CPIM Distribution Planning 2

Question 1

Which distribution network design strategy places inventory closer to end customers to reduce lead times?

Accepted Answer

Forward deployment

Answer

Forward deployment positions inventory at locations closer to customers, reducing transit time and improving service levels.

Question 2

A company's distribution center receives full truckloads from suppliers and immediately sorts and ships to retail stores without storing inventory. This is called:

Accepted Answer

Cross-docking

Answer

Cross-docking transfers inbound shipments directly to outbound vehicles with minimal or no storage, reducing handling and storage costs.

Question 3

The total cost of a distribution network includes which of the following cost components?

Accepted Answer

Transportation, warehousing, and inventory carrying costs

Answer

Total distribution network cost includes transportation, warehousing, inventory carrying costs, order processing, and customer service costs.

Question 4

When a single DC serves all customers across a large geography, what is the primary tradeoff compared to using multiple regional DCs?

Accepted Answer

Lower inventory costs but higher transportation costs

Answer

Centralization reduces inventory through risk pooling but increases outbound transportation costs due to greater distances to customers.

Question 5

Which metric measures the percentage of customer orders shipped complete and on time from available stock?

Accepted Answer

Perfect order rate

Answer

Perfect order rate measures orders delivered complete, on time, damage-free, and with accurate documentation, reflecting overall distribution performance.

(CPIM) Certified in Planning and Inventory Management Practice Test

(CPIM) Certified in Planning and Inventory Management Practice Test

CPIM Distribution Planning 2