Question 1. Do You Know When Should A Physical Inventory Be Taken?
A inventory have to be taken at least once a yr. If items are perishable, seasonal or highly demanded a inventory ought to be taken more frequently.
Question 2. Explain Can A Computer Help In Forecasting Future Demand?
Yes, In the marketplace nowadays there are numerous laptop software program packages that could compute forecasted demand for items held in stock.
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Question three. Do You Know What Does Eoq Stand For?
EOQ stands for Economic Order Quantity.
Question 4. Tell Me Can Forecasting Help In Controlling Inventory?
Yes, through using forecasts inventory stages can be set to fulfill the needs while maintaining tiers as little as viable.
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Question five. Tell Me What Is Forecasting?
Forecasting is the system of estimating the future call for of a product.
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Question 6. What Is Raw Material?
Are those fundamental inputs that are converted into completed product through the manufacturing manner. Raw materials inventories are the ones gadgets which have been bought and stored for destiny productions.
Question 7. Do You Know What Is A Order Point?
A order factor is a point in time at which a order is placed to fill up goods in stock.
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Question 8. Do You Know What Is Demand?
Demand is the quantity that customers are willing to buy. Demand may be found via forecasting and is wanted to discover the EOQ stage.
Question 9. Tell Me What Is An Order Quantity?
An order quantity is the amount of goods that an order requests be shipped to the shop.
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Question 10. Tell Me What Types Of Forecasting Can I Do?
There are two sorts of forecasting qualitative and quantitative. Qualitative uses private critiques to decide forecasts. Quantitative uses numerical data and statistical modeling to decide forecasts.
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Question 11. Explain What Is Lead Time?
Lead time is the time period from which a order for goods is placed till it is obtained via the shop. Lead time is an critical consideration for determining when orders must be placed.
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Question 12. Suppose I Get A Discount Will It Effect The Eoq Model?
Yes, a discount will cause the fundamental EOQ version to fail. To use a reduction in determine a EOQ you must use the EOQ model with amount discounts.
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Question 13. Tell Me What Is Cycle Count?
A cycle be counted is an inventory auditing manner, which falls under inventory management, in which a small subset of stock, in a particular location, is counted on a certain day. Cycle counts evaluation with conventional physical inventory in that a full bodily stock may stop operation at a facility even as all items are counted at one time.
It facilitates to see the difference among Actual stock and Book Stock. Book Stock is the stock available inside the device.
Question 14. Do You Know What Is The Eoq Formula?
The EOQ system is the square root of 2 instances demand times order of completion fee divided by means of wearing cost. The mathematical method is rectangular root of 2DS/C.
Question 15. Tell Me What Do The Letters In The Eoq And Stocking Cost Formula Stand For?
The letters inside the formulation represent the amount ordered(Q), the sporting fee of a unit(C), the call for for the devices(D) and the fee of finishing a order(S).
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Question sixteen. Tell Us What Does Inventory Affect In A Store?
Inventory levels and their values can affect the earnings of the shop, the quantity of taxes paid, and the whole stocking cost.
Question 17. Tell Me What Skills Make You Great At What You Do As An Inventory Specialist?
I am a stickler for perfection and business enterprise. In addition to this, I own exquisite leadership characteristics which make it easy for me to direct personnel to do their activity nicely. Possessing know-how of accounting procedures makes it easy for me to control related bookkeeping and price range management responsibilities.
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Question 18. Do You Know What Is Interference?
Interference is a aspect in forecasting call for. Interference is made of all of the factors that a forecaster has no control over. Factors that can be considered interference consist of natural disasters, unusual client needs, or uncommon activities within the enterprise duration.
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Question 19. Do You Know As An Inventory Specialist, What Are Your Specific Duties?
Working as an stock expert, I am required to increase and enforce an universal stock management plan which includes materials procurement, inventory stock degrees, and facility needs and employees control. Additionally, I am required to offer course to group of workers members who manage stock manipulate and make sure any overstocking or shortages are treated in a time efficient manner.
Question 20. Explain Me What Is Opening Stock And Closing Stock?
At the beginning of a reporting length, or after a cycle matter, the inventory available in your stock account is the Opening Stock. It is likewise known as as Beginning Inventory.
So, there's an Opening Stock. Then, plenty of transactions takes place - Items are purchased and Sold. And subsequently Closing Stock is calculated.
Closing stock is the quantity of stock that a enterprise nevertheless has available at the give up of a reporting duration. This consists of uncooked substances, work-in-method, and completed goods stock. The quantity of last inventory may be ascertained with a physical rely of the inventory. It can also be decided with the aid of the use of a perpetual inventory device and cycle counting to always regulate inventory information to reach at ending balances.
Closing Stock is an asset. In Inventory Account, it's miles underneath debit. In buying and selling Account, it's far beneath credit score. Because, it's far nonetheless no longer traded.
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Question 21. Explain Me When Should Reorders Be Placed?
Times for reordering items range dependent on the manipulate system you operate and its lead time. In fixed order quantities reorders ought to be located when the protection inventory is reached. In constant period structures the reordering is carried out at set time periods. In simply in time structures reordering is based totally on matching the call for with supply. For just in time a near watch on stock stages is wanted so that reorders are positioned earlier than items are out of stock.
