CPT Inventory Management & Supply Chain 3

Question 1

A Bill of Materials (BOM) primarily documents:

Accepted Answer

All raw materials, components, and subassemblies needed to produce a product

Answer

Supplier payment terms and lead times

Answer

Quality inspection criteria for finished goods

Answer

Work instructions for assembly personnel

Question 2

Material Requirements Planning (MRP) is primarily used to:

Accepted Answer

Determine what materials are needed, in what quantities, and when to order them

Answer

Evaluate employee performance on the production floor

Answer

Track quality defects through the production process

Answer

Manage preventive maintenance schedules for equipment

Question 3

The primary cost disadvantage of holding excess inventory is:

Accepted Answer

Higher carrying costs including storage, insurance, and obsolescence risk

Answer

Reduced supplier lead times

Answer

Lower product quality standards over time

Answer

Decreased employee productivity on the floor

Question 4

Under 'FOB Destination' shipping terms, when does ownership transfer to the buyer?

Accepted Answer

When the goods are delivered to the buyer's specified location

Answer

When the carrier picks up the shipment from the seller

Answer

When the invoice is issued by the seller

Answer

When the goods cross the state line

Question 5

A 'stockout' occurs when:

Accepted Answer

Demand cannot be met because inventory has been fully depleted

Answer

Inventory levels exceed available storage capacity

Answer

A supplier delivers incorrect goods to the warehouse

Answer

Expired inventory is removed and written off

Question 6

Kanban is a lean inventory tool that primarily uses:

Accepted Answer

Visual signals to trigger production or movement of materials

Answer

Statistical formulas to set optimal reorder quantities

Answer

Electronic sensors to automatically detect low stock levels

Answer

Barcodes to track inventory locations throughout the facility

Question 7

Which warehouse practice ensures older inventory is picked and used before newer stock to reduce spoilage and obsolescence?

Accepted Answer

FIFO (First-In, First-Out) rotation

Answer

Cross-docking rotation

Answer

Dropshipping sequencing

Answer

Just-in-time delivery scheduling