Final Exam - Key Terms/Concepts Flashcards
(92 cards)
1
Q
INVENTORY is defined as the stock of products held to meet current demand. TRUE or FALSE?
A
False - FUTURE DEMAND
2
Q
PERFORMING INVENTORY refers to the __________ count of all items in the store which is typically done at least ________ per fiscal year.
A
physical, once
3
Q
ACQUISITION COSTS refers to the _________ for the product.
A
price paid
4
Q
PROCUREMENT COSTS are the costs associated with ____________ the product. This includes the __________ costs in placing and receiving, stocking the shelves and paying the invoice.
A
purchasing, labour
5
Q
CARRYING COSTS are the costs incurred in _________ the item, handling the item, __________ the item in the event of loss/theft, and _____________ the item for the original purchase (e.g., very expensive items).
A
storing, insuring, financing
6
Q
STOCK-OUT COSTS refer the costs involved in NOT having the product on hand. This may result in having to purchase the item at a higher rate or a loss of customers who are unwilling to wait for a product. TRUE or FALSE?
A
TRUE
7
Q
BREADTH refers to the number of _________ or variety of __________ stocked.
A
brands, items
8
Q
DEPTH of stock refers to how many of each item and ____________ is kept on hand. It determines the number of ___________ an item will have on the shelf.
A
size, facings
9
Q
SKU stands for STOCK KEEPING UNITS. True or False?
A
True
10
Q
In what ways does the SKU differ from a UPC?
A
A SKU is alphanumeric, varies in length, and is specific to the retailer.
11
Q
UPC stands for…?
A
Universal Product Codes
12
Q
DINs or DRUG IDENTIFICATION NUMBERS are assigned by each _________ for each medication based on _______, strength and dosage form.
A
Pharmaceutical company, drug name
13
Q
DIN numbers are different depending on the package size of the medication. TRUE or FALSE?
A
FALSE - DINs are the same for each drug regardless of package size (It could have different SKU or UPCs!)
14
Q
When deciding what types of items and how many of each item your pharmacy should carry, you must consider the following:
1. ______ OF PHARMACY
2. LOCATION OF THE PHARMACY
3. PRACTICE OBJECTIVES
4. SIZE AND AMOUNT OF ________
A
Type, shelf space
15
Q
INVENTORY MANAGEMENT (CONTROL) is the “practice of planning, organizing, and controlling inventory so that it contributes to the profitability of the business.” True or False?
A
True
16
Q
What the are the benefits of managing inventory effectively?
A
- Preventing stock-outs
- Reduction of holding cost
- Ability to detect theft
17
Q
Inventory that is MISMANAGED will result in overstock of fast movers and under stock of slow movers. True or False?
A
FALSE
18
Q
Inventory Management needs to include keeping track of:
- People, Equipment and procedures
- Accurate record of ________
- Amount of stock available for __________
- Amount of stock to be _________
A
inventory, purchase, ordered
19
Q
What is the main importance of inventory management according to the OCP?
A
Patient safety
20
Q
A POS or POINT OF SALE system, can preform the following functions:
- Generate _________ when needed
- Create necessary ____________ records
- Add products received to inventory
- Generate price ________ and shelf labels
A
purchase orders, accounting, stickers
21
Q
What are some of the advantages of a POS system?
a) Allow quick access to accurate inventory information
b) Scan products for quick/easy sales
c) Reduce labour/carrying costs
d) all of the above
A
D
22
Q
There are some downsides to a POS system. Mainly, it is expensive to _____________, and it will _________ at some point.
A
implement, fail
23
Q
What is an ITEM MOVEMENT report?
A
Helps in identifying top performs/top sellers that can be useful in inventory management decision making
24
Q
What are the three types of UNIT CONTROL?
A
- Visual (M)
- Periodic (M)
- Perpetual (T)
25
The VISUAL METHOD INVOLVES examining merchandise on the shelf by ___________ the pharmacy and looking at the existing stock. Stock that is running low or is completely out will be reordered. The quantities ordered are largely determined by __________ based on past usage to satisfy customer demand.
walking around, intuition
26
In order for the VISUAL METHOD to be effective, the following items must be considered:
1. Use a _____ book to keep track of items to be ordered
2. Maintain accurate shelf labels
3. Must be preformed ________
4. Only works well in _____ -volumes cases
want, regularly, low
27
The PERIODIC METHOD involves monitoring sales of products over specific time periods. It is based on an initial ______. plus the amount of merchandise ________ and relies on an accurate ______ count of products.
stock count, purchased, physical
28
The PERPETUAL METHOD records sales as they occur. This is the most effective means of inventory control in a dispensary because it calculates ___________ as stock is received and products are ______.
increases and decreases, sold
29
What are the two main DOLLAR CONTROL inventory management systems?
Economic Order Quantity, Open-to-Buy budget method
30
The ECONOMIC ORDER QUANTITY (EOQ) Method minimizes ___________ by determining both the most _________ quantity to order and the ________ of ordering to achieve the greatest financial success.
investment, economical, frequency
31
Why must PROCUREMENT COSTS be considered in addition to CARRYING COSTS?
