of shortages
Machining cost

24. The following classes of costs are usually involved in inventory decisions except

Cost of ordering
Carrying cost
Cost of shortages
Machining cost

25. The minimum stock level is calculated as

Reorder level - (Nornal consumption x Normal delivery time)
Reorder level + (Nornal consumption x Normal delivery time)
(Reorder level + Nornal consumption) x Normal delivery time
(Reorder level + Nornal consumption) / Normal delivery time

26. The minimum stock level is calculated as

Reorder level â€“ (Nornal consumption x Normal delivery time)
Reorder level + (Nornal consumption x Normal delivery time)
(Reorder level + Nornal consumption) x Normal delivery time
(Reorder level + Nornal consumption) / Normal delivery time

27. The objective of inventory management is to minimize holding costs.

true.
false.

28. The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is

29. The time period between placing an order its receipt in stock is known as

Lead time
Carrying time
Shortage time
Over time

30. The two basic questions in inventory management are how much to order and when to order.

true.
false.

Inventory Management MCQ Multiple Choice Questions Answers | Quiz for Practice

About Inventory Management MCQ Questions

Why Practice Inventory Management Objective Questions?

Who Should Use These MCQs?

Inventory Management MCQ Questions for Practice

1. Which of the following is true for Inventory control?

2. Which of the following is true for Inventory control?

3. Which product is usually bought on a fixed interval basis?

4. Which product is usually bought on an ROP basis?

5. A fixed-interval ordering system would be used for items that have independent demand.

6. A store that sells daily newspapers could use the single-period model for reordering.

7. A two-bin system is essentially a simple reorder point system.

8. Average stock level can be calculated as

9. Holding and ordering costs are inversely related to each other.

10. If a decrease in unit price causes the average demand rate to increase, which one of these would not increase?

11. If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:

12. In an A-B-C system, B items typically represent about this percentage of items:

13. In the basic EOQ model, annual ordering cost and annual ordering cost are equal for the optimal order quantity.

14. In the two-bin system, the quantity in the second bin is equal to the:

15. Increasing the order quantity so that it is slightly above the EOQ would not increase the total cost by very much.

16. Inventory might be held to take advantage of order cycles.

17. Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:

18. Re-ordering level is calculated as

19. Setup costs are analogous to which one of these costs?

20. The cost of insurance and taxes are included in

21. The cost of insurance and taxes are included in

22. The economic order quantity cannot be used when holding costs are a percentage of purchase cost.

23. The following classes of costs are usually involved in inventory decisions except

24. The following classes of costs are usually involved in inventory decisions except

25. The minimum stock level is calculated as

26. The minimum stock level is calculated as

27. The objective of inventory management is to minimize holding costs.

28. The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is

29. The time period between placing an order its receipt in stock is known as

30. The two basic questions in inventory management are how much to order and when to order.

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Inventory Management MCQ Multiple Choice Questions Answers | Quiz for Practice

About Inventory Management MCQ Questions

Why Practice Inventory Management Objective Questions?

Who Should Use These MCQs?

Inventory Management MCQ Questions for Practice

1. Which of the following is true for Inventory control?

2. Which of the following is true for Inventory control?

3. Which product is usually bought on a fixed interval basis?

4. Which product is usually bought on an ROP basis?

5. A fixed-interval ordering system would be used for items that have independent demand.

6. A store that sells daily newspapers could use the single-period model for reordering.

7. A two-bin system is essentially a simple reorder point system.

8. Average stock level can be calculated as

9. Holding and ordering costs are inversely related to each other.

10. If a decrease in unit price causes the average demand rate to increase, which one of these would not increase?

11. If average demand for an item is 21 units per day, safety stock is 4 units, and lead time is 2 days, the ROP will be:

12. In an A-B-C system, B items typically represent about this percentage of items:

13. In the basic EOQ model, annual ordering cost and annual ordering cost are equal for the optimal order quantity.

14. In the two-bin system, the quantity in the second bin is equal to the:

15. Increasing the order quantity so that it is slightly above the EOQ would not increase the total cost by very much.

16. Inventory might be held to take advantage of order cycles.

17. Other things beings equal, an increase in lead time for inventory orders will result in an increase in the:

18. Re-ordering level is calculated as

19. Setup costs are analogous to which one of these costs?

20. The cost of insurance and taxes are included in

21. The cost of insurance and taxes are included in

22. The economic order quantity cannot be used when holding costs are a percentage of purchase cost.

23. The following classes of costs are usually involved in inventory decisions except

24. The following classes of costs are usually involved in inventory decisions except

25. The minimum stock level is calculated as

26. The minimum stock level is calculated as

27. The objective of inventory management is to minimize holding costs.

28. The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is

29. The time period between placing an order its receipt in stock is known as

30. The two basic questions in inventory management are how much to order and when to order.

Your Score

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