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
A company is experiencing high stockout rates at its regional DCs despite adequate central warehouse inventory. Which planning action would most directly address this?
Answer: Improve demand sensing and replenishment frequency at the regional DC level
Improving demand sensing and replenishment frequency at regional DCs ensures inventory is available where and when customers need it.
Which cost trade-off is central to determining the optimal number of distribution centers in a network?
Answer: Transportation cost vs. facility and inventory cost
Adding DCs reduces outbound transportation costs but increases fixed facility costs and total inventory (more safety stock required), creating a classic trade-off.
What is the primary purpose of a distribution resource plan (DRP) bill of distribution?
Answer: Mapping the supply chain network structure showing how inventory flows between locations
A bill of distribution defines the parent-child relationships between stocking locations, showing how replenishment flows from plants or central DCs to regional nodes.
Reverse logistics in distribution planning primarily addresses:
Answer: Managing the return flow of goods from customers back through the supply chain
Reverse logistics encompasses processes for returns, repairs, refurbishment, recycling, and disposal of products flowing back from customers.
When calculating the economic order quantity (EOQ) for a distribution center, increasing the holding cost rate will:
Answer: Decrease the EOQ
EOQ = sqrt(2DS/H); as holding cost H increases, the denominator grows and EOQ decreases, favoring smaller, more frequent orders.
Which distribution center layout design is most efficient for a high-velocity, low-SKU-count operation?
Answer: Fixed storage with dedicated product locations and straight-through flow aisles
High-velocity, limited-SKU operations benefit from fixed, dedicated locations near shipping with straight-through flow to minimize travel time.
A company implements a 'push' distribution strategy. This means inventory is deployed based on:
Answer: Forecasted demand, with inventory pushed out to DCs before orders are placed
A push strategy deploys inventory to distribution points based on forecasts rather than waiting for actual demand signals.