Inventory and material management MCQs With Answer

Inventory and material management MCQs With Answer

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Inventory and Material Management MCQs With Answer help M. Pharm students connect core industrial pharmacy concepts with real-world operations. In Modern Pharmaceutics (MPH 103T), inventory decisions directly influence GMP compliance, product quality, cost, and service levels across procurement, warehousing, production, and distribution. This quiz covers advanced tools and techniques such as ABC/VED/FSN/HML analysis, EOQ/EBQ, JIT/Kanban, FEFO, safety stock, reorder point, MRP/DRP, perpetual inventory, vendor evaluation, and cold-chain controls. The questions are crafted to test both conceptual clarity and application—spanning cost trade-offs, risk management, documentation, and regulatory expectations—preparing you for evidence-based decisions in pharmaceutical manufacturing and supply chains.

Q1. What is the primary objective of inventory management in pharmaceutical manufacturing?

  • Minimize purchase price of all items
  • Ensure uninterrupted supply at minimum total cost while meeting GMP and quality requirements
  • Maximize warehouse occupancy
  • Eliminate all safety stock to reduce holding cost

Correct Answer: Ensure uninterrupted supply at minimum total cost while meeting GMP and quality requirements

Q2. Which set of assumptions is fundamental to the classical Economic Order Quantity (EOQ) model?

  • Variable demand, price breaks, partial backorders
  • Constant demand and lead time, no stockouts, instantaneous replenishment, no quantity discounts
  • Seasonal demand, stochastic lead time, partial deliveries
  • Batch production with finite production rate

Correct Answer: Constant demand and lead time, no stockouts, instantaneous replenishment, no quantity discounts

Q3. A raw material has annual demand of 24,000 units, ordering cost ₹800/order, and carrying cost is 20% of ₹50/unit. What is the EOQ?

  • 1,400 units
  • 1,960 units
  • 2,400 units
  • 3,162 units

Correct Answer: 1,960 units

Q4. Daily demand is 200 units, lead time is 6 days, and safety stock is 300 units. What is the Reorder Point (ROP)?

  • 900 units
  • 1,200 units
  • 1,500 units
  • 1,800 units

Correct Answer: 1,500 units

Q5. ABC analysis primarily classifies inventory items based on:

  • Unit price only
  • Lead time variability
  • Annual consumption value (unit cost × annual usage)
  • Shelf-life remaining

Correct Answer: Annual consumption value (unit cost × annual usage)

Q6. VED analysis in pharmaceuticals is most useful for classifying items based on:

  • Purchase budget constraints
  • Criticality to patient safety and production continuity
  • Supplier’s geographical location
  • Inventory carrying cost

Correct Answer: Criticality to patient safety and production continuity

Q7. For expiry-sensitive pharmaceutical materials, which issue policy is preferred to minimize wastage?

  • FIFO
  • LIFO
  • FEFO
  • HIFO

Correct Answer: FEFO

Q8. In a GMP-compliant perpetual inventory system, which practice best maintains stock accuracy?

  • Annual physical count only
  • Continuous stock records with cycle counting and reconciliation
  • Informal spreadsheets maintained by operators
  • Counting only high-value items

Correct Answer: Continuous stock records with cycle counting and reconciliation

Q9. Which statement best describes Just-In-Time (JIT) in the pharmaceutical context?

  • Always eliminates safety stock without risk
  • Reduces inventory but requires highly reliable, qualified suppliers and stable, validated lead times
  • Is incompatible with GMP
  • Guarantees zero stockouts regardless of variability

Correct Answer: Reduces inventory but requires highly reliable, qualified suppliers and stable, validated lead times

Q10. Which factor most likely increases safety stock requirements?

  • Decreased demand variability
  • Shorter, stable supplier lead times
  • Higher desired service level
  • Perfect demand forecast

Correct Answer: Higher desired service level

Q11. A two-bin system on a packaging line is an example of:

  • A push scheduling method
  • A visual Kanban signal for pull-based replenishment
  • A consignment stock arrangement
  • An MRP explosion

Correct Answer: A visual Kanban signal for pull-based replenishment

Q12. Material Requirements Planning (MRP) is primarily used to:

  • Plan finished goods distribution to depots
  • Translate master production schedule and BOM into time-phased purchase/production orders
  • Optimize transportation routes
  • Determine marketing demand forecasts

Correct Answer: Translate master production schedule and BOM into time-phased purchase/production orders

Q13. Under GMP warehousing, what is the correct status until QC approval of incoming raw materials?

  • Released to production immediately
  • Quarantined with identification labels until approved or rejected
  • Mixed with existing lots to save space
  • Dispensed before sampling to avoid delays

Correct Answer: Quarantined with identification labels until approved or rejected

Q14. HML analysis categorizes items chiefly by:

  • Consumption rate
  • Criticality
  • Unit price (High–Medium–Low) to set authorization and control levels
  • Lead time

Correct Answer: Unit price (High–Medium–Low) to set authorization and control levels

Q15. FSN analysis classifies items as Fast, Slow, or Non-moving based on:

  • Supplier quality rating
  • Frequency of issues/withdrawals over a period
  • Item weight
  • Packaging type

Correct Answer: Frequency of issues/withdrawals over a period

Q16. For cold-chain pharmaceuticals, which control is essential for compliant inventory management?

  • Ambient storage with weekly temperature checks
  • Validated cold rooms with continuous temperature monitoring and excursion management
  • Ice packs without monitoring
  • Supplier assurance only, no in-house monitoring

Correct Answer: Validated cold rooms with continuous temperature monitoring and excursion management

Q17. In vendor evaluation for GMP materials, which composite metric is most appropriate?

  • Number of marketing emails received
  • On-Time In-Full (OTIF) with CoA compliance and audit status
  • Lowest quoted price only
  • Geographic proximity only

Correct Answer: On-Time In-Full (OTIF) with CoA compliance and audit status

Q18. The inventory turnover ratio is typically calculated as:

  • Average inventory ÷ Cost of Goods Sold
  • Cost of Goods Sold ÷ Average inventory
  • Sales ÷ Ending inventory
  • Opening inventory ÷ Purchases

Correct Answer: Cost of Goods Sold ÷ Average inventory

Q19. What is a key advantage of consignment inventory for a pharma manufacturer?

  • Ownership and carrying cost transfer to buyer immediately
  • Ownership remains with supplier until consumption, reducing buyer’s carrying cost
  • Faster expiry of materials
  • Eliminates need for QC release

Correct Answer: Ownership remains with supplier until consumption, reducing buyer’s carrying cost

Q20. Economic Batch Quantity (EBQ) differs from EOQ mainly because EBQ:

  • Ignores setup costs
  • Assumes infinite production rate
  • Accounts for finite production rate, producing and consuming simultaneously
  • Eliminates holding cost

Correct Answer: Accounts for finite production rate, producing and consuming simultaneously

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