MRP Inventory Control & Supply Chain Management 3

Question 1

Which inventory costing method assigns the most recent purchase costs to cost of goods sold during periods of rising prices?

Accepted Answer

LIFO

Answer

LIFO (Last-In, First-Out) assigns the most recently purchased (highest cost) inventory to COGS first, resulting in higher COGS and lower reported profit during inflation.

Question 2

A supply chain manager wants to reduce the total number of suppliers from 50 to 15. This strategy is known as:

Accepted Answer

Supplier consolidation

Answer

Supplier consolidation reduces the supplier base to gain leverage, simplify relationships, and potentially secure volume discounts.

Question 3

What does 'fill rate' measure in inventory management?

Accepted Answer

The percentage of customer demand met from available stock

Answer

Fill rate measures the proportion of customer orders or demand that can be satisfied immediately from on-hand inventory without backorders or lost sales.

Question 4

In supply chain risk management, what is a 'single-source' risk?

Accepted Answer

Purchasing all of a critical component from one supplier

Answer

Single-source risk occurs when a company depends on a single supplier for a critical component, making it vulnerable if that supplier experiences disruptions.

Question 5

Which metric measures how efficiently a company uses its inventory by comparing cost of goods sold to average inventory?

Accepted Answer

Inventory turnover ratio

Answer

Inventory turnover ratio = COGS ÷ Average Inventory, indicating how many times inventory is sold and replaced over a period.

(MRP) MRP Certified Agents Practice Test

(MRP) MRP Certified Agents Practice Test

MRP Inventory Control & Supply Chain Management 3