Supply Chain and Inventory Management Flashcards
7 cards from real ERP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Supply Chain and Inventory Management flashcards as text
Which inventory valuation method assumes that the most recently purchased items are the first ones sold?
Answer: LIFO
LIFO (Last-In, First-Out) assumes the most recently acquired inventory is sold first, which can result in lower taxable income during inflationary periods.
What is the primary benefit of Vendor-Managed Inventory (VMI) in an ERP environment?
Answer: Supplier monitors and replenishes buyer inventory autonomously
In VMI, the supplier uses shared demand and inventory data to manage replenishment, reducing buyer administrative burden and improving service levels.
A supply chain team wants to reduce lead time variability from a key supplier. Which ERP-supported approach is MOST effective?
Answer: Implement supplier scorecards and collaborative forecasting via EDI
Supplier scorecards and collaborative EDI-based forecasting give both parties visibility into demand and performance, directly reducing lead time variability at the source.
In the context of ERP supply chain planning, what does 'decoupling point' refer to?
Answer: The point in the supply chain where make-to-stock switches to make-to-order
The decoupling point (also called the customer order decoupling point) separates the forecast-driven upstream supply chain from the demand-driven downstream fulfillment process.
Which metric best evaluates a supplier's ability to deliver the correct quantity on the agreed date?
Answer: On-Time In-Full (OTIF) rate
OTIF measures the percentage of supplier deliveries that arrive on time AND in the full quantity ordered, capturing both timeliness and completeness.
A company implements a two-bin kanban system in its ERP. What triggers a replenishment order?
Answer: The first bin is emptied and the second bin is opened for use
In a two-bin kanban system, consumption of the first bin triggers a replenishment order while the second bin covers demand during the replenishment lead time.
Which supply chain risk mitigation strategy involves qualifying multiple suppliers for the same component?
Answer: Dual/multi-sourcing
Dual or multi-sourcing distributes procurement across more than one supplier to reduce dependence on any single source and lower supply disruption risk.