#1
Which method is commonly used for inventory valuation?
FIFO (First-In-First-Out)
LIFO (Last-In-First-Out)
Weighted Average
Specific Identification
#2
What does COGS stand for in the context of accounting?
Cost of Goods Sold
Cost of Goods Saved
Cost of Goods Stored
Cost of Goods Services
#3
How does carrying costs impact inventory management?
Increase overall costs
Decrease overall costs
No impact on costs
Impact revenue only
#4
What is the Economic Order Quantity (EOQ) formula used for in inventory management?
To calculate reorder point
To minimize ordering costs
To determine safety stock
To optimize order quantity and holding costs
#5
What is the purpose of safety stock in inventory management?
To increase holding costs
To avoid stockouts
To maximize order quantity
To decrease lead time
#6
How does the Just-In-Time (JIT) inventory system aim to reduce costs?
By increasing holding costs
By minimizing order quantity
By maximizing safety stock
By increasing lead time
#7
Which inventory costing method assumes that the most recently acquired items are the first to be sold?
FIFO (First-In-First-Out)
LIFO (Last-In-First-Out)
Weighted Average
Specific Identification
#8
What is the impact of a high inventory turnover ratio on a business?
Higher holding costs
Increased profitability
Decreased sales
Longer lead times
#9
What is the primary purpose of the ABC analysis in inventory management?
To determine the Economic Order Quantity (EOQ)
To classify items based on value and control importance
To calculate holding costs
To minimize order quantity
#10
In the ABC analysis method, which category includes items with the highest value and tight control?
Category A
Category B
Category C
Category D
#11
What does the term 'deadstock' refer to in inventory management?
Items with high demand
Items with low demand
Items in transit
Items with high value
#12
Which cost is not considered in the calculation of Total Cost of Ownership (TCO) for inventory?
Purchase cost
Holding cost
Ordering cost
Sales revenue
#13
What is the primary goal of demand forecasting in inventory management?
To maximize holding costs
To minimize order quantity
To accurately predict future demand
To increase lead time
#14
How does the EOQ (Economic Order Quantity) formula change if ordering costs increase?
Increases
Decreases
Remains unchanged
No impact on ordering quantity
#15
What is the primary disadvantage of using the LIFO (Last-In-First-Out) inventory costing method?
Higher tax liabilities in inflationary periods
Lower tax liabilities in inflationary periods
More accurate representation of current costs
Minimization of holding costs
#16
How does lead time variability affect inventory management?
Increases the need for safety stock
Decreases holding costs
Reduces order quantity
No impact on inventory levels