ERP Supply Chain and Inventory Management 2

Question 1

Which inventory replenishment strategy triggers an order only when stock falls to a predetermined reorder point?

Accepted Answer

Continuous review system

Answer

A continuous review system (also called a fixed-order-quantity system) monitors inventory continuously and places an order whenever the reorder point is reached.

Question 2

In ERP supply chain modules, what does the term 'bullwhip effect' describe?

Accepted Answer

Demand signal amplification upstream through the supply chain

Answer

The bullwhip effect refers to increasing swings in inventory orders up the supply chain as small demand fluctuations are amplified at each tier.

Question 3

A company uses ABC analysis for inventory classification. Which class typically represents the fewest SKUs but the highest annual spend?

Accepted Answer

Class A

Answer

Class A items represent roughly 10-20% of SKUs but account for approximately 70-80% of total annual inventory value.

Question 4

What is the primary purpose of safety stock in an ERP inventory system?

Accepted Answer

Buffer against demand variability and supply uncertainty

Answer

Safety stock acts as a buffer to protect against stockouts caused by unpredictable demand spikes or supplier delivery delays.

Question 5

Which supply chain metric measures the percentage of customer orders fulfilled completely and on time?

Accepted Answer

Perfect order rate

Answer

The perfect order rate measures the percentage of orders delivered complete, on time, damage-free, and with accurate documentation.

(ERP) Enterprise Resource Planning Certified Practice Test

(ERP) Enterprise Resource Planning Certified Practice Test

ERP Supply Chain and Inventory Management 2