CPIM Inventory Management and Control 3

Question 1

What does the Days of Supply (DOS) metric indicate?

Accepted Answer

How many days current inventory will satisfy demand at current usage rates

Answer

The number of days to receive a replenishment order

Answer

The lead time from supplier to distribution center

Answer

The number of days between formal inventory audits

Question 2

Which type of inventory is placed between two work centers to allow each operation to run independently at its own rate?

Accepted Answer

Decoupling (buffer) inventory

Answer

Safety stock

Answer

Anticipation inventory

Answer

Work-in-process (WIP)

Question 3

What is pipeline inventory?

Accepted Answer

Inventory that is currently in transit between supply chain locations

Answer

Inventory stored in underground facilities

Answer

Inventory reserved for specific customers under long-term contracts

Answer

Inventory at the very beginning of a production process

Question 4

Anticipation inventory is primarily built up to handle which situation?

Accepted Answer

Predictable seasonal or promotional demand surges

Answer

Unexpected supplier delivery delays

Answer

Unplanned production line downtime

Answer

Emergency customer orders

Question 5

What does the inventory-to-sales ratio measure?

Accepted Answer

Inventory value as a proportion of total sales revenue

Answer

Inventory turnover velocity

Answer

Order fill rate percentage

Answer

Weeks of safety stock on hand

Question 6

What is the primary goal of Vendor-Managed Inventory (VMI)?

Accepted Answer

To transfer replenishment responsibility to the supplier

Answer

To eliminate all safety stock from the supply chain

Answer

To reduce the total number of approved suppliers

Answer

To increase order frequency and reduce batch sizes

Question 7

Which supply chain phenomenon describes how small fluctuations in end-consumer demand become amplified as orders move upstream toward suppliers?

Accepted Answer

The bullwhip effect

Answer

The ripple effect

Answer

Demand smoothing

Answer

The oscillation effect