Practice Test Geeks(CPIM) Certified in Planning and Inventory Management Practice Test
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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.

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  1. The Distribution Requirements Planning (DRP) system extends MRP logic to distribution by:

    Answer: Planning time-phased replenishment orders across the distribution network

    DRP applies MRP time-phasing logic to distribution, netting demand against on-hand inventory and planned receipts to generate replenishment orders.

  2. A company decides to implement vendor-managed inventory (VMI). Who takes responsibility for maintaining stock levels at the customer's location?

    Answer: The supplier or vendor

    In VMI, the supplier monitors the customer's inventory levels and takes responsibility for replenishment decisions within agreed parameters.

  3. Which of the following best describes 'postponement' as a distribution strategy?

    Answer: Delaying final product configuration or customization until closer to the point of demand

    Postponement delays differentiation activities (labeling, assembly, customization) until actual demand is known, reducing finished goods inventory risk.

  4. Collaborative Planning, Forecasting and Replenishment (CPFR) is designed to:

    Answer: Align trading partners through shared data and joint forecasting to improve supply chain performance

    CPFR is a collaborative business model where trading partners share forecasts, plans, and data to improve forecast accuracy and reduce stockouts.

  5. In distribution planning, 'dead stock' refers to:

    Answer: Slow-moving or obsolete inventory with no recent customer demand

    Dead stock is inventory that has not sold or moved within a defined period and may represent excess, obsolete, or discontinued items.

  6. Which transportation mode offers the lowest cost per ton-mile for large volume, non-urgent domestic shipments?

    Answer: Rail

    Rail offers the lowest cost per ton-mile for high-volume, non-time-sensitive shipments, especially for bulk commodities over long distances.

  7. The 'last mile' in distribution refers to:

    Answer: The last segment of delivery from a local distribution point to the end customer

    Last-mile delivery is the final leg of the supply chain — from a local hub or DC to the end customer — and is often the most expensive and complex segment.