Practice Test Geeks(CPM) Certified Plant Manager Practice Test
← All CPM Flashcard Decks

Procurement & JIT Inventory Flashcards

7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Procurement & JIT Inventory flashcards as text

  1. A plant using JIT experiences a supplier quality failure that halts the production line. What does this event reveal about the JIT implementation?

    Answer: Supplier qualification and quality assurance processes were inadequate

    JIT's lack of buffer inventory amplifies the impact of supplier quality failures, exposing weaknesses in upstream supplier qualification and quality controls.

  2. What is the primary purpose of a supplier scorecard in procurement management?

    Answer: To objectively measure and track supplier performance across key criteria

    Supplier scorecards provide a structured, data-driven method to evaluate and track performance on quality, delivery, cost, and responsiveness over time.

  3. In supply chain management, what does 'demand amplification' (the bullwhip effect) result from?

    Answer: Small demand fluctuations that cause increasingly larger order swings upstream

    The bullwhip effect occurs when small consumer demand changes are progressively amplified into larger order variability as they move upstream through the supply chain.

  4. Which procurement approach best supports a lean manufacturing environment?

    Answer: Frequent small-lot deliveries synchronized with production schedules

    Lean manufacturing requires frequent, small deliveries timed to production needs to minimize inventory while ensuring continuous supply.

  5. A plant negotiates a 2% early payment discount (net 30, 2/10). What is the annualized cost of NOT taking this discount?

    Answer: Approximately 36%

    Using the formula: (2/98) × (360/20) ≈ 36.7%, forgoing a 2/10 net 30 discount carries roughly a 36% annualized cost of capital.

  6. What distinguishes a strategic supplier from a transactional supplier in a procurement portfolio?

    Answer: Strategic suppliers provide critical inputs where switching costs and supply risk are high

    Strategic suppliers provide items critical to operations with high switching costs or supply risk, warranting deeper relationships and collaboration.

  7. In a JIT pull system, production at each work center is triggered by:

    Answer: A downstream signal indicating actual consumption or demand

    JIT pull systems use downstream consumption signals (like kanban) to authorize production upstream, preventing overproduction.