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

Days of Supply is calculated as inventory on hand divided by average daily demand, indicating how long current stock will last before a stockout occurs.

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

Decoupling inventory is positioned between dependent operations to separate them, allowing each work center to operate at its own pace without being constrained by upstream or downstream rates.

Question 3

What is pipeline inventory?

Accepted Answer

Inventory that is currently in transit between supply chain locations

Answer

Pipeline inventory consists of items that are actively moving through the supply chain—in transit between a supplier, plant, warehouse, or customer—and thus tied up and not yet available.

Question 4

Anticipation inventory is primarily built up to handle which situation?

Accepted Answer

Predictable seasonal or promotional demand surges

Answer

Anticipation inventory is accumulated ahead of a known demand increase—such as a holiday season or a major promotion—so production can run at a stable rate beforehand.

Question 5

What does the inventory-to-sales ratio measure?

Accepted Answer

Inventory value as a proportion of total sales revenue

Answer

The inventory-to-sales ratio expresses the value of inventory held relative to sales revenue, helping management assess whether inventory investment is proportionate to business volume.

CPIM - Certified in Production and Inventory Management Practice Test

CPIM - Certified in Production and Inventory Management Practice Test

CPIM Inventory Management and Control 3