Practice Test GeeksCPIM - Certified in Production and Inventory Management Practice Test
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Inventory Management and Control 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 Inventory Management and Control flashcards as text

  1. What does the Days of Supply (DOS) metric indicate?

    Answer: How many days current inventory will satisfy demand at current usage rates

    Days of Supply is calculated as inventory on hand divided by average daily demand, indicating how long current stock will last before a stockout occurs.

  2. Which type of inventory is placed between two work centers to allow each operation to run independently at its own rate?

    Answer: Decoupling (buffer) inventory

    Decoupling inventory is positioned between dependent operations to separate them, allowing each work center to operate at its own pace without being constrained by upstream or downstream rates.

  3. What is pipeline inventory?

    Answer: Inventory that is currently in transit between supply chain locations

    Pipeline inventory consists of items that are actively moving through the supply chain—in transit between a supplier, plant, warehouse, or customer—and thus tied up and not yet available.

  4. Anticipation inventory is primarily built up to handle which situation?

    Answer: Predictable seasonal or promotional demand surges

    Anticipation inventory is accumulated ahead of a known demand increase—such as a holiday season or a major promotion—so production can run at a stable rate beforehand.

  5. What does the inventory-to-sales ratio measure?

    Answer: Inventory value as a proportion of total sales revenue

    The inventory-to-sales ratio expresses the value of inventory held relative to sales revenue, helping management assess whether inventory investment is proportionate to business volume.

  6. What is the primary goal of Vendor-Managed Inventory (VMI)?

    Answer: To transfer replenishment responsibility to the supplier

    In VMI, the supplier monitors the customer's inventory levels and takes responsibility for replenishment decisions, reducing the customer's ordering workload and improving supply continuity.

  7. Which supply chain phenomenon describes how small fluctuations in end-consumer demand become amplified as orders move upstream toward suppliers?

    Answer: The bullwhip effect

    The bullwhip effect occurs when each tier of the supply chain overreacts to demand signals, causing order variability to amplify upstream—much like the tip of a whip swings farther than the handle.