CPL Inventory Control & Demand Planning 3

Question 1

Which type of demand is derived from the demand for a finished product?

Accepted Answer

Dependent demand

Answer

Dependent demand for components and raw materials is calculated directly from the production schedule for parent items.

Question 2

A 'stockout' most directly results in which of the following costs?

Accepted Answer

Lost sales and customer dissatisfaction

Answer

Stockouts cause lost revenue, emergency purchasing premiums, and long-term damage to customer relationships and loyalty.

Question 3

The bullwhip effect in supply chains is primarily caused by:

Accepted Answer

Demand signal distortion as orders move upstream

Answer

Small fluctuations in consumer demand become amplified as each upstream tier adds its own safety stock buffer, creating large order swings.

Question 4

Which inventory valuation method results in the highest Cost of Goods Sold during periods of rising prices?

Accepted Answer

LIFO (Last-In, First-Out)

Answer

LIFO assigns the most recently purchased (highest-cost) items to COGS first, maximizing cost expenses when prices are rising.

Question 5

What is the purpose of a min-max inventory control system?

Accepted Answer

To maintain inventory between a minimum trigger point and a maximum target level

Answer

In a min-max system, an order is triggered when inventory falls to the minimum level, and the order quantity brings stock up to the maximum level.

(CPL) Certified Professional Logistician Practice Test