CMRP CMRP Spare Parts and Inventory Management 2 — Questions and Answers
Question 1: What does 'stockout cost' represent in spare parts inventory decision-making?
- The total cost of production downtime, emergency procurement, and expediting fees when a required part is unavailable (Correct answer)
- The carrying cost of excess inventory that is not being used
- The administrative cost of placing an unplanned purchase order
- The penalty charged by vendors for rush deliveries
Correct answer: The total cost of production downtime, emergency procurement, and expediting fees when a required part is unavailable
Stockout cost quantifies the full financial impact of not having a part available, including lost production, expedited freight, premium pricing, and labor waiting time.
Question 2: In an Economic Order Quantity (EOQ) model, which two costs are balanced to determine the optimal order quantity?
- Ordering cost and inventory holding (carrying) cost (Correct answer)
- Purchase price and shipping cost
- Safety stock cost and stockout cost
- Labor cost and material cost
Correct answer: Ordering cost and inventory holding (carrying) cost
EOQ minimizes total cost by finding the order quantity where ordering cost (cost per purchase order × order frequency) equals holding cost (cost to store and finance inventory).
Question 3: What is the recommended approach for managing obsolete spare parts in a maintenance storeroom?
- Conduct regular reviews comparing stocked parts to current equipment and dispose of parts for retired or replaced equipment (Correct answer)
- Retain all parts indefinitely since equipment may be reinstalled
- Transfer obsolete parts to a secondary storage location and forget them
- Donate all obsolete parts to charity to avoid disposal costs
Correct answer: Conduct regular reviews comparing stocked parts to current equipment and dispose of parts for retired or replaced equipment
Regular obsolescence reviews aligned with equipment change management prevent storeroom costs from accumulating on parts that will never be used.
Question 4: Which storeroom management practice most effectively ensures that parts are correctly identified and located when needed by technicians?
- Implementing a bin location system with accurate part master data including cross-references and alternate part numbers (Correct answer)
- Storing frequently used parts near the storeroom door for quick access
- Allowing technicians to self-serve parts without formal issue transactions
- Grouping all parts by equipment manufacturer rather than by type
Correct answer: Implementing a bin location system with accurate part master data including cross-references and alternate part numbers
A bin location system with complete part master data ensures fast, accurate retrieval and reduces time technicians spend searching for parts.
Question 5: What is 'vendor-managed inventory' (VMI) and what is its primary benefit for maintenance operations?
- A supplier-managed replenishment program where the vendor monitors stock levels and restocks automatically, reducing procurement workload (Correct answer)
- A purchasing strategy where the lowest-cost vendor manages all storeroom operations
- An arrangement where vendors store parts off-site until called for
- A consignment program where parts are not paid for until used
Correct answer: A supplier-managed replenishment program where the vendor monitors stock levels and restocks automatically, reducing procurement workload
In VMI, the supplier monitors consumption data and replenishes stock automatically, reducing purchasing transactions and the risk of stockouts while leveraging the vendor's supply chain expertise.
Question 6: Which practice best supports linking spare parts records to equipment in a CMMS to improve maintenance efficiency?
- Creating bill-of-materials (BOM) lists for each piece of equipment that identify all associated spare parts (Correct answer)
- Storing parts lists in spreadsheets separate from the CMMS
- Requiring technicians to search the storeroom physically before consulting the CMMS
- Limiting CMMS part records to only items costing more than $100
Correct answer: Creating bill-of-materials (BOM) lists for each piece of equipment that identify all associated spare parts
Equipment BOMs in the CMMS directly link spare parts to assets, allowing planners to identify required parts during work order planning and reducing delays at execution.
CMRP CMRP Spare Parts and Inventory Management 2
What does 'stockout cost' represent in spare parts inventory decision-making?