CLP Inventory Control & Warehousing 2 — Questions and Answers
Question 1: Which inventory replenishment method triggers an order when stock falls to a predetermined minimum level?
- Periodic review system
- Continuous review (reorder point) system (Correct answer)
- Vendor-managed inventory
- Just-in-time replenishment
Correct answer: Continuous review (reorder point) system
A continuous review system monitors inventory continuously and places an order when stock reaches the reorder point.
Question 2: A warehouse uses 'zone picking' to fulfill orders. What is the primary benefit of this strategy?
- Reduces the number of SKUs stored
- Minimizes picker travel distance within assigned zones (Correct answer)
- Eliminates the need for a WMS
- Increases receiving dock utilization
Correct answer: Minimizes picker travel distance within assigned zones
Zone picking assigns pickers to specific areas, reducing travel time and increasing throughput.
Question 3: What does the term 'safety stock' represent in inventory management?
- Stock reserved for VIP customers only
- Extra inventory held to buffer against demand or lead-time variability (Correct answer)
- Items quarantined due to quality issues
- Inventory set aside for seasonal promotions
Correct answer: Extra inventory held to buffer against demand or lead-time variability
Safety stock is buffer inventory maintained to protect against unexpected demand spikes or supply delays.
Question 4: Which storage method maximizes vertical space utilization in a warehouse?
- Floor stacking
- Drive-in racking
- High-bay narrow-aisle racking (Correct answer)
- Flow-through racking
Correct answer: High-bay narrow-aisle racking
High-bay narrow-aisle racking uses vertical height and specialized lift trucks to maximize cubic storage capacity.
Question 5: An ABC analysis categorizes inventory items primarily by:
- Physical size and weight
- Annual consumption value (Correct answer)
- Supplier lead time
- Shelf life and perishability
Correct answer: Annual consumption value
ABC analysis ranks items by annual consumption value so high-value (A) items receive tighter control.
Question 6: Which KPI measures the percentage of customer orders shipped complete and on time from available stock?
- Inventory turnover ratio
- Order fill rate (Correct answer)
- Days sales of inventory (DSI)
- Carrying cost percentage
Correct answer: Order fill rate
Order fill rate (or perfect order rate) tracks how often orders are fulfilled completely and on time from stock on hand.
Question 7: What is the main purpose of a slotting optimization program in a warehouse?
- To schedule employee shifts
- To assign SKUs to locations that minimize travel and improve ergonomics (Correct answer)
- To calculate reorder points automatically
- To audit supplier invoices
Correct answer: To assign SKUs to locations that minimize travel and improve ergonomics
Slotting optimization places fast-moving or heavy items in the most accessible locations to reduce pick time and injury risk.
CLP Inventory Control & Warehousing 2
Which inventory replenishment method triggers an order when stock falls to a predetermined minimum level?