CIM Inventory Performance Metrics & KPIs 2

Question 1

What does the Perfect Order Rate KPI measure?

Accepted Answer

The percentage of orders delivered complete, on time, undamaged, and with correct documentation

Answer

The percentage of orders that required no supplier negotiation to fulfill

Answer

The ratio of orders shipped same-day versus orders shipped within 48 hours

Answer

The percentage of purchase orders matching the supplier's original quote exactly

Question 2

Inventory accuracy is typically measured by comparing which two figures?

Accepted Answer

System (book) inventory records versus physical count results

Answer

Supplier invoice quantities versus receiving dock quantities

Answer

Warehouse capacity versus current on-hand stock levels

Answer

Forecasted demand versus actual sales for each SKU

Question 3

A shrinkage rate of 3% means which of the following for an inventory manager?

Accepted Answer

3% of inventory value is lost due to theft, damage, or administrative error

Answer

3% of items are overstocked beyond the optimal reorder level

Answer

3% of supplier deliveries arrive with incorrect quantities

Answer

3% of orders are returned by customers each month

Question 4

Which metric is most useful for identifying slow-moving or dead stock in an inventory portfolio?

Accepted Answer

Inventory turnover by SKU compared to category benchmarks

Answer

Gross Margin Return on Investment across all product lines

Answer

Order fill rate segmented by product category

Answer

Days Payable Outstanding across supplier accounts

Question 5

What is the key difference between service level and fill rate as inventory KPIs?

Accepted Answer

Service level measures the probability of no stockout during a cycle; fill rate measures the proportion of demand met from stock

Answer

Service level measures order accuracy; fill rate measures on-time delivery performance

Answer

Service level is a supplier metric; fill rate is a customer-facing metric

Answer

Service level applies to safety stock calculations; fill rate applies to reorder point calculations

Question 6

Weeks of Supply (WOS) is calculated as which of the following?

Accepted Answer

On-hand inventory divided by average weekly demand

Answer

Annual demand divided by average on-hand inventory

Answer

Safety stock divided by average daily demand

Answer

On-hand inventory multiplied by average weekly sales velocity

Question 7

What does a backorder rate KPI help an inventory manager evaluate?

Accepted Answer

The frequency at which customer orders cannot be fulfilled from current stock

Answer

The percentage of purchase orders delayed beyond the agreed lead time

Answer

The proportion of returned goods requiring a supplier credit memo

Answer

The rate at which inventory is transferred between warehouse locations