CPIM Distribution Planning 5

Question 1

A company is experiencing high stockout rates at its regional DCs despite adequate central warehouse inventory. Which planning action would most directly address this?

Accepted Answer

Improve demand sensing and replenishment frequency at the regional DC level

Answer

Improving demand sensing and replenishment frequency at regional DCs ensures inventory is available where and when customers need it.

Question 2

Which cost trade-off is central to determining the optimal number of distribution centers in a network?

Accepted Answer

Transportation cost vs. facility and inventory cost

Answer

Adding DCs reduces outbound transportation costs but increases fixed facility costs and total inventory (more safety stock required), creating a classic trade-off.

Question 3

What is the primary purpose of a distribution resource plan (DRP) bill of distribution?

Accepted Answer

Mapping the supply chain network structure showing how inventory flows between locations

Answer

A bill of distribution defines the parent-child relationships between stocking locations, showing how replenishment flows from plants or central DCs to regional nodes.

Question 4

Reverse logistics in distribution planning primarily addresses:

Accepted Answer

Managing the return flow of goods from customers back through the supply chain

Answer

Reverse logistics encompasses processes for returns, repairs, refurbishment, recycling, and disposal of products flowing back from customers.

Question 5

When calculating the economic order quantity (EOQ) for a distribution center, increasing the holding cost rate will:

Accepted Answer

Decrease the EOQ

Answer

EOQ = sqrt(2DS/H); as holding cost H increases, the denominator grows and EOQ decreases, favoring smaller, more frequent orders.

(CPIM) Certified in Planning and Inventory Management Practice Test

(CPIM) Certified in Planning and Inventory Management Practice Test

CPIM Distribution Planning 5