APP Inventory, Logistics & Supply Chain Management 2

Question 1

A company uses a periodic review inventory system. What is the primary characteristic of this system?

Accepted Answer

Inventory is checked and orders placed at fixed time intervals

Answer

In a periodic review system, inventory levels are checked at set intervals (e.g., weekly or monthly) and orders are placed to bring stock up to a target level.

Question 2

Which supply chain risk mitigation strategy involves holding extra inventory to buffer against demand or supply variability?

Accepted Answer

Safety stock

Answer

Safety stock is buffer inventory held above average demand to protect against variability in demand or supplier lead times.

Question 3

In logistics, what does 'freight consolidation' primarily achieve?

Accepted Answer

Combining smaller shipments into one larger load to reduce per-unit shipping costs

Answer

Freight consolidation combines multiple small shipments into a single larger shipment, reducing cost per unit by achieving better carrier rates.

Question 4

A purchasing practitioner discovers that a supplier's on-time delivery rate has dropped from 95% to 78%. Which metric best quantifies the downstream impact on the buyer's inventory?

Accepted Answer

Required safety stock increase

Answer

Lower supplier reliability increases lead time variability, which directly drives up the safety stock needed to maintain the same service level.

Question 5

Which of the following best describes 'postponement' as a supply chain strategy?

Accepted Answer

Deferring product customization until closer to the customer order to reduce finished goods inventory

Answer

Postponement delays differentiation (e.g., labeling, configuration) to the latest possible point, reducing the risk of holding obsolete finished inventory.

(APP) Accredited Purchasing Practitioner Certification Practice Test

(APP) Accredited Purchasing Practitioner Certification Practice Test

APP Inventory, Logistics & Supply Chain Management 2