A balance of the two is necessary to effective inventory management. Saving on procurement cost involves making larger orders less often. Saving on carrying costs involves making smaller orders more often.
32
The OPEN TO BUY (OTB) BUDGET Method monitors sales and purchases each month. It establishes a ________ purchase budget in advance and compares the purchase budget for following month to establish a ______ budget that compensates for over or under-spending from the previous month. It is usually best when used with an _______ control system.
monthly, refined, item-specific
33
The ultimate goal of UNIT and DOLLAR CONTROL methods is to achieve a point where sales are minimized with the maximum amount of inventory. True or False?
False
34
What is NOT a practical strategy to supplement good inventory control practices in the pharmacy?
a) Selecting generic products
b) Keeping track of unclaimed prescriptions
c) Increasing breadth of inventory
d) Choosing a supplier with generous return policy
e) Monitoring shrinkage
C
35
The three types of stock include the following:
1. Cycle stock (regular inventory for orders)
2. ______ stock (supply/demand fluctuation)
3. Speculative (future demand)
Buffer
36
The equation for AI (Average inventory) is BI (Beginning Inventory) + EI (Ending Inventory) divided by 2. The EI for this year is the same as .....?
Beginning inventory for next year
37
Goods Available for Sale (GAFS) = BI + P (________)
Purchases
38
COGS (Cost of Goods Sold) = GAFS - _______
Ending Inventory
39
ITR - Inventory Turnover Rate is the number of times per year inventory is _____ and _______ at cost. In pharmacy, and ITR of _____ is considered very good.
sold, replaced, 8 (45 days)
40
The ITR is calculated by dividing the COGS by the Average _______.
Inventory
41
The 5 RIGHTS with regards to purchasing include the following:
1. Right product
2. Right ______
3. Right time
4. Right _____
5. Right price
Quantity, vendor
42
CLASS A (______) products in the pharmacy are _____ demand items that are relatively inexpensive and should never be out of stock.
20/80, high
43
CLASS B (15/15) products include relatively fast moving ________ medications, price/sale sensitive _______ items. Important to have a competitive ____________ fee to help maintain sales.
Prescription, OTC, professional
44
CLASS C (65/5) products are _____ demand but _____ price items like Fragmn, EpiPen. We must keep in stock, but should never be __________ in case they expire before selling.
low, high, over-stocked
45
Which item is NOT considered to be one of the five basic types of purchasing:
a) Just-in-Time
b) Prime Vendor
c) Group Buying
d) Franchise Line
e) Public Label Purchasing
E
46
JUST IN TIME purchasing requires __________ purchasing in quantities that JUST meet supply needs or current demands. This is more common in _____________ pharmacy than hospital pharmacies as they are governed by a _____ listing.
frequent, community, formulary
47
PRIME VENDOR purchasing is one in which an agreement is made by an institution (pharmacy) with a _________. The wholesaler specifies a percentage or dollar value of goods that must be purchased within a certain _______.
wholesaler, period
48
What benefits come with purchasing from a PRIME VENDOR?
Competitive service fees, electronic order entry, emergency delivery
49
GROUP BUYING is a method by which pharmacies join forces for greater _________ powers for purchases. Group Buying also allows for shared ________ costs. Group Buying is used by ________ pharmacies to help compete with the larger chain drugstores.
negotiating, advertising, independant
50
FRANCHISE LINE purchasing typically applies to the _________ department in a pharmacy. Examples are Revlon, Maybelline, Lise Watier. Franchise Lines often demand a ________ order quantity.
cosmetics, minimum
51
A PRIVATE LABEL SUCH as Life Brand, Equate, or Rexall offers the advantages of a lower price which allows for a higher _______________. It also allows pharmacies to be more competitive because of _______ recognition.
profit margin, brand
52
Which of the follow factors is NOT a factor in choosing a supplier?
a) Payment Terms
b) Min/max order required
c) Brands required by pharmacy
d) Delivery times
e) Return policy
f) Incentives/services
C (should be quantity)
53
What types of items would make sense for bulk purchasing?
Antibiotics in the winter, sunscreen in the summer
54
What are the four main factors that influence ordering quantities?
- Rate of product sales
- Time between ordering/delivery
- Bulk pricing minimums
- Preventing out-of-stocks or surplus
55
There are two main sources of supply for the purchase of pharmacy goods:
- Direct from the _________
- Indirect from a ___________ company
manufacturer, wholesale
56
What are some of the downsides of ordering directly from the manufacturer?
Significant minimums and/or yearly dollar order amount
57
What are the three major distributers for pharmacy goods in Canada?
McKesson, Kohl & Frisch, PharmaSystems
58
What benefits to most wholesalers usually offer to pharmacies?
- next day _______
- same day delivery on weekdays, weekends (extra ____)
- monthly advertising
- generous _____ policies
delivery, fee, return
59
Reportable narcotics and controlled drugs require written or electronic ordering only. Verbal orders are not allowed. True or False?
True
60
Invoices for reportable N and C medications must be signed by a _____________ within ______ days of receiving the order and sent back to the ___________. Verbal orders need a ___________ copy, also sent within the same time frame.
