Inventory management interview questions and answers pdf

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1. What is cycle counting and when would you use it?

Tests the candidate’s knowledge of data analysis methods.

2. Can you explain your method for ensuring all inventory meet company standards?

Highlights the candidate’s experience in an inventory management role.

3. What does EOQ mean?

Reveals the candidate’s educational background.

4. How would you handle an employee who violates company policy?

Tests the candidate’s leadership and communication skills.

5. You are low on supplies when a client places an urgent order. How would you respond?

Demonstrates the candidate’s problem-solving abilities.

Checkout Vskills Interview questions with answers in Store and Inventory Manager to prepare for your next job role. The questions are submitted by professionals to help you to prepare for the Interview.    

Q.1 How do you calculate the inventory value?

The inventory value is calculated by following specific valuation method and as per the company's policy. There are three methods for inventory valuation: FIFO (First In, First Out), LIFO (Last In, First Out), and WAC (Weighted Average Cost). In FIFO, you assume that the first items purchased are the first to leave the warehouse. In other words, whenever you make a sale, under FIFO, the items will be subtracted from the first list of products which entered your store or warehouse. In LIFO, you make the opposite assumption: that the last items that enter your store are the first ones to leave. The WAC method uses the item’s average cost throughout the year. The average cost per unit is calculated by dividing the total cost by the total number of units purchased during the year.

Q.2 When would you use cycle counting?

Cycle counting is a method of checks and balances to confirm physical inventory counts match with their inventory records. A full cycle count of all of your inventory should be done at least once a quarter. However, many warehouse operations do daily cycle counts for strategic sections to avoid counting large amounts at the end of the quarter. Physical counts should be done at least once per year.

Q.3 How is EOQ important and how do you use it?

Economic order quantity is important because it helps companies manage their inventory efficiently. Without inventory management techniques such as this, companies will tend to hold too much inventory during periods of low demand, while also holding too little inventory in periods of high demand. EOQ formula steps are to: determine the demand in units, determine the order cost (incremental cost to process and order), determine the holding cost (incremental cost to hold one unit in inventory). multiply the demand by 2, then multiply the result by the order cost, divide the result by the holding cost and calculate the square root of the result to obtain EOQ.

Q.4 Can you explain ABC analysis of inventory control?

ABC analysis is a method in which inventory is divided into three categories, i.e. A, B, and C in descending value. The items in the A category have the highest value, B category items are of lower value than A, and C category items have the lowest value. Inventory control and management are critical for a business.

Q.5 What is Material Requirements Planning (MRP) system?

A Material Requirements Planning (MRP) system is a planning and decision-making tool used in the production process which analyses current inventory levels vs. production capacity and the need to manufacture goods, based on forecasts. MRP schedules production as per bills of materials while minimizing inventory.

Q.6 What does COGS mean to our business?

Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. The cost of goods sold for a particular service or product refers to the direct costs associated with its production, including labor necessary to produce the product and materials for the product. Hence, an increase in the cost of goods sold can decrease the gross profit.

Q.7 How would you deal with an inventory error?

An inventory error affects two consecutive accounting periods, assuming that the error occurs in the first period and is corrected in the second period. If you incorrectly overstated an inventory purchase, debit your cash account by the amount of the overstatement and credit your inventory for the same amount. If there is an understatement of an inventory purchase, debit inventory in the amount of the understatement and credit cash for an equal amount.

Q.8 What is the inventory accuracy?

The inventory accuracy refers to all the discrepancies that exist between electronic records that represent the inventory and the physical state of the inventory.

Q.9 How do you ensure accuracy in a warehouse?

There are many ways to improve inventory accuracy by categorize Inventory Labelling, implementing Cycle Counting, assessing warehouse racking layout, minimize order picking mistakes and have real time tracking.

Q.10 In a full warehouse due to a scheduling error, no delivery trucks are collecting inventory from the warehouse until the next day. How will you manage additional shipments expected to arrive at the warehouse tonight?

At first, I will connect with the logistics manager and update them of the problem and ask if there were any available warehouses to divert the shipments to. If not, I would contact a member of the sales staff to see if any retail locations were available to take on additional inventory. If both of these options fail, I would communicate with vendors to recall the products back to their location until I had enough space to accommodate them.

Q.11 Which order picking strategy involves products being picked from defined areas in the warehouse?

Zone picking strategy involves products being picked from defined areas in the warehouse

Q.12 Which order picking strategy involves picker taking one order and travels through the warehouse either on foot with a cage or trolley or with a pallet or fork truck, collecting items until the whole order is picked?

