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
A plant manager wants to implement cross-docking for inbound materials. What is the primary benefit?
Answer: Elimination or minimization of warehousing by transferring goods directly from inbound to outbound
Cross-docking routes inbound shipments directly to outbound vehicles with minimal or no storage time, reducing handling, storage costs, and lead time.
Which of the following best describes 'supplier development' in a lean procurement context?
Answer: Actively working with existing suppliers to improve their capabilities and performance
Supplier development involves direct investment of time and resources to help suppliers improve quality, delivery, and cost to meet the plant's evolving requirements.
What is the concept of 'takt time' and how does it relate to procurement planning?
Answer: The rate at which products must be produced to match customer demand, driving material delivery frequency
Takt time (available time ÷ customer demand) sets the production rhythm, which directly determines how frequently materials must be delivered to sustain the line.
A plant manager is evaluating whether to make or buy a subassembly. Which factor most strongly favors the 'buy' decision?
Answer: A supplier can produce it at significantly lower cost with better quality due to specialization
When a supplier achieves better cost and quality through specialization, the buy decision frees internal resources to focus on higher-value core competencies.
In JIT inventory management, 'heijunka' refers to:
Answer: Leveling production volume and mix to create smooth, predictable demand on suppliers
Heijunka (production leveling) smooths out demand variability on suppliers and upstream processes by producing a consistent mix and volume each day.
Which procurement document formally commits the buyer to purchase a specific quantity at a negotiated price from a chosen supplier?
Answer: Purchase order (PO)
A purchase order is a legally binding commercial document that commits the buyer to procure specified goods or services at agreed terms from the supplier.
A plant reduces its number of suppliers from 200 to 40 for a commodity category. This strategy is best described as:
Answer: Supply base rationalization
Supply base rationalization (or supply base reduction) consolidates purchasing volume with fewer, more capable suppliers to leverage scale and reduce management complexity.