Inventory Control & Warehousing Flashcards

In warehousing, what does 'cross-docking' primarily eliminate?

Answer: Storage time by transferring goods directly from inbound to outbound

Cross-docking moves products directly from receiving docks to outbound trailers with little or no storage time.

The economic order quantity (EOQ) model minimizes the total cost of:

Answer: Ordering and holding (carrying) costs

EOQ balances ordering costs (fixed per order) against holding costs (proportional to inventory level) to find the optimal order size.

A FIFO inventory rotation policy is most critical for which type of product?

Answer: Perishable food items with expiration dates

FIFO ensures the oldest stock is used first, preventing expiration and spoilage of time-sensitive goods.

Which document serves as the primary record of goods received into a warehouse from a supplier?

Answer: Goods receipt note (GRN)

A goods receipt note records details of items actually received, quantity, and condition, enabling three-way matching.

What is 'shrinkage' in the context of inventory control?

Answer: Inventory loss due to theft, damage, administrative error, or spoilage

Shrinkage is the difference between recorded inventory and physical inventory, caused by theft, damage, or data errors.

Which warehousing layout principle places fast-moving items closest to the shipping/receiving area?

Answer: Velocity-based slotting

Velocity-based slotting positions high-velocity items near dock doors to minimize picker travel and speed order fulfillment.

Cycle counting differs from an annual physical inventory primarily because cycle counting:

Answer: Counts subsets of inventory on a rotating basis throughout the year

Cycle counting spreads counting activity across the year, counting specific locations or SKUs regularly without halting operations.