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Stock Management Exam

This document provides instructions and questions for a stock management exam. It is divided into 3 sections. Section 1 contains 11 compulsory multiple choice and short answer questions assessing key stock management terms, inventory types and costs, factors for inventory design, and calculations related to re-order levels, maximum stock levels, and economic order quantity. Section 2 contains 2 long answer questions from which students must choose 1. Section 3 contains 2 long answer questions from which students must choose 1. The questions assess concepts like inventory costs, reorder quantities, stock levels, and calculations to determine optimal order quantities that minimize total costs.

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Modeste Niyitegeka
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159 views4 pages

Stock Management Exam

This document provides instructions and questions for a stock management exam. It is divided into 3 sections. Section 1 contains 11 compulsory multiple choice and short answer questions assessing key stock management terms, inventory types and costs, factors for inventory design, and calculations related to re-order levels, maximum stock levels, and economic order quantity. Section 2 contains 2 long answer questions from which students must choose 1. Section 3 contains 2 long answer questions from which students must choose 1. The questions assess concepts like inventory costs, reorder quantities, stock levels, and calculations to determine optimal order quantities that minimize total costs.

Uploaded by

Modeste Niyitegeka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SCHOOL COMPREHENSIVE ASSESSMENT

ACADEMIC YEAR 2022-2023 /1ST TERM

EXAM TITLE: STOCK MANAGEMENT.

RTQF LEVEL: 4 IN BUSINESS.


TRADE: BUSINESS
DURATION: 3HOURS
INSTRUCTION TO CANDIDATES:

Section One: All questions are compulsory (55 Marks)


Section Two: Attempt any ONE questions out of three. (10 Marks)
Section Three: Attempt any ONE of the two questions (15Marks)
please, follow the order of sections and questions.

SECTION ONE: COMPULSORY QUESTIONS /55 Marks

Q1. Define the following terms as used in stock management: 5Marks.

a) Inventory
b) Stock layout
c) Carrying cost
d) Store ledger card.
e) Lead time.
Q2. a) State 3 main types of inventory 3Marks

B) Differentiate between store and stock as used in stock management.


2Marks.

Q 3. What are 5 factors to consider when designing the right

size of inventory? 5marks

Q 4. Differentiate between re-order level and re-order quantity. 5Marks.

Q 5. Differentiate between store taking and store keeping 5Marks


Q 6. How can you differentiate purchase order to purchase requisition?
5Marks.

Q7. Explain 3 types of inventory costs 5Marks.

Q 8. Explain shortly but concisely, types of inventory levels you know.5marks

Q 9. A) What is the meanings of economic order quantity? 1 Mark

B) answer true or false: 4Marks.

i) At economic order quantity, holding cost and ordering costs should be


equal.

ii) Maximum stock level is the inventory level below which inventory is not
allowed to fall below.

iii) The increase in closing stock can lead to the increase in sales.

iv) Just in time (JIT means states that company should order and receive
materials when they are actually needed.

Q 10. what are 5 factors to be considered when designing

stock layout? 5Marks.

Q 11.The following information is provided for material P25.

Maximum consumption, 7000 units per week

Minimum consumption, 5000 units per week

Reorder period/ lead time= 3-7 weeks

Reorder quantity: 40,000 units

Compute:

a. Reorder level
b. Maximum stock level
c. Minimum stock level
d. Average stock level 5 marks
SECTION TWO: CHOOSE ANY ONE (1) QUESTION /10Marks

Q12. Suppose that your company sells a product for which the annual
demand is 10,000 units. Holding costs are $1.00 per unit per year, and
costs for placing an order are $200 per order
(a) what are the number of deliveries required? 5 Marks
(b) What is the total annual cost of ordering and holding? 5Marks

Q13. A trading company has provided the following data about purchases
and sales of a commodity made during the year 2016.

Jan. 01: Beginning inventory; 1,000 units @ $16 per unit.


Feb. 15: Purchased; 1,800 units @ $18 per unit.
Apr. 15: Purchased; 1,000 units @ $20 per unit.
Jul. 10: Purchased; 2,000 units @ $22 per unit.
Oct. 20: Purchased; 1,500 units @ $24 per unit
According to a physical count, 1,300 units were found in inventory on
December 31, 2016. Keep in mind that the company makes sales beginning to
the opening inventory respectively.
1)The cost of inventory on December 31, 2016. 5Marks
2)The cost of goods sold for the year 2016. 5MARKS
Q14. Differentiate between centralized store to decentralized store, and give 5
advantages for each. 10Marks

SECTION THREE: CHOOSE ONLY ONE (1) QUESTION /15 Marks

Q15.The following information is provided for material B.

Maximum consumption: 1500 units per week.

Minimum consumption: 1,000 units per week

Re-order period or lead time: 4- 6 weeks


Re-order quantity: 8000 units
You are required to calculate:

a) Minimum stock level 8Marks


b) Maximum stock level 5Marks
c) Average stock level 2Marks

Q.16 A Company has an annual demand for product G of 10,000 units per
annum. The cost price per unit is RWF 500 and stockholding is40 % per annum
of the stock value. Delivery cost per batch is RWF 400.

a) calculate economic order quantity 5Marks

b) use information received in (a) above, and fill the table below. 10Marks

Batch No of Average Value of Stockholdin Delivery Total


size Q deliveries stock Q/2 average g cost cost cost
per year stock
……? ……? ………?…. ……?…… …….?..... …?..... ….?......
…..

GOOD LUCK!

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