CSCP Inventory Management 3

Question 1

What does 'service level' mean in the context of inventory management?

Accepted Answer

The probability of not having a stockout during a replenishment cycle

Answer

The speed at which customer orders are processed

Answer

The percentage of orders delivered on time

Answer

The ratio of in-stock to total SKUs in a warehouse

Question 2

The 'two-bin' inventory system is an example of which replenishment approach?

Accepted Answer

Continuous review with a fixed reorder point (Q system)

Answer

Periodic review with a fixed review interval (P system)

Answer

Just-in-time replenishment

Answer

Vendor-managed inventory

Question 3

Which of the following best reduces the risk of supply chain disruption from a single critical component?

Accepted Answer

Maintaining strategic inventory buffers and qualifying alternative suppliers

Answer

Reducing the number of suppliers to consolidate purchasing power

Answer

Eliminating safety stock to reduce holding costs

Answer

Implementing just-in-time delivery for all components

Question 4

What is the primary impact of reducing inventory lead time on safety stock requirements?

Accepted Answer

Shorter lead times allow lower safety stock levels because there is less uncertainty to buffer against

Answer

Shorter lead times require more safety stock to cover the faster replenishment cycles

Answer

Lead time has no direct effect on safety stock calculations

Answer

Shorter lead times eliminate the need for any form of buffer inventory

Question 5

In supply chain management, 'postponement' of inventory differentiation helps to:

Accepted Answer

Reduce total inventory investment by holding generic stock longer and differentiating closer to actual demand

Answer

Increase production efficiency by standardizing all finished goods

Answer

Eliminate the need for demand forecasting

Answer

Speed up customer delivery by pre-building all variants

Question 6

What is 'pipeline inventory' in supply chain management?

Accepted Answer

Inventory that is in transit between supply chain nodes and has not yet reached its destination

Answer

Inventory stored in underground pipeline distribution systems

Answer

Work-in-process inventory on the production floor

Answer

Inventory designated for future promotional campaigns