Inventory Management Flashcards

A pharmacy's turnover rate for a medication is 12 per year. What does this indicate?

Answer: The entire stock of that drug is sold and replaced approximately once per month

A turnover rate of 12 means the inventory for that item is completely sold and restocked about once per month (every 30 days).

Which of the following is required when returning Schedule II controlled substances to a DEA-registered reverse distributor?

Answer: DEA Form 222

DEA Form 222 (or CSOS) is required when transferring Schedule II controlled substances to a reverse distributor for destruction.

What is 'shrinkage' in pharmacy inventory management?

Answer: Unexplained loss of inventory due to theft, diversion, or error

Shrinkage refers to unexplained inventory losses that may result from theft, diversion, administrative errors, or damage.

A pharmacy wants to reduce carrying costs. Which strategy is MOST effective?

Answer: Implement just-in-time (JIT) ordering

Just-in-time ordering minimizes inventory held on hand, directly reducing storage, insurance, and obsolescence costs.

Which form must be completed within 1 business day when a pharmacy discovers a theft or significant loss of Schedule II controlled substances?

Answer: DEA Form 106

DEA Form 106 must be filed within 1 business day of discovering a theft or significant loss of controlled substances.

What is 'dead stock' in a pharmacy?

Answer: Inventory that has not moved in an extended period and is unlikely to sell

Dead stock refers to inventory that has not been dispensed or sold in a long time and ties up capital without generating revenue.

A pharmacy orders 500 units of Drug X per order and places orders 6 times per year. What is the average inventory assuming a zero safety stock?

Answer: 250 units

Average inventory = Order quantity / 2, so 500 / 2 = 250 units when safety stock is zero.