Inventory management assists businesses in determining which and how much merchandise to order at what time. It keeps track of merchandise from purchase to sale. The technique identifies and responds to trends to guarantee that there is always enough stock to fulfill client orders and that a shortfall is announced.
Inventory becomes revenue after being sold. Inventory (although represented as an asset on the balance sheet) ties up cash before being sold. As a result, carrying too much inventory costs money and reduces cash flow.
1. How Do You Employ Cycle Counting In Inventory Management?
The process, of physically reviewing a small fraction of the overall inventory to ensure that the current inventory records are accurate and up to date is known as cycle counting. I utilized it in my prior inventory management system to guarantee we had updated data on the commodities and materials we commonly ordered.
2. What Is The Difference Between Opening And Closing Stock?
The Opening Stock is the stock accessible in your inventory account at the start of a reporting period or after a cycle count. Beginning Inventory is another name for it. As a result, there is an Opening Stock. Then a flurry of transactions takes place: items are bought and sold. Finally, Closing Stock is computed.
The amount of inventory a company still has on hand at the end of a reporting period is called its “closing stock.” It covers the stock for raw materials, work-in-progress, and finished goods. A physical stock count can be used to determine the amount of closing stock. It can be determined by employing a perpetual inventory system and cycle counting, to continuously change inventory records to arrive at ending balances. Closing Stock is a type of asset. It is a debit in the Inventory Account. It gets credited to the trading account since it has not yet been traded.
3. What Is The Definition Of Weighted Average Cost?
The average cost of all inventory items is obtained using a weighted inventory average that takes into account both the quantity of each item held in inventory and the individual cost basis of each item. When a company buys a stock, it may pay different prices for the items. This pricing difference can apply to both separate inventory items and the same inventory items purchased at various times.
The average cost is computed by dividing the total cost of available products by the total number of available units. It yields a weighted-average unit cost, which is then applied to the units in the final inventory. Total Inventory Cost / Total Units in Inventory = Weighted Average Unit Cost
4. What Is The Cost Of Goods Sold (COGS) Formula?
The “cost of goods sold” (COGS) for manufacturers is the cost of purchasing raw materials and making finished items. It is the cost of obtaining the things sold to clients by retailers. COGS = Opening Stock (Beginning Inventory) + Purchases – Closing Stock (End Inventory) If the business is in the service industry, COGS is the cost of the service. COGS can assist firms in determining how much to charge for their products, services, and the level of sales required to turn a profit.
The amount paid for goods is important for retailers because it is frequently their biggest area of spending. However, all firms can benefit from a COGS study because it can identify methods to improve efficiency and minimize costs.
5. What Is Your Method For Developing A Requirements Forecast?
For forecasting needs, I analyze recent ordering data to identify and track patterns, to guarantee that my data are as precise as possible, I prefer to focus on short-term trends. I integrate this with sales projections to develop a purchasing estimates profile and forecast future inventory requirements.
6. What Is Inventory Shrinkage Calculation?
Inventory shrinkage is defined in financial accounting as the loss of products between the point of manufacture or purchase from a supplier and the point of sale. The difference in the amount of margin or profit a retailer can receive is referred to as shrink. If the quantity of shrink is significant, profits suffer, resulting in higher consumer expenses to meet the retailer’s needs.
Shrinkage in retail refers to a company’s percentage loss due to product damage, expiration, and theft of unsold merchandise. Retail shrinkage can occur at any point along the manufacturing and sales chain, including the factory, in transit, and at the retail outlet.
7. What Is The Significance Of An Accurate And Thorough Inventory Count?
A proper inventory count is critical for every organization since it ensures that we have adequate goods to meet client demand. If we don’t have enough product in stock, we’ll have to order more from our suppliers, which takes time and money. Similarly, having too many goods on hand wastes resources. In my previous position, I was in charge of performing weekly inventory counts using an automated method. It taught me to perform regular checks to ensure we have the correct amount of merchandise.
8. What Is Your Procedure For Ensuring That You Have An Accurate Inventory Count?
I begin by examining my prior counts to see if there are any differences between what I previously counted and what was reported. If there are no differences, I will begin counting all merchandise in the allocated area. For example, when I worked at ABC Company, I would count all goods on hand in the warehouse every two weeks. I would compare each count to the prior count to ensure everything was in order.
9. What Level Of Understanding Do You Have Of The Concept Of Vendor Management?
Vendor management is the process of managing relationships with vendors and suppliers. Throughout my career, I’ve had many encounters with vendor management. At my previous employment, I was in charge of developing a vendor management strategy for our organization. It entailed investigating several forms of software that could assist us in managing our vendor relationships. I eventually settled on a system that allowed us to track orders, connect with vendors, and perform other things.
