Inventory Control & Supply Chain Management Flashcards
7 cards from real MRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Inventory Control & Supply Chain Management flashcards as text
What is the primary function of a 'cross-docking' facility in supply chain logistics?
Answer: Transfer of inbound shipments directly to outbound transportation with minimal storage
Cross-docking transfers products from inbound trucks directly to outbound trucks, bypassing storage and reducing handling time and warehouse costs.
Which inventory control technique involves counting a small subset of inventory items each day on a rotating schedule throughout the year?
Answer: Cycle counting
Cycle counting divides inventory into segments and counts a portion each day, providing ongoing accuracy verification without shutting down operations for a full count.
A manufacturer uses a two-bin inventory system for a low-value fastener. What triggers a replenishment order in this system?
Answer: When the first bin is emptied and the second bin begins to be used
In a two-bin system, the first bin holds cycle stock and the second holds safety/reorder stock; emptying the first bin signals the need to reorder.
Which supply chain disruption response strategy involves maintaining relationships with pre-qualified backup suppliers who are not regularly used?
Answer: Supplier pre-qualification with dormant capacity
Maintaining pre-qualified backup suppliers provides a ready alternative source that can be activated quickly during primary supplier disruptions without qualification delays.
In the context of MRP, what is a 'firm planned order' (FPO)?
Answer: A planned order manually frozen to prevent automatic rescheduling by the MRP system
A firm planned order is locked by a planner to protect it from automatic changes by the MRP system, useful when the planner has commitments or special conditions to honor.
What is 'shrinkage' in the context of retail inventory management?
Answer: Inventory loss due to theft, damage, or administrative errors
Inventory shrinkage is the difference between recorded book inventory and actual physical inventory, caused by shoplifting, employee theft, vendor fraud, or administrative errors.
A company ships goods using Incoterms 'FOB Destination.' Who bears the risk of loss during transit?
Answer: The seller, until goods are delivered to the buyer's named destination
Under FOB Destination, the seller retains title and risk of loss until the goods are delivered to and accepted at the buyer's specified destination.