CPP CPP Inventory & Logistics Management 2

Question 1

What is a 'stockout' in inventory management?

Accepted Answer

A situation where inventory is depleted and customer demand cannot be fulfilled

Answer

A stockout occurs when available inventory reaches zero and incoming orders or demand cannot be fulfilled, potentially resulting in lost sales.

Question 2

What is the primary purpose of a Warehouse Management System (WMS)?

Accepted Answer

To optimize warehouse operations including inventory tracking, receiving, storage, and order fulfillment

Answer

A WMS is software that manages and optimizes all warehouse activities including inventory tracking, space utilization, labor management, and order fulfillment.

Question 3

What is 'cross-docking' in logistics?

Accepted Answer

Transferring goods directly from inbound transportation to outbound transportation with minimal or no storage time

Answer

Cross-docking moves products directly from receiving docks to outbound shipping docks, virtually eliminating warehousing time and reducing handling costs.

Question 4

What does 'lead time' mean in procurement and logistics?

Accepted Answer

The total elapsed time from placing a purchase order to receiving the goods

Answer

Lead time is the total time from when a purchase order is issued until the ordered goods are received and available for use.

Question 5

What is the core principle of 'just-in-time' (JIT) inventory?

Accepted Answer

Receiving goods as close as possible to when they are actually needed to minimize holding costs

Answer

JIT is an inventory strategy where materials arrive precisely when needed, minimizing storage costs, waste, and working capital tied up in stock.

CPP - Certified Procurement Professional Practice Test

CPP - Certified Procurement Professional Practice Test

CPP CPP Inventory & Logistics Management 2