Distribution Planning Flashcards
7 cards from real CPIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Distribution Planning flashcards as text
In a hub-and-spoke distribution network, the primary function of the hub is to:
Answer: Consolidate and sort shipments for redistribution to spoke locations
Hubs act as consolidation and sorting points that receive shipments from spokes or suppliers and redistribute them to their destinations.
The 'bullwhip effect' in distribution occurs when:
Answer: Demand signals are amplified as they move upstream in the supply chain
The bullwhip effect describes how small demand variability at the retail level becomes amplified into large order swings at upstream tiers.
Which type of distribution channel involves goods flowing from manufacturer to wholesaler to retailer to consumer?
Answer: Two-level channel
A two-level channel has two intermediaries (wholesaler and retailer) between the manufacturer and end consumer.
Pool distribution is most beneficial when:
Answer: Multiple customers in the same region receive less-than-truckload shipments
Pool distribution consolidates LTL shipments destined for the same region, reducing per-unit transportation cost through consolidation.
Which distribution strategy should a company prioritize when customer service level is the primary competitive advantage?
Answer: Position inventory geographically to reduce order cycle time
When service is the key differentiator, positioning inventory near customers reduces lead time and improves fill rates.
A third-party logistics (3PL) provider offers the primary advantage of:
Answer: Variable cost structure and specialized expertise without capital investment
3PLs convert fixed logistics costs to variable costs and provide expertise, technology, and network scale without requiring capital investment.
Which replenishment approach uses actual customer sales data transmitted from point-of-sale to trigger replenishment orders automatically?
Answer: Continuous replenishment program (CRP)
CRP uses real POS data shared by retailers to allow suppliers to automatically replenish store inventory based on actual consumption.