10. Have You Ever Used Any Inventory Management Software?
Throughout my career, I’ve used a number of inventory management software applications. Each system has its advantages, and I like to use whichever one is most effective for the organization I’m working for at the time. For example, when working for ABC Company as an inventory control specialist, we used a software application named XYZ Inventory Management Software. It has many features that make it simple to keep track of our inventory levels and make modifications as needed.
11. We Aim To Increase The Turnover Of Our Inventory. What Is The Most Effective Way To Accomplish This?
The most effective way to improve inventory turnover is to reduce the number of times products are on hand. It is possible because of forecasting tools that allow me to estimate when we will require new products. I can then order such things to ensure they arrive on time. Another method for increasing inventory turnover is to use ABC analysis to discover which items sell the most and should be stocked first.
12. In Case There Is An Error In The Inventory Count. How Do You Deal With It?
In my previous position as an inventory control specialist, I observed a difference between our actual product count and the data we gathered via our software system. I realized that one of my team members had put incorrect information into the database. This error forced us to ship more items than we had on hand, resulting in a revenue loss for the organization. To avoid this happening again, I instituted new training methods for my staff so they could better grasp how to utilize the inventory management software.
13. What Are Some Of The Most Crucial Skills An Inventory Controller Should Possess?
Attention to detail and communication are the two most crucial abilities the inventory controller may have. These abilities guarantee that I accurately track all inventory and communicate with my team members about any inconsistencies or concerns we may discover. In my previous role, I honed these abilities by assisting a more experienced inventory controller in learning the best ways to record inventory and communicate efficiently.
14. What Is The First Thing You Would Look Into If The Inventory On Hand Does Not Match The Sales Records?
If there is a disparity between inventory on hand and sales records, I would first look at the time period during which the mismatch happened. If the mismatch occurred over a lengthy period of time, it might be due to a human mistake or a system fault. However, if the disparity lasted one day, someone stole from the firm. In either situation, I would notify my supervisor immediately so that they may initiate their investigation.
15. Do You Have Any Experience Generating Reports For Senior Management?
In my previous position, I submitted monthly inventory reports to my manager. My manager would then utilize these reports to prepare weekly updates for our CEO. I picked up a few hints along the way that helped expedite my report-writing process. For example, I began utilizing an inventory software application that allowed me to track any changes to inventory levels during the week. It made it easy for me to produce accurate reports each week.
16. What Types Of Inventory Management Systems Have You Employed In The Past?
I utilized SAP for inventory management in my previous position. This system is quite thorough, allowing me to keep track of our inventory levels at all times. It also assists me in managing orders and shipments, making it easy to know when we need to replenish things or ship them to consumers. Oracle NetSuite is another inventory management system that I’ve tried. This solution is fantastic since it is cloud-based, allowing me to access it from anywhere. It also includes several features that make inventory management easy.
17. Describe Some Of The Responsibilities You Accomplished In Your Previous Position.
In my previous job, I was mostly in charge of packaging, labeling, and arranging inventory for distribution. However, when I first started in that position, the technique my team and I used to complete order processing was a little too time-consuming. We used color-coded matrices to assist us in categorizing prioritized orders and standard shipments after collaborating with my peers. It aided us in streamlining our key work responsibilities and improving the company’s shipment times.
18. Do You Have Any Previous Experience With Warehouse Management Systems (WMS)?
I recognize the significance of warehouse management software in sustaining effective productivity and accomplishing targets. In my previous work, I obtained expertise with 3PL Central WMS, a cloud-based warehouse management system that enables me to collaborate with third-party logistics firms while managing numerous inventory, customers, shipment, and invoicing schedules. This tool assisted me in rapidly and efficiently sorting and organizing this data, and I’m eager to learn more about systems.
19. How Frequently Should Firms Do Inventory Checks?
In my former position as an inventory control specialist, I completed inventory inspections every two weeks. However, I discovered we might have cut our expenses by doing inventory inspections once a month. We were able to do this because of how we arranged our warehouse and employed barcode scanning technology. If your company is similar in size and organization, I would advocate lowering your inventory check frequency.
20. Do You Know How To Handle Hazardous Materials Appropriately?
I’ve never delivered hazardous items personally, but I understand that while packaging and labeling them, all personnel must wear safety gear. They should also be separated from other shipments. At my former workplace, we had multiple packages carrying hazardous goods, and our team consistently followed these guidelines.
