(Basics of Supply Chain Management) Flashcards
7 cards from real CPIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 (Basics of Supply Chain Management) flashcards as text
Which inventory policy triggers a replenishment order when on-hand inventory falls to a predetermined level, regardless of the time period?
Answer: Continuous review (Q) system
A continuous review (Q) system monitors inventory constantly and places a fixed order quantity whenever the reorder point is reached.
In supply chain network design, a 'hub-and-spoke' configuration primarily offers:
Answer: Consolidated shipments through central hubs to reduce per-unit transportation costs
Hub-and-spoke networks consolidate shipments at central hubs to achieve economies of scale in transportation, trading speed for lower cost.
Which term describes the practice of a supplier holding inventory at or near the customer's facility and retaining ownership until the customer uses it?
Answer: Consignment inventory
Consignment inventory means the supplier owns the goods until consumed by the customer, transferring financial risk to the supplier.
A company's supply chain has a 'demand-driven' design. This means production is primarily triggered by:
Answer: Actual customer orders or point-of-sale signals
Demand-driven supply chains use real customer demand signals (pull) rather than forecasts (push) to trigger production and replenishment.
When evaluating total cost of ownership (TCO) for a sourcing decision, which factor is often OVERLOOKED when only considering purchase price?
Answer: Hidden costs such as quality failures, transportation, and supplier management
TCO analysis reveals costs beyond purchase price, including quality, logistics, ordering, holding, and risk costs that impact true sourcing cost.
Which supply chain performance measure would BEST indicate how efficiently a company uses its assets to generate revenue?
Answer: Inventory turnover ratio
Inventory turnover (cost of goods sold ÷ average inventory) indicates how efficiently assets tied up in inventory are being utilized to generate sales.
A 'make-to-order' (MTO) production strategy differs from 'make-to-stock' (MTS) primarily in that MTO:
Answer: Begins production only after a confirmed customer order is received
MTO production is triggered by actual customer orders, eliminating finished goods inventory risk but resulting in longer customer lead times.