CPT Inventory Management & Supply Chain 5 — Questions and Answers
Question 1: A manufacturer experiences a sudden 40% spike in customer orders. Under which inventory replenishment approach would production most likely struggle to respond quickly?
- Kanban-controlled pull system
- Make-to-Stock with large safety stock
- Vendor-Managed Inventory (VMI)
- Just-in-Time (JIT) with minimal buffer stock (Correct answer)
Correct answer: Just-in-Time (JIT) with minimal buffer stock
JIT systems minimize buffer inventory, so a sudden demand surge cannot be absorbed from stock and requires rapid supply chain response that may not be achievable.
Question 2: In supply chain management, what is 'demand sensing' used for?
- Detecting theft and shrinkage at warehouse facilities
- Using near-real-time data to improve short-term demand forecasts (Correct answer)
- Measuring customer satisfaction with order fulfillment
- Identifying which suppliers are most responsive to orders
Correct answer: Using near-real-time data to improve short-term demand forecasts
Demand sensing uses point-of-sale data, shipment data, and analytics to detect actual demand patterns in near real-time, improving short-term forecast accuracy.
Question 3: A production technician is performing a cycle count and finds 47 units physically present but the system shows 52 units. What is the correct first action?
- Immediately adjust the system record to 47 units
- Recount the physical inventory to verify the discrepancy (Correct answer)
- Assume the system is correct and recount until 52 are found
- Write off the 5-unit difference as shrinkage
Correct answer: Recount the physical inventory to verify the discrepancy
Before making any system adjustment, a recount should verify the physical count is accurate, as counting errors are a common source of apparent discrepancies.
Question 4: Which of the following best describes 'postponement' as a supply chain strategy?
- Delaying supplier payments to improve cash flow
- Deferring final product customization until closer to customer demand (Correct answer)
- Postponing production until raw material prices decrease
- Delaying shipments to consolidate freight and reduce costs
Correct answer: Deferring final product customization until closer to customer demand
Postponement delays product differentiation or customization to the latest possible point in the supply chain, reducing risk of holding wrong finished goods inventory.
Question 5: A company's supplier scorecard shows an on-time delivery rate of 72%. What is the most direct negative impact on the buyer's operations?
- Increased finished goods inventory turnover
- Higher required safety stock to buffer against late deliveries (Correct answer)
- Reduced need for cycle counting procedures
- Lower warehouse storage costs
Correct answer: Higher required safety stock to buffer against late deliveries
Poor on-time delivery forces the buyer to hold additional safety stock to maintain production continuity despite unreliable supply, increasing inventory carrying costs.
Question 6: What is the key operational difference between a 'push' and 'pull' inventory replenishment system?
- Push systems use barcodes; pull systems use RFID technology
- Push replenishes based on forecasts; pull replenishes based on actual consumption (Correct answer)
- Push is used for raw materials; pull is used for finished goods only
- Push requires EDI connections; pull uses manual purchase orders
Correct answer: Push replenishes based on forecasts; pull replenishes based on actual consumption
Push systems use demand forecasts to proactively send inventory downstream, while pull systems replenish only when actual consumption signals a need, as in kanban.
Question 7: A production facility receives components from three suppliers, all with different lead times. Which inventory planning approach best handles this multi-supplier variability?
- Use a single average lead time for all three suppliers in MRP
- Maintain separate item master lead times per supplier and use supplier-specific planning (Correct answer)
- Order all components from the supplier with the shortest lead time only
- Set reorder points based on the longest lead time across all suppliers for all items
Correct answer: Maintain separate item master lead times per supplier and use supplier-specific planning
Maintaining supplier-specific lead times in the item master ensures MRP calculates accurate order release dates for each source, preventing both stockouts and excess inventory.
CPT Inventory Management & Supply Chain 5
A manufacturer experiences a sudden 40% spike in customer orders.
Under which inventory replenishment approach would production most likely struggle to respond quickly?