Question 22. Explain Me What If There Is No Savings Or The Models Produce Even Results?
If there may be no financial savings a mistakes in the calculations may also have took place or the version does no longer healthy your case. For times were the full stocking fees are even you may use either order amount.
Question 23. Explain Why Is Procurement Considered Such An Important Part Of Inventory Control?
Procurement is the backbone of stock control. Inventory experts must create and maintain liaison with carriers and suppliers, and clients to make certain that substances are acquired in a timely way and that there are no shortages when the need arises.
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Question 24. Tell Me What Are The Important Considerations In Inventory Control?
For inventory manage to paintings at its excellent a shop must don't forget the costs of acquisition, sporting, ordering, and inventory-out. The shop ought to additionally study its reordering machine, its budgeting for inventory, insurance and forecasted call for.
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Question 25. Explain Me Is The Optimal Order Or Production Frequency Calculated On A Regular Basis As Part Of A Continuous Improvement Process?
Once you have reduced inventories, you will must placed new strategies in place to decrease them even more over time. We use an analytical tool that highlights the largest levers for continually decreasing stock.
For instance, rather than running to enhance sales forecast accuracy from 70 percent to simply 75 percent, organising a crew this is targeted on decreasing lead instances from Asian providers might also have greater effect.
Question 26. Explain What Is Weighted Average Cost?
A weighted inventory average determines the common cost of all inventory items primarily based at the stock objects' individual value basis and the quantity of each item held in stock.
When a enterprise purchases items for stock, the enterprise may pay exclusive charges for the stock items. This fee differential can observe to both distinctive stock objects and the identical stock items purchased at specific instances.
The average cost is computed by way of dividing the overall price of goods available for sale by means of the total units available for sale. This gives a weighted-average unit fee this is implemented to the devices inside the finishing inventory.
Weighted Average Unit Cost = Total Cost of Inventory / Total Units in Inventory
Lets say, we purchase item A for 10 AED. We have 10 qty of Item A.
Therefore, total cost of Item A is 10 x 10 = 100 AED.
In that we offered 3 objects. 7 qty left in inventory. Total value of those 7 items = 7 x 10 = 70 AED.
After 3 months, object A price is reduced to 8 AED. And then we bought 10 extra for eight AED.
Therefore, overall cost = eight x 10 = eighty AED.
Now, we've 7 objects sold for 10 AED and 10 items offered for 8 AED.
Total 17 gadgets.
Therefore general value = 70 AED + eighty AED = a hundred and fifty AED.
Now, while we calculate the weighted common cost of the 17 objects which can be to be sold = 150 AED/17 = 8.Eighty two AED.
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Question 27. Do You Know Who Decides Key Inventory-associated Policy Such As Striking The Right Balance Between Customer Service And Cost-powerful Product Inventory Levels?
Many selections approximately stock degrees are strategically important. So instead of relying entirely on the deliver enterprise to determine, executives need to have a first-rate say in the fundamental issues that impact inventory control-the whole thing from determining the proper breadth and complexity of product services to most useful plant and distribution footprints.
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Question 28. What Are Finished Goods?
Inventories are the ones completely synthetic merchandise which might be ready on the market. Stocks of uncooked materials and paintings-in-method facilitate manufacturing, even as inventory of completed goods is required for clean marketing operations. Thus, inventories serve as a link between the production and consumption of goods.
Question 29. Tell Us Do You Apply The Above Practices To All Parts Of Your Inventory (completed Goods, Raw Material, Works In Process And Spare Parts) And In All Organizational Entities?
One of the maximum common mistakes made by means of supply businesses is looking at only a small subset of all inventory-the completed goods sitting in important warehouses-despite the fact that uncooked substances, works in manner, spare components and even goods in retail stores can make up 50 percent of the total. As a result, they miss capability savings. An organizational map of all inventories will help better prioritize methods to reduce inventories. And all the inventory techniques we have discussed observe.
Question 30. Do You Know What Is Cogs (fee Of Goods Sold) Formula?
For producers, “cost of products bought” (COGS) is the cost of buying raw substances and production finished products.
For shops, it's the value of obtaining or buying the goods offered to clients.
Opening Stock (Beginning inventory) + Purchases – Closing Stock (End Inventory) = COGS
If the organisation is in a provider enterprise, COGS is the value of the provider it offers.
COGS can assist corporations training session how plenty they ought to fee for his or her services and products, and the level of income they need to sustain with a view to make a income.
The price paid for merchandise is particularly critical to retailers, as it's far often their best location of expenditure. But all businesses can gain from an analysis of COGS, as it could spotlight ways of enhancing performance and slicing expenditure.
Question 31. Tell Me Do You Have Regular Visibility Into Excess And Obsolete Stock, And Is It Linked To Targeted Action Plans To Sell Off Or Reduce This Inventory?
