CPIM Distribution, Logistics, and Global Supply Chain 2

Question 1

What is the key principle behind 'vendor-managed inventory' (VMI)?

Accepted Answer

The supplier monitors the customer's inventory levels and takes responsibility for replenishment decisions

Answer

In VMI, the supplier has access to the customer's inventory data and is responsible for maintaining agreed-upon stock levels, reducing the customer's ordering burden and improving replenishment efficiency.

Question 2

ABC inventory classification is based on:

Accepted Answer

Annual usage value, with A items being the highest-value items

Answer

ABC analysis classifies inventory by annual usage value (unit cost × annual volume), with A items typically representing 20% of SKUs but 80% of value, requiring tighter control.

Question 3

What is 'total cost of quality' composed of?

Accepted Answer

Prevention costs, appraisal costs, and internal and external failure costs

Answer

Total cost of quality (COQ) includes prevention costs (avoiding defects), appraisal costs (detecting defects), internal failure costs (defects caught inside), and external failure costs (defects reaching customers).

Question 4

Which global trade concept allows goods to be stored in a bonded facility without paying import duties until they are entered into commerce?

Accepted Answer

Foreign trade zone (FTZ)

Answer

A Foreign Trade Zone (FTZ) is a designated area where goods can be stored, manipulated, or manufactured without formal customs entry, deferring or reducing duty payments.

Question 5

In supply chain risk management, 'supply chain resilience' refers to:

Accepted Answer

The capacity to prepare for, withstand, and recover from disruptions to supply chain continuity

Answer

Supply chain resilience is the adaptive capability to prepare for unexpected events, respond to disruptions, and recover to the original or a better state of operations.

CPIM - Certified in Production and Inventory Management Practice Test

CPIM - Certified in Production and Inventory Management Practice Test

CPIM Distribution, Logistics, and Global Supply Chain 2