COP Supply Chain Fundamentals 2

Question 1

What is safety stock?

Accepted Answer

Extra inventory held as a buffer against unexpected demand spikes or supply delays

Answer

Inventory reserved for fire-safety compliance

Answer

Goods set aside for quality inspection

Answer

Products stored in a separate secure location

Question 2

What is EDI (Electronic Data Interchange) used for in supply chain?

Accepted Answer

Automating the electronic exchange of business documents like POs, invoices, and ASNs between trading partners

Answer

Processing credit card payments

Answer

Encrypting customer data in transit

Answer

Managing employee schedules in the distribution center

Question 3

What is a blanket purchase order?

Accepted Answer

A long-term agreement authorizing repeated purchases from a supplier up to a set quantity or dollar amount

Answer

A PO that covers multiple product categories in a single document

Answer

An emergency PO issued outside the normal approval process

Answer

A PO used exclusively for raw materials

Question 4

In supply chain, 'stockout' refers to:

Accepted Answer

A situation where demand for an item exceeds available inventory, preventing fulfillment

Answer

Removing obsolete inventory from the warehouse

Answer

Moving inventory to an offsite storage location

Answer

Writing off damaged goods

Question 5

What is a 3PL (Third-Party Logistics) provider?

Accepted Answer

An outsourced company that manages warehousing, transportation, and/or fulfillment on behalf of another business

Answer

A company that manufactures goods for other brands

Answer

A technology vendor providing supply chain software

Answer

A customs broker for international shipments

Question 6

What does 'just-in-time' (JIT) inventory mean?

Accepted Answer

Receiving goods from suppliers only as they are needed in the production or fulfillment process

Answer

Delivering products to customers within 24 hours

Answer

Ordering inventory at the last possible moment before a stockout

Answer

Issuing purchase orders automatically when stock falls below reorder point