21. Give An Example Of When You Detected And Fixed An Issue In A Shipment.
At my previous employment, I discovered that one of our shipments was missing some products. I promptly called the customer to inform them of the problem. They were very understanding and said they would call the firm when the remainder of their purchase arrived. I phoned the shipping department afterward to find out why the item was unfinished. The shipping manager notified me that there had been an error on the inventory list, and we had delivered the incorrect products. We corrected the error and dispatched the products to the client.
22. What Would You Do If You Discovered An Error In A Shipment’s Inventory List?
If I detected a mistake on an inventory list for a shipment, I would immediately notify my supervisor or manager so that it could be corrected before the cargo was dispatched. If there was not enough time to correct the error before the shipment departed, I would make a note of it in the shipment’s records so we could address it later. It is significant because if the cargo arrives at its destination with missing products, it may be difficult to pinpoint the source of the error.
23. How Well Do You Handle Pressure?
I’m used to operating under duress because I used to be a warehouse loader. When I worked as a loader, we frequently had huge shipments enter our warehouse simultaneously. Thus, my colleagues and I had to work swiftly to guarantee that every truck got loaded on time. I learned how to prioritize work so that I could do everything before the rush stopped. I also learned how to communicate with my coworkers about who would perform what task so that we all understood what to do.
24. What Would You Say To A Customer If A Package Was Missing Or Stolen?
At my previous job, I had a customer who reported a lost item that they hadn’t yet received. I retrieved the shipment information and sent it to the customer after assisting them in locating the order number on their digital receipt. When the customer and I checked the shipping information online, we identified a snag in the carrier’s operation. I closed the conversation in a positive tone after informing the customer that the goods will be delayed.
25. How Can You Ensure That Your Talents Are Continually Improving?
Learning about new technology is one of my objectives. To keep informed, I study and use self-learning behavioral methodologies. I applied my technological knowledge at work by learning new abilities. For example, using the knowledge I obtained from a self-study course in UX design best practices, I improved the UX of my organization’s website.
26. How Do You Handle Negative Criticism Or Poor Reviews? What Is Your Method?
Empathy is a critical behavioral soft skill that can be useful when responding to unfavorable criticism or critique. When a service or product fails to meet a customer’s expectations, I always express my sympathies, ask clarifying questions, and strive to better comprehend their criticism and get to the root of the problem.
I’d then apologize for the inconvenience and, if we’re communicating via email or chat, try to move the conversation offline (i.e. see the client in person or call them) to handle the issue with the team’s support.
27. Give Me An Example Of A Goal You Attained And Explain How You Did It.
When I started working at XYZ Company, I wanted to be Employee of the Month. It was a motivational challenge, and not everyone took it seriously, but I was desperate for that parking spot and my photo on the wall. I went above and above to assist my coworkers, superiors, and customers, which I would have done anyhow. I like my job and the individuals with whom I work. I was given the distinction in the third month I was there. It felt amazing to accomplish my goal, and I ended up moving into a managing role there quickly, thanks to my optimistic attitude and perseverance.
28. Describe A Controversial Decision You Made And How You Handled Its Implementation.
I once took over a team of workers after their manager moved to another city. They were allowed to cover each other’s shifts without seeking permission from management. I didn’t like how certain people were given greater opportunities than others. I instituted a policy requiring my assistant to approve any staffing changes to ensure that everyone who needed extra hours and was available at specific times could be accommodated.
29. Give An Instance Of A Time You Worked As A Team.
During my final semester of college, I worked in the business department as part of a research team. The project’s director was working on a book about the development of trade in Europe throughout the Middle Ages. We were each assigned different sectors to focus on, and I recommended that we meet alone before our weekly meeting with the professor to discuss our progress and assist each other if we had any problems. The professor was quite pleased with how we collaborated, and it also helped to streamline his research. Because of the work we assisted him with, he was able to begin working on his final copy months ahead of schedule.
30. Tell Me About A Time When You Had To Manage Many High-Priority Projects. How Did You Pick Where To Start?
In my previous inventory controller role, I was assigned two high-priority tasks by two distinct supervisors whom I assisted. The dates for both projects were tight, and both were critical, so the nature of the jobs alone wasn’t enough to determine how I should approach the matter.
I took a moment to sketch the necessary procedures for both activities to figure out how to proceed. This allowed me to estimate the time required while also ensuring I didn’t neglect anything important. I, therefore, opted to begin with the duty that took the least amount of time. My key explanation is that one may be done in hours while the other takes a few days. By selecting the shorter one first, I was able to finish that obligation, eliminating the need to submit updates on that assignment in the coming days, giving me more time to focus on the jobs themselves, and allowing me to complete both by the deadline.
Preparing for an interview entails thinking about your goals and qualifications concerning the role and employer. To do so, research the organization and carefully read the job description to determine why you would be a good fit.