6 Inventory Management Interview Questions (With Answers)
Updated 13 March 2023
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Inventory management involves overseeing the supplies of a business by managing the new stock that comes into the inventory and delivery shipments. Inventory management skills typically find their use in the supply chain of various industries, including retail, manufacturing, food supplies and pharmacies. If you are planning to apply for inventory management positions, reviewing commonly asked interview questions can help you prepare better. In this article, we review six inventory management interview questions and provide their sample answers.
6 Inventory Management Interview Questions With Example Answers
Here is a list of inventory management interview questions with example answers that can help you better prepare yours:
1. What is a needs forecast and how do you create one?
Forecasting typically helps prevent inventory shortage or excess of goods, thus saving costs. Interviewers ask this question so that they can evaluate your inventory management skills and assess whether you know this important aspect of managing inventory. They also evaluate whether you have any unique ideas about forecasting analysis and whether you can bring any new techniques to the organisation after getting hired. To answer this question, you can begin by defining a needs forecast and then give an example from your previous job when you used a needs forecast.
Example: 'A needs forecast is a method of forecasting the stock that an organisation requires over the next week, month, quarter or year. This forecasting method can help businesses prevent low inventory by accurately determining the orders that they can place shortly. When I worked for Toy2Machines Corp, I created needs forecasts by looking at recent trends in consumer purchase behaviour. I then combined this data with sales projections for the next quarter to create a near-accurate inventory requirement table for the next period.'
Related: Procurement Skills: Definition, Importance And Examples
2. Give an example of an inventory error that you encountered, and how did you rectify it?
Inventory errors usually occur in every organisation. Inventory management typically involves identifying such errors as early as possible and devising ways to rectify them. It may also involve applying methodologies to prevent or minimise such errors from occurring in the future. During an interview, the recruiter may ask you this question to evaluate how well you know the methodologies of inventory management and to assess your problem-solving skills. To answer this question, you can give an example of where an inventory error occurred in your previous job while emphasising how you solved it.
Example: 'When I was with EmboldenWraps Inc, we noticed that the inventory was low in our Cuttack store. It was the festive season, so it was important to rectify the error at the earliest. I ran some data analysis algorithms to find out that another store about 100 km from Cuttack had high inventory and customer turnout there was low. Incorrect shipment can be the reason for this error. Within hours, the excess inventory from the second store moved to the Cuttack store. I then devised an additional logistic check module to prevent such lapses in the future.'
Related: What Is Retail Accounting? Definition And Steps You Can Use
3. What were your specific duties involving inventory during your last job?
Though many industries employ professionals with an inventory management skill set, an interviewer may ask you this question to understand any industry-specific roles that you may have had in your previous jobs. This is to ascertain that your experience can be helpful in the industry to which you are applying. To answer this question, you can start by listing your general duties as an inventory manager and then follow up with examples that can express your knowledge about the supply chain of the particular industry.
Related: Inventory Manager Skills (With Definition And Examples)
Example: 'As an inventory manager in my last job at SparkGems Inc, I created an inventory plan to ensure stock levels were always optimal. My role involved overseeing product procurement, managing the staff and working on forecasts and trend analysis. I also liaised between supply managers and logistics and production departments. Considering that I worked for a niche industry, my role also involved creating seasonal trends during festivals and important occasions and working with the sales and marketing teams to ensure the inventory levels aligned with their campaigns and market demands.'
Related: What Is An Inventory Manager? (Plus How To Become One)
4. What is cycle counting and how do you use it in inventory management?
Businesses typically deploy the method of cycle counting to monitor inventory items. Monitoring is important to determine whether the business has encountered any losses because of a mismatch of items in the inventory. The recruiter may ask you this question to assess your understanding of the core principles of inventory management. To answer this question, you may start with the definition of cycle count and then give an example from your past jobs to explain how you used this method to help the business.
Example: 'Cycle counting is a process where we can physically check a small segment of the inventory and compare it with stock that the system displays. This is to ensure that the actual stock is always the same as the book stock or the stock on the system. Physical checking of the entire inventory can cause downtime that cycle counting may prevent. In my past job as an inventory manager at IW3C Industries, I performed a weekly cycle count of all the raw materials that the manufacturing department of the company ordered regularly.'
Related: 14 Types Of Inventory (Plus Effective Management Tips)
5. How did you improve the process of inventory management in your previous jobs?
The interviewer may ask this question to learn more about how you can use your creative thinking alongside your inventory management skills. Inventory management processes often require upgrades to ensure that there are minimum discrepancies between stocks that a business requires and the stocks that the business currently has. Your answer to this question can help the interviewer analyse whether you proactively upgrade your inventory management skills. You can answer this question by discussing a scenario in your previous jobs where you improved the inventory management process and how you did it.
Example: 'When I was working with Chemwerkx Private Limited, the company decided to shift to lean manufacturing processes. Every department had to reorganise to evaluate how to better conform to the quality guidelines. Inventory management was not the topmost priority in the beginning, but I proactively designed a system that can streamline the entire process of cycle counting using industry-standard lean methodologies. When the business finally implemented the six-sigma processes, the inventory was already up to date with new technologies.'
Related: 8 Inventory Management Software Solutions (With Benefits)
6. What are opening stock and closing stock?
Inventory management skills are typically about managing stocks and the knowledge of stocks is often a prerequisite for a role that desires this skill set. Because of this, through a question about stocks, an interviewer can evaluate whether you know the core processes of inventory management. You can answer this question by explaining what opening and closing stocks are and how they affect businesses. You can also give examples of how you used stock values in the past to update the leadership teams about the operations of the inventory.
Example: 'Businesses typically evaluate inventory stocks at the beginning and the end of a reporting period. A reporting period is a time for which a business reports its financial position. Opening stock is the count of items in the inventory at the beginning of a reporting period. Closing stock is the count at the end of the same period. In all my previous jobs as an inventory manager, I monitored the opening and the closing stocks and submitted the reports at the beginning and the end of every financial period to help the leadership team take strategic decisions.'
Related: Inventory Adjustment: Meaning, Types, Benefits And Steps
Inventory Management Interview Tips
Here are a few tips that can help you better answer interview questions about inventory management:
Focus on relevant experience. Including your experience in planning, forecasting, analysing and communicating can be more relevant for inventory management. Mentioning skills, such as attention to detail, can also help if you have no work experience.
Research the company. Learning more about the company for which you are interviewing can help you suggest how you can improve their inventory processes with specific examples.
Learn the core principles. Studying the core principles of inventory management, such as cycle count, stocking costs and economic order quantity (EOQ) can help you show interviewers the strength of your skill set.
Keep yourself up to date. Continuing to improve your knowledge base about the latest inventory management tools and techniques can help you present your quick learning skills during an interview.
Prepare for behavioural questions. Inventory management often involves conflict management with logistics and other teams. Preparing for questions about such challenges can help you answer behavioural questions at the interview.
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