Which of the following are types of external inventory?

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

Answer: (D)

External inventory refers to stock that isn’t readily usable at the firm’s own facilities to meet current demand, often because it lies outside the plant or is no longer usable in production. Pipeline inventory fits this category because it consists of goods moving between locations and not sitting in the company’s warehouses ready to ship. Obsolete inventory also fits the idea of external stock in this context because it’s inventory the company can’t use or sell anymore, effectively making it nonproductive despite still being owned.

The other options describe internal aspects of inventory management. The ABC and BIN systems are methods for organizing and controlling stock within the firm’s facilities. The EOQ model helps determine how much to order, not a type of inventory. Cycle stock and safety stock are internal categories representing the portion of stock kept to satisfy regular demand and to buffer against variability, both located within the firm’s operations.