Inventory Control & Warehousing Flashcards

Which inventory replenishment method triggers an order when stock falls to a predetermined minimum level?

Answer: Continuous review (reorder point) system

A continuous review system monitors inventory continuously and places an order when stock reaches the reorder point.

A warehouse uses 'zone picking' to fulfill orders. What is the primary benefit of this strategy?

Answer: Minimizes picker travel distance within assigned zones

Zone picking assigns pickers to specific areas, reducing travel time and increasing throughput.

What does the term 'safety stock' represent in inventory management?

Answer: Extra inventory held to buffer against demand or lead-time variability

Safety stock is buffer inventory maintained to protect against unexpected demand spikes or supply delays.

Which storage method maximizes vertical space utilization in a warehouse?

Answer: High-bay narrow-aisle racking

High-bay narrow-aisle racking uses vertical height and specialized lift trucks to maximize cubic storage capacity.

An ABC analysis categorizes inventory items primarily by:

Answer: Annual consumption value

ABC analysis ranks items by annual consumption value so high-value (A) items receive tighter control.

Which KPI measures the percentage of customer orders shipped complete and on time from available stock?

Answer: Order fill rate

Order fill rate (or perfect order rate) tracks how often orders are fulfilled completely and on time from stock on hand.

What is the main purpose of a slotting optimization program in a warehouse?

Answer: To assign SKUs to locations that minimize travel and improve ergonomics

Slotting optimization places fast-moving or heavy items in the most accessible locations to reduce pick time and injury risk.