COP Inventory Control & Fulfillment Procedures 3 — Questions and Answers
Question 1: A company ships fragile electronics using UPS. The package is damaged in transit. Which party must file the carrier damage claim?
- The end customer only
- The shipper (seller), as the contracting party with the carrier (Correct answer)
- The receiving warehouse exclusively
- The freight broker who booked the shipment
Correct answer: The shipper (seller), as the contracting party with the carrier
The shipper, who has the contract with the carrier, is typically responsible for filing damage claims, though FOB terms can shift this responsibility.
Question 2: What does the term 'pick accuracy rate' measure in a fulfillment operation?
- The speed at which pickers complete orders per hour
- The percentage of order lines picked without error (Correct answer)
- The ratio of picks completed to picks attempted
- The number of items picked per square foot of warehouse space
Correct answer: The percentage of order lines picked without error
Pick accuracy rate is the percentage of order lines fulfilled with the correct item, quantity, and condition — a key quality KPI.
Question 3: Under FOB Destination terms, when does title and risk of loss transfer from seller to buyer?
- When the seller hands goods to the carrier
- When the buyer issues the purchase order
- When the goods arrive at the buyer's specified destination (Correct answer)
- When the invoice is paid
Correct answer: When the goods arrive at the buyer's specified destination
FOB Destination means the seller retains title and risk until the goods physically arrive at the buyer's destination.
Question 4: Which inventory control technique uses data analysis to classify items so that the top 20% of SKUs receiving the most management attention typically represent 80% of inventory value?
- EOQ Analysis
- ABC Analysis (Pareto Principle) (Correct answer)
- JIT Inventory
- Vendor-Managed Inventory
Correct answer: ABC Analysis (Pareto Principle)
ABC Analysis applies the Pareto Principle, classifying 'A' items as high-value SKUs requiring close control and 'C' items as low-value needing minimal oversight.
Question 5: A warehouse management system (WMS) generates a 'directed put-away' task. What is the primary benefit of this feature?
- It allows workers to choose any open bin location
- It automatically selects the optimal storage location based on rules like slotting, velocity, and available space (Correct answer)
- It generates purchase orders when stock runs low
- It updates the carrier with tracking information
Correct answer: It automatically selects the optimal storage location based on rules like slotting, velocity, and available space
Directed put-away uses pre-defined rules to assign incoming inventory to the optimal location, improving pick efficiency and space utilization.
Question 6: A fulfillment center uses FEFO (First-Expired, First-Out) sequencing. For which product type is this method most critical?
- Electronic components
- Steel hardware fasteners
- Pharmaceuticals and perishable food items (Correct answer)
- Plastic packaging materials
Correct answer: Pharmaceuticals and perishable food items
FEFO ensures products with the earliest expiration dates are shipped first, which is critical for perishables, food, and pharmaceuticals to prevent expired product from reaching customers.
Question 7: What is the purpose of a 'slotting optimization' project in a warehouse?
- Assigning time slots for carrier pickups
- Repositioning SKUs within the warehouse to reduce travel time and improve ergonomics based on pick frequency (Correct answer)
- Scheduling employee break times to maximize productivity
- Allocating budget slots for capital expenditures
Correct answer: Repositioning SKUs within the warehouse to reduce travel time and improve ergonomics based on pick frequency
Slotting optimization relocates fast-moving items to prime, easily accessible locations and groups frequently co-picked items, reducing picker travel distance.
COP Inventory Control & Fulfillment Procedures 3
A company ships fragile electronics using UPS.
The package is damaged in transit.
Which party must file the carrier damage claim?