Pick to order strategy involves picker taking one order and travels through the warehouse either on foot with a cage or trolley or with a pallet or fork truck, collecting items until the whole order is picked

Q.13 What are the characteristics to determine inventory levels?

Inventory levels can be found by calculating the lead time, order quantity and Reorder point .

Q.14 What does integrity mean to you?

Integrity to me is being honest and showing a consistent adherence to moral and ethical principles and values. It means being myself, and sticking to my values and principles, regardless of circumstances or expectations of other people.

Q.15 How do you define quality?

Quality can be defined as the features and characteristics of a product or service to satisfy given needs. It is a degree or grade of excellence.

Q.16 Which software do you have experience with to help eliminate errors in your work?

Error elimination is primary duty and I always manually check my work. I also use various software tools like Excel to monitor records. I also apply automated monitoring to double check for any anomalies in my work.

Q.17 Have you ever eliminated wasteful spending on a particular project for your company?

As a inventory manager I had multiple opportunities to apply my skills for removing wasteful spending in the company. I had to make important and tough decisions in the store department during implementing automation for various processes, and was able to save 15% by reducing redundancies.

Q.18 What has been your experience with IoT products in inventory management?

IoT expands to Internet of Things and it refers to applying computing devices which can connect to a network for data gathering, analysis and decision making. They have revolutionized inventory management as it provides automation in many manual processes. I have extensive experience in using IoT in inventory management and using it for analysis and decision making. It helps in improved utilization and maintenance.

Q.19 What are current inventory management technologies you dealt with?

I am having experience with various recent inventory management technologies which includes inventory analytics, Smart sensors, Cloud computing, Artificial intelligence and the internet of things (IoT)

Q.20 What do you think of most important role of a inventory manager?

As a inventory manager my focus is to provide the materials needed at any stage of production at optimum levels so as to fulfil the customer demand with least cost towards storage though maintaining optimum inventory levels. Adopting inventory management technologies which are more efficient and effective for the organization. Reducing costs without losing on quality or speed of production is the primary motto.

Q.21 How do you see yourself in next five year in inventory management?

I foresee a bright future as I will gain more skills and knowledge in the domain of inventory management by adding new technologies as needed by my organization for being competitive after considering the strengths, weaknesses, opportunities and threats of the organization.

Q.22 What is the impact of inventory management on the goals of a company?

Inventory management is an important function of the company which has both short term and long term impact on the organization. Inventory management function fulfils the need of company for material, at right time, place and cost. The long term impact is addition of efficiency and cost reduction with an effective Inventory management and short term impact is of not stopping production due to non-availability of material.

Q.23 Why do you want the Inventory manager job?

I want the Inventory manager job as I am passionate about making companies more efficient by using new technologies and take stock of present inventory technology portfolio to maximize their utility.

Q.24 How you manage subordinates in your inventory management team?

Supervising subordinates in my inventory management team is crucial and I focus on managing subordinate as per their role in the team and skill level they possess. I try to maintain a motivational environment so that the team work as a single unit in providing Inventory management services to the organization as per laid down KPIs (key performance indicators).

Q.25 What tasks are performed by a Inventory manager?

An Inventory management is responsible for management of the stores and inventory management function in the company which focuses on providing material to the company at right time, place and cost. Also storing optimum quantity at least cost to the company is the prime objective. Inventory management is focused on having an efficient and effective Inventory management in the company for achieving the organizational goals as per the specified KPIs (key performance indicators).

Q.26 Why you are suitable as Inventory manager?

As a Inventory manager, I am having extensive experience in inventory management along with requisite skills including: communication, problem solving and coping under pressure which is of importance for Inventory management role.

Q.27 Do you feel satisfied with your role as Inventory manager?

I feel satisfied as Inventory manager as I am able to provide my services for effective long term plan for inventory management and also manage efficiently and effectively the present Inventory in the organization.

Q.28 What are your strengths as a Inventory manager?

As a Inventory manager I am having extensive experience on the new Inventory management technologies as well as managing the present Inventory management technologies. I also have the requisite managerial skills for Inventory management role.

Q.29 How do you organize information and paper work involved in inventory management?

Inventory management involves lots of information in paper mode like invoice, receipts, etc. We mostly use electronic data to minimize paper work. Prioritization and proper document organization, helps organize information related to inventory management.

Q.30 Why do you want to work as Inventory manager at this company?

Working as Inventory manager at this company offers me more many avenues of growth and enhance my inventory management skills. Your company has been in the domain of manufacturing FMCG goods and hence offers opportunities for future growth in inventory management role. Also considering my education, skills and experience I see myself, more apt for the post.

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