RPh, 5, wholesaler, handwritten
61
Define the following short forms regarding payment terms:
EOM: End of the _____
COD: _____ on delivery
AOG: Arrival of ______
ROG: Receipt of goods
month, collect, goods
62
Discounts on invoices are specified as a % that are usually applied if the invoices are paid within a specific time frame. True or False?
True
63
What would the following payment terms "translate" to?
2/10 AOG Net 30
2% discount if paid within 10 days - full amount due in 30 days - AOG refers to start date of credit period
64
DATING DEALS offer savings on bulk purchases that often have short expiry dates. True or False?
True
65
FREE GOODS offers allow for an extra item at the same purchase price. True or False?
True
66
BACK ORDERS can be ______ or long-term. What steps should the pharmacy take when they are notified of a back order?
- notify the prescriber and patient
- find out when it might become available again
- assess options for obtaining item from another source
- address billing/cost issues
67
Items could become "short" due to ____________ in utilization, recall from the _____________, or withdrawal from the market by Health Canada.
increase, manufacturer
68
The five basic ways of ordering pharmacy goods include all of the following EXCEPT:
1. Electronically
2. Written/phone/fax
3. Order-entry device
4. Sales rep
5. Directly through the prescriber
5
69
What are some strategies to use when sending a fax/phone/written order to reduce potential for error?
- "confirmation only" for fax following a phone order
- Product name, supplier code, strength, dosage form, quantity, pack size
- Identify contact person and special instructions
- Confirm shipment date
70
While most drugs can be sold or "borrowed" from other pharmacies/hospitals easily, N, C and T/C items require an extra step. These drugs require a ______ and _____ prescription by a registered pharmacist and must be manually entered into a N&C drug register or pharmacy software system.
written and signed
71
The GROSS MARGIN is the RETAIL PRICE - ____________
Cost of item
72
The GROSS MARGIN % is the Gross Margin divided by the ______________ multiplied by 100%
Retail Price
73
MARKUP ON COST is the Gross Margin divided by the ______ multiplied by 100%
Cost
74
What is PHARMACY pricing method for determining retail cost from desired mark up%?
Subtract the desired markup % from 100% and turn it into a decimal. Divide the cost of the item by the decimal factor. You can figure out the original cost of an item by taking the retail price and multiplying by the decimal factor instead.
75
It is illegal to dispense expired medications or medications that will expire during course of treatment. True or False?
True
76
The PRODUCT MIX is the variety of _________ carried by a particular business. This affects the gross ______, due to the differences in markup of individual items. Typically a pharmacy will average 25% (dispensary), 35% (front store).
products, profit margin
77
MARKET ORIENTED pricing refers to the practice of pricing items at a ____________ level. This applied to convenience and ________ merchandise items. Impulse items are priced ______ market level, quickly expiring items are priced ________ market level.
competitive, general, above, below
78
TRADITIONAL pricing refers to grouping items together that have the same or similar ________ to achieve the desired sales. Strategies include using ______________ discount pricing routinely applied to certain items to drive sales.
markups, leader/loss-leader
79
What is usually required of a pharmacy when returning merchandise to it's supplier?
- reason for return
- prepay cost of return
- take reduced amount for item
- maintain a record of all items
80
It is best practice to routinely check for expiries, maintaining a logbook and pulling them from the shelf so they do not get dispensed in error. They should be stored in a separate room and clearly identify where they need to be returned to. True or False?
True
81
Which of the following is NOT a reason fro reurning items?
a) receiving damaged goods
b) items ordered in error
c) receiving the wrong item or duplicate shipment
d) items that were damaged at the pharmacy
D
82
What are some important guidelines to follow when returning items to the wholesaler/manufacturer?
1. Complete company name/address
2. Accurate customer number
3. Date of request
4. Quantity, name, strength
5. Expiry date
6. Reason for return
7. Sign and date - pharmacy manager
83
Valid reasons for receiving CREDIT on a shipment include:
- Overcharge
- _______ bill
- Billed for items not received
- ________ not applied
Double, promotion
84
Returning controlled substances requires a few extra steps:
- ________ authorization requested by RPh
- Packaged ________ and might have special return address
- "unserviceable" drugs are destroyed on site or by a special collection service
written, seperately
85
A REVERSE LOGISTICS return systems are often utilized for returning items that are found expired on the shelf or received from customers who no longer need them. True or False?
True
86
McKesson and Kohl and Frisch will also accept returns of products, but they must be.....?
originally purchased through them
87
Blockchain is defined as "a __________ public ledger that helps in recording all ______ through multiple computers." An advantage is that a transaction is tracked from _________________ and cannot be changed.
decentralized, transactions, beginning to end
88
Bar graphs are used to display _________, grouped data changes over _____.
large, time
89
Line graphs are used to show ________ over _____ between 2 or more variables.
trends, time
90
Pie charts are used to display ___________ data in __________.
proportional, categories
91
Pictograph compares _______ points in a visual way using ________
two, icons
92
Scatterplot displays the relationship between ____ datasets without reference to _______
two, time
