Inventory Performance Metrics & KPIs Flashcards
7 cards from real CIM 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 Performance Metrics & KPIs flashcards as text
What does the Perfect Order Rate KPI measure?
Answer: The percentage of orders delivered complete, on time, undamaged, and with correct documentation
Perfect Order Rate measures the share of orders that meet all four criteria: on-time delivery, complete quantity, no damage, and accurate paperwork, serving as a comprehensive supply chain KPI.
Inventory accuracy is typically measured by comparing which two figures?
Answer: System (book) inventory records versus physical count results
Inventory accuracy compares recorded (book) quantities in the inventory management system to actual physical counts, revealing discrepancies caused by theft, damage, or data entry errors.
A shrinkage rate of 3% means which of the following for an inventory manager?
Answer: 3% of inventory value is lost due to theft, damage, or administrative error
Shrinkage rate measures inventory losses as a percentage of total inventory value, encompassing theft, spoilage, damage, and data entry errors.
Which metric is most useful for identifying slow-moving or dead stock in an inventory portfolio?
Answer: Inventory turnover by SKU compared to category benchmarks
Comparing per-SKU inventory turnover to category or industry benchmarks quickly identifies items that are moving significantly slower than expected, indicating dead or slow-moving stock.
What is the key difference between service level and fill rate as inventory KPIs?
Answer: Service level measures the probability of no stockout during a cycle; fill rate measures the proportion of demand met from stock
Service level (cycle service level) is the probability that inventory does not stock out during a replenishment cycle, while fill rate is the fraction of total demand satisfied directly from available inventory.
Weeks of Supply (WOS) is calculated as which of the following?
Answer: On-hand inventory divided by average weekly demand
Weeks of Supply = On-Hand Inventory ÷ Average Weekly Demand, indicating how many weeks of sales the current stock can support before a stockout occurs.
What does a backorder rate KPI help an inventory manager evaluate?
Answer: The frequency at which customer orders cannot be fulfilled from current stock
Backorder rate tracks the percentage of orders that cannot be fulfilled immediately from on-hand stock and must be placed on backorder, reflecting inventory planning gaps.