Purchasing & Inventory Management Self-Assessment
Instructions:  Write the letter of the answer that best fits in the box at right.	Answer
1. The best method of negotiating with vendors is to obtain: a.  The lowest price b. The highest quality c.  The fastest delivery d. The best combination of price, quality and predictable delivery, but not necessarily the lowest price or the fastest delivery.
2. The best method for applying replenishment methods to an inventory of large size is to consider: a.  The most expensive parts first, to gain the most savings b. The least expensive parts first, because unmanaged they take up the most time c.  Parts in the 80/20 rule order of income first d. The parts with the longest lead times first
3. After working to reduce your company’s unnecessary inventory, the best scorecard to measure success is: a.  Inventory turns b. Inventory return on investment c.  Inventory cycle counts d. Inventory adjustments
4. In order to best calculate economic order point (the inventory count signaling that it is time to purchase) one must know: a.  Supplier lead time b. Up-to-date costs of suppliers c.  Historical demand d. Predicted demand e.  a. and d.
5. Not considering the administrative cost of purchasing and receiving, the most economical quantity to purchase is: a.  Daily demand b. Daily demand times lead time c.  The most aggressive quantity discount offered by the vendor d. Monthly demand