This concise introduction helps B.Pharm students master purchase procedure and inventory control techniques essential for safe, compliant pharmaceutical supply chain management. It explains procurement steps—need identification, vendor selection, tendering, purchase orders, goods receipt, and quality inspection—alongside inventory methods like EOQ, ABC analysis, FIFO/FEFO, safety stock, reorder point, batch traceability, cold-chain handling and expiry management. Emphasis is on regulatory compliance, Good Manufacturing Practices (GMP), documentation, stock valuation, minimising stockouts and reducing obsolescence. Practical store-keeping concepts such as MOQ, lead time calculation, cycle counting and electronic record-keeping for pharmacy stores are included. Now let’s test your knowledge with 30 MCQs on this topic.
Q1. What is the primary objective of a standardized purchase procedure in a pharmacy?
- To ensure timely, cost-effective procurement of quality medicines and compliance with regulations
- To allow staff to order any product without documentation
- To maximize inventory levels regardless of demand
- To replace stores personnel with automated systems immediately
Correct Answer: To ensure timely, cost-effective procurement of quality medicines and compliance with regulations
Q2. What is the first formal step in the purchase procedure for a pharmacy store?
- Issuance of a purchase order to the supplier
- Preparation of a goods receipt note (GRN)
- Identification of need through a purchase requisition
- Payment to the supplier
Correct Answer: Identification of need through a purchase requisition
Q3. Which criteria are most critical when selecting a pharmaceutical supplier?
- Lowest price only
- Proximity to the pharmacy only
- Quality standards (GMP), reliability of delivery, price and regulatory compliance
- Supplier advertising and branding
Correct Answer: Quality standards (GMP), reliability of delivery, price and regulatory compliance
Q4. Which type of tender allows any qualified supplier to submit a bid?
- Single-source procurement
- Limited tender
- Open tender (public tender)
- Direct purchase without tender
Correct Answer: Open tender (public tender)
Q5. Which information is essential to include on a purchase order for medicines?
- Brand logo and marketing claims only
- Item description, strength, batch requirements, quantity, unit price and delivery date
- Only the supplier’s bank details
- Internal staff vacation schedules
Correct Answer: Item description, strength, batch requirements, quantity, unit price and delivery date
Q6. What does GRN stand for in pharmaceutical procurement?
- Good Regulatory Notice
- Goods Received Note
- General Receipt Number
- Guaranteed Returned Number
Correct Answer: Goods Received Note
Q7. Which inventory rotation method is most appropriate for medicines with varying expiry dates?
- Last In First Out (LIFO)
- Random stock issue
- First Expired First Out (FEFO)
- Highest cost first
Correct Answer: First Expired First Out (FEFO)
Q8. On what basis does ABC analysis classify inventory?
- Alphabetical order of drug names
- Annual consumption value (cost × usage)
- Shelf location in the store
- Color coding by manufacturer
Correct Answer: Annual consumption value (cost × usage)
Q9. What is the correct EOQ (Economic Order Quantity) formula used in inventory control?
- EOQ = (D × H) / (2 × S)
- EOQ = square root of (2DS / H)
- EOQ = D / (S + H)
- EOQ = S × H × D
Correct Answer: EOQ = square root of (2DS / H)
Q10. How is the Reorder Point (ROP) generally calculated?
- ROP = Safety stock only
- ROP = Average demand during lead time + Safety stock
- ROP = Annual demand divided by 12
- ROP = EOQ × Lead time
Correct Answer: ROP = Average demand during lead time + Safety stock
Q11. What is the primary purpose of maintaining safety stock in pharmacy inventory?
- To increase holding costs intentionally
- To buffer against variability in demand or lead time and prevent stockouts
- To make space management more difficult
- To guarantee obsolescence of old stock
Correct Answer: To buffer against variability in demand or lead time and prevent stockouts
Q12. What does lead time mean in procurement?
- Time taken to dispense a medicine to a patient
- Time from placing an order to receipt of goods in store
- Time taken to manufacture a drug in the lab
- Time taken for invoice payment processing
Correct Answer: Time from placing an order to receipt of goods in store
Q13. Which record is used to track all receipts, issues and balances in a pharmacy store?
- Patient prescription register
- Sales promotion ledger
- Stores ledger or bin card
- Employee attendance sheet
Correct Answer: Stores ledger or bin card
Q14. How does Good Manufacturing Practices (GMP) relate to supplier evaluation?
- GMP is irrelevant to supplier evaluation
- GMP ensures suppliers follow quality systems and regulatory compliance, important for selection
- GMP only applies to clinical trials
- GMP replaces the need for quality checks on received goods
Correct Answer: GMP ensures suppliers follow quality systems and regulatory compliance, important for selection
Q15. Which products most critically require strict cold-chain inventory control?
- Topical ointments stored at room temperature
- Vaccines, biologicals and temperature-sensitive injectable drugs
- Bulk chemicals used in manufacturing only
- Tablets with long shelf life
Correct Answer: Vaccines, biologicals and temperature-sensitive injectable drugs
Q16. What does consignment stock arrangement mean?
