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

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.

Question 2

Inventory accuracy is typically measured by comparing which two figures?

Accepted Answer

System (book) inventory records versus physical count results

Answer

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.

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

Shrinkage rate measures inventory losses as a percentage of total inventory value, encompassing theft, spoilage, damage, and data entry errors.

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

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.

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 (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.

(CIM) Certified Inventory Manager Practice Test

(CIM) Certified Inventory Manager Practice Test

CIM Inventory Performance Metrics & KPIs 2