Operational Material Cost Interview Questions & Answers:

1. Tell me what can be the consequences of under stocking?

The following can be the consequences of under stocking:

-Production process cannot be operated efficiently, resulting delivery schedules.

-Firm may end up paying an idle labour force due to the production hold ups.

-Organisation may loose its important customers, due to the delay in meeting customers' orders.

-Unfavourable prices and quality Increased administration costs.

-Due to under stocking it will not be easy for the organisation to meet the unexpected demands of customers.

2. Can you please explain why should over stocking be avoided?

Due to the following consequences over stocking should be avoided:

-Funds get blocked which could be used elsewhere

-More storage facilities are required

-High costs of storage and maintenance

-Deterioration of quality and obsolescence of stock

-High Insurance cost More security and safety measures.

3. What is Global Tender?

Global Tender: is open to anybody from any part of the world to supply the required quantity and quality of materials.

4. What is Open Tender?

Open Tender : is open to all the suppliers within the country who can supply the required quantity and quality of materials. Such invitation is made by advertising in newspapers, journals etc.

5. What is Limited Tender?

Limited Tender : This type of tender is addressed to a limited number of suppliers, who are the reliable source of supply.

6. What is Single Tender?

Single Tender : When only one source of supply is available then single tender is addressed to the selected supplier.

7. Can you please explain the difference between Bin Card and Stores Ledger?

-Bin Card is a quantitative record of the individual item of its receipts, issues and closing balance whereas Stores Ledger records both the quantity and cost of receipts, issues and balances of item of material received.

-Bin Card is prepared by stores department whereas Stores Ledger is prepared by costing department.

-In Bin Card system, entries are made immediately after each transaction. In Store Ledger, entries are made periodically.

- In Bin Card, postings are made before a transaction. In Store Ledger, posting is made after a transaction.

-Bin Card is kept attached to the bins inside the store as to enable to identify the stock. Store Ledger is kept outside the store.

8. Do you know what can be the reasons for bin card and stores ledger not getting reconciled?

The following can be the reasons for bin card and stores ledger for not getting reconciled:

-Arithmetical error in calculating balances of the sheets.

-If posting of the transaction has been made on wrong bin card or stores ledger sheet.

-If issues transactions are treated as receipt transaction or vice versa, then this may create the difference in both the balances.

-Non posting of certain amount in any of the sheets.

9. What is valuation of receipts?

Valuation of receipts is the price billed in the invoices by the supplier. Following points should be kept in mind for this purpose:

-The trade discount is deducted from the basic price and all other amounts as billed by the supplier are added, like excise duty, sales tax, octroi duty, etc.

-Joint costs may be distributed on the basis of the basic price of the material.

-In case of imported material, the cost of the material consists of a basic price, customs duty, clearing charges, transport chares, etc.

10. Tell me what can be the discrepancies in material receipt?

There are two categories of material discrepancies:

First category includes-

-Quantity received in excess
-Quantity received in short
-Quantity damaged
-Receipt of incorrect quantity of material.
These discrepancies are normally caused by the transportation system.

Second category includes – Discrepancies in quality of material supplied.
These discrepancies are caused by the manufacturer.