CPM Inventory and Materials Management Flashcards
6 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 6 CPM Inventory and Materials Management flashcards as text
What is 'demand forecasting' used for in inventory and materials management?
Answer: Estimating future product demand to plan purchasing and stocking levels
Demand forecasting uses historical data and market analysis to predict future needs, helping purchasing managers optimize order quantities and timing.
Which of the following best describes a 'stockout'?
Answer: When a requested item is unavailable because inventory has been depleted
A stockout occurs when demand exceeds available supply, resulting in unfilled orders and potential lost business.
In the context of materials management, what is a Bill of Materials (BOM)?
Answer: A comprehensive list of raw materials and components needed to produce a product
A BOM is a structured list of all materials, components, and sub-assemblies required to manufacture a product.
What is the primary advantage of a vendor-managed inventory (VMI) arrangement?
Answer: The supplier takes responsibility for monitoring and replenishing the buyer's stock
In VMI, the supplier monitors the buyer's inventory levels and initiates replenishment, reducing the buyer's administrative burden and improving supply continuity.
What does 'lead time' refer to in purchasing and inventory management?
Answer: The elapsed time from placing an order to receiving the goods
Lead time is the total time between when a purchase order is placed and when the goods are received and available for use.
Which inventory management approach aims to eliminate waste and keep only the materials needed for immediate production?
Answer: Just-In-Time (JIT)
JIT inventory management minimizes waste and storage costs by delivering materials only when they are immediately needed in the production process.