APP Inventory, Logistics & Supply Chain Management 1 — Questions and Answers
Question 1: What is the main goal of inventory management?
- Maximize storage costs
- Minimize product availability
- Reduce taxes
- Balance cost and service level (Correct answer)
Correct answer: Balance cost and service level
Inventory management aims to balance the cost of inventory with the service level to ensure product availability without overstocking.
Question 2: What is the Economic Order Quantity (EOQ) model used for?
- Set reorder points
- Forecast future sales
- Optimize order size (Correct answer)
- Track shipments
Correct answer: Optimize order size
EOQ determines the optimal order quantity that minimizes total inventory costs including ordering and holding costs.
Question 3: What does Just-in-Time (JIT) inventory management aim to reduce?
- Production capacity
- Inventory waste (Correct answer)
- Employee workload
- Customer service
Correct answer: Inventory waste
JIT minimizes inventory levels by receiving goods only when they are needed, reducing carrying costs and waste.
Question 4: Which function is most associated with logistics?
- Product design
- Supplier evaluation
- Goods transportation (Correct answer)
- Customer research
Correct answer: Goods transportation
Logistics focuses on the planning, movement, and storage of goods throughout the supply chain.
Question 5: Which of the following best describes the supply chain?
- Only warehousing operations
- Retail sales systems
- Manufacturing alone
- All steps from sourcing to delivery (Correct answer)
Correct answer: All steps from sourcing to delivery
The supply chain includes all activities involved in producing and delivering a product from raw materials to the final customer.
Question 6: Why is supply chain integration important?
- To increase silos
- To reduce communication
- To improve coordination (Correct answer)
- To complicate logistics
Correct answer: To improve coordination
Integration improves coordination and visibility across the chain, reducing costs and improving responsiveness.
APP Inventory, Logistics & Supply Chain Management 1
What is the main goal of inventory management?