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

A BOM is a structured list of every material, component, and subassembly required to manufacture a finished product, serving as a foundation for procurement and production planning.

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

MRP uses production schedules and BOMs to calculate material requirements and generate purchase or work orders at the right time.

Question 3

The primary cost disadvantage of holding excess inventory is:

Accepted Answer

Higher carrying costs including storage, insurance, and obsolescence risk

Answer

Excess inventory ties up capital and incurs ongoing carrying costs such as warehouse space, insurance, deterioration, and the risk of obsolescence.

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

FOB Destination means the seller retains title and risk of loss until goods physically arrive at the buyer's specified delivery location.

Question 5

A 'stockout' occurs when:

Accepted Answer

Demand cannot be met because inventory has been fully depleted

Answer

A stockout means inventory has run out and customer demand or production requirements cannot be fulfilled until more stock arrives.

(CPT) Certified Production Technician Practice Test

(CPT) Certified Production Technician Practice Test

CPT Inventory Management & Supply Chain 3