External inventory types include which of the following?

• A. Pipeline inventory and obsolete inventory
• B. Cycle stock and safety stock
• C. ABC system and BIN system
• D. EOQ model and Base stock level

Answer: (A)

External inventory refers to stock that is not part of the firm’s readily usable on-hand production or sales inventory; it is located outside the day-to-day, active internal stock. Pipeline inventory fits this because it is in transit between locations and not yet in the firm’s possession as usable stock. Obsolete inventory also fits, as it represents stock that has fallen out of value or usefulness and is not part of current operations, often sitting outside normal production or sales channels until written off or disposed of.

The other concepts are not inventory types in this sense. Cycle stock and safety stock are internal stock kept within the firm to meet regular demand and cover variability. ABC and BIN systems are methods for classifying or organizing inventory, not categories of stock themselves. EOQ model and base stock level are replenishment planning rules, not distinct types of inventory.