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Questions and Answers
What are the 4 types of inventory controls?
What are the 4 types of inventory controls?
What does low turnover indicate in terms of inventory?
What does low turnover indicate in terms of inventory?
What does high turnover indicate in terms of inventory?
What does high turnover indicate in terms of inventory?
What does the inventory turnover formula calculate?
What does the inventory turnover formula calculate?
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What is the impact of running out of inventory (out-of-stock)?
What is the impact of running out of inventory (out-of-stock)?
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What is the impact of overstocking inventory?
What is the impact of overstocking inventory?
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What is the purpose of effective inventory management in relation to shrinkage?
What is the purpose of effective inventory management in relation to shrinkage?
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What does old stock depreciation emphasize in inventory management?
What does old stock depreciation emphasize in inventory management?
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What is the primary factor in determining how much of a product a business needs and when they need it?
What is the primary factor in determining how much of a product a business needs and when they need it?
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Study Notes
Inventory Control Types
- There are four types of inventory control: manual, perpetual, periodic, and just-in-time (JIT) systems.
Inventory Turnover Indicators
- Low inventory turnover indicates slow-moving or obsolete stock, resulting in storage costs and potential waste.
- High inventory turnover indicates fast-moving stock, suggesting efficient sales and restocking strategies.
Inventory Turnover Formula
- The inventory turnover formula calculates the number of times inventory is sold and replaced within a given period.
Consequences of Inventory Management
- Running out of inventory (out-of-stock) can lead to lost sales, customer dissatisfaction, and potential loss of market share.
- Overstocking inventory can result in storage costs, obsolescence, and potential waste.
Effective Inventory Management
- Effective inventory management aims to minimize shrinkage, which includes theft, damage, and administrative errors.
Inventory Depreciation
- Old stock depreciation emphasizes the importance of regularly reviewing and clearing out outdated or slow-moving inventory to optimize storage space and minimize waste.
Determining Inventory Needs
- The primary factor in determining how much of a product a business needs and when they need it is demand forecasting, which involves analyzing sales trends and seasonal fluctuations.
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Description
Test your knowledge of inventory management with this quiz. Learn about the 4 types of inventory controls, how to calculate inventory turnover, and the importance of matching inventory levels with customer demand. Understand the integral role of inventory management in the supply chain and its impact on business operations.
