Which of the following stock valuation methods is based on a cost estimate made before the part is purchased?

Inventory and logistics operations

Q1 Question

Many organisations hold safety stocks as part of their inventory. Which of the following is a reason for holding safety stocks?

Answers

(a) To improve stock holding levels
(b) To improve stock accuracy levels
(c) To cater for demand forecast errors
(d) To cater for a large storage capacity.

Q2 Question

Which of the following stock valuation methods is based on a cost estimate made before the part is purchased?

Answers

(a) Standard costing
(b) FIFO
(c) Average costing
(d) LIFO.

Q3 Question

When using the ABC approach to stock categorisation. Which of the following describes class C items?

Answers

(a) High value, high risk
(b) High value, low risk
(c) Low value, high risk
(d) Low value, low risk.