- Pharmacy owns stock immediately upon delivery
- Supplier retains ownership until stock is consumed or sold
- Stock is donated free of charge
- Stock must be paid for before delivery
Correct Answer: Supplier retains ownership until stock is consumed or sold
Q17. What is Minimum Order Quantity (MOQ)?
- The smallest quantity a supplier is willing to supply in one order
- The average daily consumption of a product
- The maximum storage capacity of a shelf
- The reorder point multiplied by lead time
Correct Answer: The smallest quantity a supplier is willing to supply in one order
Q18. What is a main advantage of cycle counting in inventory control?
- It replaces all electronic records with manual counts
- It avoids the need for any reconciliation
- It allows regular checking of selected items and reduces the need for full physical inventory
- It increases stock discrepancies intentionally
Correct Answer: It allows regular checking of selected items and reduces the need for full physical inventory
Q19. Why is batch traceability important in pharmaceutical inventory?
- To track shelf location for merchandising only
- To enable selective recall and investigation in case of quality defects or contamination
- To increase paperwork without benefit
- To prevent expiry tracking
Correct Answer: To enable selective recall and investigation in case of quality defects or contamination
Q20. What is the correct procedure for handling expired medicines in a pharmacy?
- Return them to the sales shelf after discounting
- Dispose of them without documentation
- Quarantine, document and dispose according to regulatory guidelines with authorised destruction records
- Mix expired stock with fresh stock to dilute expiry effects
Correct Answer: Quarantine, document and dispose according to regulatory guidelines with authorised destruction records
Q21. Which inventory valuation method is most suitable and commonly used in pharmacies to reflect physical stock flow?
- Last In First Out (LIFO)
- First In First Out (FIFO)
- Highest cost first
- Random weighted allocation
Correct Answer: First In First Out (FIFO)
Q22. When goods fail quality control upon receipt, what is the immediate action?
- Place them on the sales shelf immediately
- Quarantine the goods, document the non-conformance and notify the supplier for corrective action
- Destroy them without notifying anyone
- Reduce their price and sell quickly
Correct Answer: Quarantine the goods, document the non-conformance and notify the supplier for corrective action
Q23. What does three-way matching in purchase payment control involve?
- Matching patient record, prescription and shelf label
- Matching purchase order, goods received note and supplier invoice before payment
- Matching supplier brochure, catalogue page and payment voucher
- Matching employee signatures three times
Correct Answer: Matching purchase order, goods received note and supplier invoice before payment
Q24. Which of the following is a key consequence of frequent stockouts in a pharmacy?
- Reduced patient trust, interrupted therapy and potential harm to public health
- Automatic improvement in inventory turnover only
- Guaranteed increase in profit
- Lower regulatory scrutiny
Correct Answer: Reduced patient trust, interrupted therapy and potential harm to public health
Q25. Which statement best describes Just-In-Time (JIT) inventory in pharmacy practice?
- Maintain maximum stock levels at all times
- Minimal inventory levels with frequent, reliable deliveries to reduce holding costs
- Order once a year only
- Ignore lead time when ordering
Correct Answer: Minimal inventory levels with frequent, reliable deliveries to reduce holding costs
Q26. What is Vendor Managed Inventory (VMI)?
- The buyer manages all supplier warehouses directly
- A system where the vendor monitors stock levels and replenishes inventory as agreed
- A method to avoid supplier relationships altogether
- A government-only stocking programme
Correct Answer: A system where the vendor monitors stock levels and replenishes inventory as agreed
Q27. Which activity is covered by pharmacovigilance and is relevant to procurement decisions?
- Assessing post-marketing safety reports which may affect selection of suppliers or products
- Determining warehouse layout only
- Calculating EOQ exclusively
- Scheduling staff holidays
Correct Answer: Assessing post-marketing safety reports which may affect selection of suppliers or products
Q28. What does VED analysis classify inventory by?
- Value only
- Criticality to patient care: Vital, Essential and Desirable
- Expiry date only
- Manufacturer’s country of origin
Correct Answer: Criticality to patient care: Vital, Essential and Desirable
Q29. Which document issued by the buyer legally authorises the supplier to deliver goods?
- Proforma invoice from the supplier
- Purchase order issued by the buyer
- Goods return note
- Employee payslip
Correct Answer: Purchase order issued by the buyer
Q30. If annual demand (D) = 1200 units, ordering cost (S) = $50 per order and holding cost (H) = $2 per unit per year, what is the approximate EOQ?
- Approximately 245 units
- Approximately 120 units
- Approximately 300 units
- Approximately 50 units
Correct Answer: Approximately 245 units
I am a Registered Pharmacist under the Pharmacy Act, 1948, and the founder of PharmacyFreak.com. I hold a Bachelor of Pharmacy degree from Rungta College of Pharmaceutical Science and Research. With a strong academic foundation and practical knowledge, I am committed to providing accurate, easy-to-understand content to support pharmacy students and professionals. My aim is to make complex pharmaceutical concepts accessible and useful for real-world application.
Mail- Sachin@pharmacyfreak.com