Certification Examination Practice

Illinois Inventory Control Specialist Certification Examination Practice Questions And Correct Answers (Verified Answers) Plus Rationales 2026 Q&A | Instant Download Pdf

• What is the primary purpose of inventory control in a supply chain?
• Reduce employee workload
• Maximize sales
• Optimize inventory levels
• Increase supplier orders

Rationale: Inventory control ensures the right quantity of stock is

maintained to meet demand while minimizing costs.

• Which method calculates inventory value based on the most recent

purchases?

A. FIFO 1 / 4

B. LIFO

• Weighted Average
• Specific Identification

Rationale: LIFO (Last-In, First-Out) uses the latest inventory costs for

valuation.

3. A perpetual inventory system:

• Updates stock levels monthly
• Only tracks inventory when received
• Continuously updates inventory after each transaction
• Is used for non-perishable goods only

Rationale: Perpetual systems record inventory in real time, reflecting every

sale or receipt.

4. Cycle counting is:

• A full annual inventory count
• A periodic counting of selected inventory items
• Counting only high-cost items once a year
• Not used in modern inventory systems

Rationale: Cycle counting focuses on subsets of inventory regularly to

maintain accuracy without full physical counts.

• Which inventory method results in higher net income during inflation?

A. FIFO

B. LIFO 2 / 4

• Weighted Average
• Specific Identification

Rationale: FIFO (First-In, First-Out) assigns older, lower costs to COGS,

increasing net income.

6. Economic Order Quantity (EOQ) is used to:

• Determine reorder frequency
• Minimize total inventory costs
• Track stock accuracy
• Forecast demand

Rationale: EOQ balances ordering and holding costs to reduce total

inventory expense.

7. ABC analysis categorizes items based on:

• Supplier reliability
• Value and usage rate
• Shelf life
• Delivery time

Rationale: ABC analysis prioritizes inventory management by focusing on

high-value, high-usage items.

• Which of the following is a holding cost in inventory management?
• Order processing fees
• Storage and insurance costs 3 / 4

• Transportation fees
• Supplier discounts

Rationale: Holding costs are expenses related to storing inventory.

9. Stockout costs refer to:

• Costs of ordering excess inventory
• Losses incurred when inventory is unavailable
• Transportation expenses
• Supplier fees

Rationale: Stockouts occur when demand exceeds available inventory,

potentially causing lost sales and penalties.

• What is a just-in-time (JIT) inventory system designed to do?
• Increase warehouse stock
• Reduce inventory levels and waste
• Focus on high-cost items only
• Minimize supplier engagement

Rationale: JIT delivers inventory as needed, reducing storage costs and

excess stock.

• Which key performance indicator measures inventory

efficiency?

• Accounts Payable Turnover
• Net Profit Margin
• / 4