Inventory Management

Interview Questions

Inventory management involves overseeing the flow of goods from manufacturers to warehouses and eventually to retail shelves. It\'s crucial for maintaining optimal stock levels, reducing costs, and ensuring customer satisfaction.
Perpetual systems update inventory levels in real-time, while periodic systems only update periodically, often at the end of an accounting period.
The main goals are to optimize stock levels, minimize carrying costs, prevent stockouts, and enhance overall operational efficiency.
Common methods include FIFO (First In, First Out), LIFO (Last In, First Out), and Weighted Average. Each method has its implications on financial reporting and tax liabilities.
Safety stock acts as a buffer to prevent stockouts during unexpected demand spikes, while the reorder point is the inventory level at which a new order should be placed to replenish stock before running out.
ABC analysis categorizes inventory items into three groups (A, B, and C) based on their importance. A-items are high-value items, B-items are moderate, and C-items are low. This helps prioritize inventory control efforts.
EOQ is the optimal order quantity that minimizes total inventory costs. The formula is EOQ = sqrt((2 * Demand * Ordering Cost) / Carrying Cost).
Lead time is the time between placing an order and receiving it. Considering lead time demand helps in setting reorder points and safety stock levels to avoid stockouts during lead times.
JIT minimizes holding costs but increases the risk of stockouts. It requires efficient supply chains and precise demand forecasting to be effective.
Barcode systems enhance accuracy and efficiency in tracking inventory levels. They streamline processes such as order picking, reducing errors and improving overall productivity.

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