CPIM - Certified in Planning and Inventory Management Distribution Planning Questions and Answers

Question 1

Which of the following best describes the core logic of Distribution Requirements Planning (DRP)?

Accepted Answer

It calculates future requirements for distribution centers by applying MRP principles, starting from the end-customer forecast and working up the supply chain.

Answer

DRP uses the same time-phased logic as MRP but applies it to the distribution network. It starts with the forecast at the lowest level (e.g., retail store or regional DC) and uses that demand to calculate replenishment needs for the next level up the chain, all the way back to the central warehouse or factory.

Question 2

A medical device company needs to transport a small, high-value, and extremely time-sensitive surgical robot for an emergency procedure at a hospital across the country. Which mode of transportation would be the MOST appropriate choice?

Accepted Answer

Air freight

Answer

Air freight is the fastest mode of transportation for long distances and is best suited for high-value, time-sensitive shipments where the high cost is justified by the urgency and value of the goods. Road, rail, and ocean transport would be too slow for this type of emergency requirement.

Question 3

A distribution center's primary function is to receive truckloads of pre-packaged, pre-sorted products from multiple suppliers and immediately load them onto outbound trucks for delivery to retail stores, often in less than 24 hours. This practice, which minimizes storage and inventory holding, is best described as:

Accepted Answer

Cross-docking

Answer

Cross-docking is a logistics procedure where products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with minimal to no handling or storage time. It involves unloading materials from an incoming vehicle and loading them directly into outbound vehicles.

Question 4

A national retailer decides to increase the number of its regional distribution centers (DCs) to move inventory closer to its stores. What is the MOST likely impact of this change on its logistics network?

Accepted Answer

Increased total safety stock and decreased outbound transportation costs.

Answer

Adding more DCs places inventory closer to customers, which reduces outbound transportation costs and improves delivery lead times. However, according to the principle of risk pooling (square root rule), decentralizing inventory across more locations increases the total amount of safety stock required in the system to maintain the same service level.

Question 5

In a well-integrated planning system, the output from Distribution Requirements Planning (DRP) serves as a critical input for which of the following processes?

Accepted Answer

The Master Production Schedule (MPS)

Answer

The DRP system calculates the time-phased replenishment requirements for finished goods across the entire distribution network. The sum of these requirements, particularly the planned orders at the central warehouse or plant level, represents the total demand that manufacturing must produce. This demand stream is a primary input to the Master Production Schedule (MPS).

(CPIM) Certified in Planning and Inventory Management Practice Test

(CPIM) Certified in Planning and Inventory Management Practice Test

CPIM - Certified in Planning and Inventory Management Distribution Planning Questions and Answers