CPIM (Basics of Supply Chain Management) 5

Question 1

Which inventory policy triggers a replenishment order when on-hand inventory falls to a predetermined level, regardless of the time period?

Accepted Answer

Continuous review (Q) system

Answer

A continuous review (Q) system monitors inventory constantly and places a fixed order quantity whenever the reorder point is reached.

Question 2

In supply chain network design, a 'hub-and-spoke' configuration primarily offers:

Accepted Answer

Consolidated shipments through central hubs to reduce per-unit transportation costs

Answer

Hub-and-spoke networks consolidate shipments at central hubs to achieve economies of scale in transportation, trading speed for lower cost.

Question 3

Which term describes the practice of a supplier holding inventory at or near the customer's facility and retaining ownership until the customer uses it?

Accepted Answer

Consignment inventory

Answer

Consignment inventory means the supplier owns the goods until consumed by the customer, transferring financial risk to the supplier.

Question 4

A company's supply chain has a 'demand-driven' design. This means production is primarily triggered by:

Accepted Answer

Actual customer orders or point-of-sale signals

Answer

Demand-driven supply chains use real customer demand signals (pull) rather than forecasts (push) to trigger production and replenishment.

Question 5

When evaluating total cost of ownership (TCO) for a sourcing decision, which factor is often OVERLOOKED when only considering purchase price?

Accepted Answer

Hidden costs such as quality failures, transportation, and supplier management

Answer

TCO analysis reveals costs beyond purchase price, including quality, logistics, ordering, holding, and risk costs that impact true sourcing cost.

CPIM - Certified in Production and Inventory Management Practice Test

CPIM - Certified in Production and Inventory Management Practice Test

CPIM (Basics of Supply Chain Management) 5