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Supply Planning & Procurement Processes 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 Supply Planning & Procurement Processes flashcards as text

  1. A company's supplier delivers 480 units when 500 were ordered. What is the supplier's fill rate?

    Answer: 96%

    Fill rate = units delivered / units ordered = 480/500 = 96%.

  2. Which procurement strategy involves a long-term agreement with a single supplier to obtain favorable pricing and priority service?

    Answer: Sole sourcing

    Sole sourcing establishes a long-term relationship with one supplier, often yielding better pricing and service levels.

  3. In MRP, what triggers a planned order release for a purchased component?

    Answer: When net requirements exceed available inventory after offsetting by lead time

    MRP offsets net requirements by lead time to determine when a planned order must be released.

  4. Which of the following best describes a blanket purchase order?

    Answer: An open order authorizing repeated deliveries of a commodity over a set period

    A blanket PO authorizes the supplier to make multiple deliveries of a specified item over a defined period at agreed-upon terms.

  5. A buyer negotiates a 2/10 net 30 payment term. What does '2/10' mean?

    Answer: A 2% discount if paid within 10 days

    2/10 net 30 means a 2% discount is available if the invoice is paid within 10 days; otherwise full payment is due in 30 days.

  6. Which supply planning input directly converts the MPS into time-phased material requirements?

    Answer: Material Requirements Planning (MRP)

    MRP explodes the MPS through the bill of materials to generate time-phased component requirements.

  7. What is the primary purpose of a vendor-managed inventory (VMI) arrangement?

    Answer: To allow the supplier to monitor stock levels and replenish without buyer-initiated purchase orders

    VMI gives the supplier visibility into the buyer's inventory and authorizes them to replenish automatically, reducing buyer administrative burden.