1. Which of the following is the first step in the purchasing procedure?
a) Receiving materials
b) Issuing purchase orders
c) Identifying the need for materials
d) Supplier evaluation
Answer: c) Identifying the need for materials
2. The primary purpose of supplier evaluation is to:
a) Find the cheapest supplier
b) Ensure the quality and reliability of the supplier
c) Make the purchase faster
d) Select the most local supplier
Answer: b) Ensure the quality and reliability of the supplier
3. A Purchase Order (PO) is used to:
a) Request payment for materials
b) Authorize the purchase of materials
c) Confirm the delivery of materials
d) Record supplier payments
Answer: b) Authorize the purchase of materials
4. Which document is typically issued to confirm the agreement on pricing and terms between the buyer and supplier?
a) Purchase requisition
b) Purchase order
c) Goods receipt note
d) Supplier invoice
Answer: b) Purchase order
5. Which of the following is NOT a common method of purchasing?
a) Open tendering
b) Closed tendering
c) Consignment buying
d) Random buying
Answer: d) Random buying
6. The main function of stores management is to:
a) Increase supplier orders
b) Maintain inventory and ensure materials are available when needed
c) Make payments to suppliers
d) Create new products
Answer: b) Maintain inventory and ensure materials are available when needed
7. The process of storing materials in the correct location, in an organized manner, is known as:
a) Material handling
b) Stock rotation
c) Stocktaking
d) Stores layout planning
Answer: d) Stores layout planning
8. The FIFO (First In, First Out) inventory method is primarily used to:
a) Ensure the oldest items are used first
b) Maintain cost accuracy
c) Prevent overstocking
d) Improve supplier relations
Answer: a) Ensure the oldest items are used first
9. Which of the following is a key objective of inventory control?
a) Maximizing stock levels
b) Reducing the carrying cost of inventory
c) Increasing order frequency
d) Minimizing the quantity of materials ordered
Answer: b) Reducing the carrying cost of inventory
10. The Economic Order Quantity (EOQ) model is used to:
a) Maximize the order quantity
b) Minimize the total cost of inventory
c) Increase the frequency of orders
d) Determine the total inventory value
Answer: b) Minimize the total cost of inventory
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