Typically, excess and obsolete inventory stems from useless income forecasting, planning or using a commercial enterprise model that fails to aspect in product complexity and lifestyles cycles successfully. Inventory leaders set up methods to decide why excesses are being created after which broaden a plan of action to sell it off. In some times, the fear of the write-off has brought about a huge buildup through the years of obsolete stock.
Question 32. Tell Me Are You Able To Break Down Your Operating Inventory Into The Three Major Categories When Reporting Levels-protection, Replenishment And Excess Or Obsolete Stock?
This breakdown makes it easier to make sound choices approximately suitable ranges for every of those three regions. It allows determine the minimal safety inventory needed to provide an coverage policy against supply chain issues both from production glitches or distribution uncertainties so that customers get what they ordered.
It's useful for pinpointing the amount of stock required to fill up deliveries each weeks. And it enables companies discover approaches to avoid a backlog of extra or obsolete stock.
Question 33. Explain Me What Should Be Recorded In A Physical Count Of Inventory?
When carrying out a physical stock the type, location and number in stock of a terrific ought to be recorded.
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Question 34. Explain Me What Are The Types Of Reordering Systems That Can Be Used In Inventory Control?
There are numerous sorts of reordering systems, on this module we discussed three. The constant order quantity uses constant portions of goods ordered at numerous order points to fill up stock.
The constant order duration use fixed times of reorder with various order quantities to top off inventory to preset degrees. The very last device, simply in time uses a constant flow of products to fit the level of call for.
Question 35. Do You Know How Is Gr/ir Account Related To Inventory?
If you are concerned with inventory, then you need the GR/IR account (Inventory Account) when the IR is published.
If you aren't concerned about stock, then the device does now not need the GR/IR account when the IR is posted, the gadget needs a G/L rather than the GR/IR account.
Question 36. Tell Me How To Determine The Frequency For Ordering And Inventory Production If It's Not Set Solely By Factories Or The Supply Organization?
Ideally, there are two factors: corporations ought to take into account calculations that decrease the overall cost including inventory and changeover costs. They additionally should base frequency on negotiations among the one of a kind events involved and component in upcoming occasions together with promotions and uncertainties like bad climate.
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Question 37. Explain Me Do I Need To Recompute Stocking Costs For The Eoq Level?
Yes, so that it will examine inventory expenses when using the EOQ model you must compute the fees for each the original stage and the EOQ stage of order quantities.
Question 38. Tell Us What Makes A Good Forecasting Model?
A suitable forecast model can have reasonable costs. The accuracy of its forecasts will permit accurate choice making. The version will have adequate records available for its use and a relevant time span. The model eventually can have a low interference stage.
Question 39. How To Determine The Numbers To Use In The Eoq Formula?
To determine which numbers to use you must search for the following objects. The wide variety of gadgets in keeping with order is the amount(Q). The quantity of items that may be bought is D. D may be the forecast demand for that specific desirable. The cost of setting the order is used for S. The final wide variety to locate is the wearing fee(C) which is the fee of the item to be held in inventory.
Question forty. Explain How Can The Value Of Inventory Be Determined?
The cost may be located the usage of 4 methods in inventory manage. The first is the specific value in which each item's price is added collectively for the stock's value. A 2nd approach is to apply the weighted average of the expenses for a duration to decide value. A 0.33 technique is first in, first out. In this technique value is measured the use of the present day costs of goods even as running closer to the start of the period till all goods in stock are valued. The very last method is final in, first out. In this method the charges of gods at the beginning of the duration are used to determine the stock's cost similar to FIFO.
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Question forty one. Tell Me What Is Shrinkage Calculation In Inventory?
In financial accounting, the term inventory shrinkage is the lack of products between point of manufacture or purchase from supplier and point of sale. The time period decrease pertains to the difference in the quantity of margin or earnings a retailer can gain. If the amount of shrink is massive, then profits cross down which ends up in extended expenses to the purchaser to fulfill the needs of the retailer.
In retail terms, shrinkage refers to a company's percentage loss as a result of harm, product expiration and robbery of unsold products. Retail shrinkage can manifest everywhere along the production and sale chain, which includes on the manufacturing facility, in transit or at the retail location.
You can calculate retail shrinkage by using dividing the cost of products misplaced to shrinkage through the total cost of goods which might be speculated to be in the inventory.
( Total value of the goods which you are supposed to have to your stock - Total fee of the goods that is physically stocked for your stock )
/ Total value of the goods that you are alleged to have on your inventory.
I.E. Shrinkage = (Book inventory - Actual Stock) / Book Stock
= Total Value of products misplaced / Total fee of the products that you are alleged to have for your stock
Question 42. Explain Me What Is Total Stocking Cost?
Total stocking value is the fee to the shop of maintaining a good in its stock. The stocking price consists of the sporting value times 1/2 the quantity in inventory and the order of entirety value instances demand divided with the aid of the quantity. In its mathematical shape the fee is represented via TSC=(Q/2)C + (D/Q)S.
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Question 43. What Is Work-in-technique?
Inventories are semi-manufactured merchandise. They constitute products that need extra work before they end up finished product on the market.
Question 44. Do You Know What Is The Importance Of Eoq?
The EOQ level is the factor at which stocking fees are at their lowest point for a given object.