CSCP FREE Certified Supply Chain Professional (CSCP) Internal Operations and Inventory Questions and Answers 2

Question 1

A manufacturing company uses a fixed-order-quantity system. When the inventory position drops to 500 units and the reorder point is 500 units, what action should the inventory manager take?

Accepted Answer

Place an order for the economic order quantity

Answer

In a fixed-order-quantity system, an order for the predetermined economic order quantity is placed whenever inventory position reaches the reorder point.

Question 2

Which of the following best describes the purpose of a master production schedule (MPS) in internal operations?

Accepted Answer

To determine the specific quantities and timing of end items to be produced

Answer

The MPS translates the aggregate production plan into a specific schedule of end items, specifying what to produce, in what quantities, and when.

Question 3

A company is evaluating its inventory carrying costs. Which cost component typically represents the largest portion of carrying costs?

Accepted Answer

Cost of capital tied up in inventory

Answer

The opportunity cost of capital invested in inventory is generally the largest component of carrying costs, often accounting for 50% or more of total holding costs.

Question 4

In the context of capacity planning, what does the term 'demonstrated capacity' refer to?

Accepted Answer

The proven capacity calculated from actual historical performance data

Answer

Demonstrated capacity is calculated from actual output data and historical performance records, making it the most reliable measure of what a work center can realistically produce.

Question 5

What is the primary benefit of implementing a vendor-managed inventory (VMI) program for internal operations?

Accepted Answer

Reduced stockout risk while lowering the buyer's inventory management burden

Answer

VMI shifts replenishment responsibility to the supplier, who monitors inventory levels and makes restocking decisions, reducing stockouts while freeing the buyer from day-to-day inventory management tasks.

Certified Supply Chain Professional CSCP Practice Practice Test

Certified Supply Chain Professional CSCP Practice Practice Test

CSCP FREE Certified Supply Chain Professional (CSCP) Internal Operations and Inventory Questions and Answers 2