Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Internal Operations and Inventory 1

Question 1

A distribution center uses a continuous review inventory system. Which of the following formulas correctly calculates the safety stock when demand variability is the primary source of uncertainty?

Accepted Answer

Safety Stock = Z × σ_demand × √Lead Time

Answer

Safety stock in a continuous review system with variable demand is calculated as the Z-score (service level factor) multiplied by the standard deviation of demand multiplied by the square root of lead time. This formula accounts for demand variability over the replenishment lead time period.

Question 2

A company runs a periodic review inventory system with a review period of 4 weeks and a lead time of 2 weeks. What is the effective replenishment cycle that must be covered when placing a replenishment order?

Accepted Answer

6 weeks (review period plus lead time)

Answer

In a periodic review system, each order placed must cover inventory needs for the entire review period plus the lead time, because the next review will not occur until the review period ends. Therefore the effective cycle is 4 + 2 = 6 weeks.

Question 3

Which of the following best describes a Type I service level (also called the cycle service level) in inventory management?

Accepted Answer

The probability that no stockout occurs during a single replenishment cycle

Answer

Type I service level (cycle service level) measures the probability that inventory on hand will be sufficient to meet all demand during a single replenishment cycle—i.e., the probability of not experiencing a stockout in any given cycle. It differs from Type II (fill rate), which measures the fraction of demand met from stock.

Question 4

In rough-cut capacity planning (RCCP), planners compare the master production schedule against which of the following?

Accepted Answer

Key or critical resource capacities using bill of resources

Answer

RCCP validates the MPS by comparing planned production quantities against critical resource capacities using a bill of resources (or resource profile). It is a high-level check performed before material requirements planning to ensure the MPS is feasible without detailed routing analysis.

Question 5

A warehouse manager notices that a small percentage of SKUs accounts for the majority of annual inventory value. Which inventory classification technique should be applied to prioritize management attention?

Accepted Answer

ABC classification

Answer

ABC classification ranks SKUs by annual usage value (unit cost × annual volume). Typically, A items (roughly 10–20% of SKUs) represent 70–80% of total inventory value and receive the tightest control, while B and C items receive progressively less oversight. This directly addresses the Pareto principle observation described.

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice Certified Supply Chain Professional (CSCP) Internal Operations and Inventory 1