Supply Chain Management Inventory Management 5

Question 1

Which KPI measures the percentage of customer orders that are fulfilled completely from available stock without backorders?

Accepted Answer

Fill Rate

Answer

Fill rate measures the proportion of orders or order lines that can be satisfied immediately from on-hand inventory without causing a stockout or backorder.

Question 2

In supply chain management, 'postponement' as an inventory strategy refers to:

Accepted Answer

Deferring product customization or differentiation until closer to actual customer demand

Answer

Postponement delays value-adding activities (assembly, labeling, customization) until actual demand is known, reducing the risk of holding finished goods that may not match demand.

Question 3

A manufacturer uses Material Requirements Planning (MRP). Which input does MRP primarily use to calculate net material requirements?

Accepted Answer

Bill of Materials (BOM), master production schedule, and current inventory records

Answer

MRP uses the Master Production Schedule (MPS), Bill of Materials (BOM), and Inventory Records to calculate when and how much material to order.

Question 4

What is the primary risk associated with single-sourcing a critical inventory item?

Accepted Answer

Increased supply disruption vulnerability if the sole supplier fails

Answer

Relying on a single supplier creates concentration risk — any disruption to that supplier's operations (natural disaster, financial failure, capacity issues) can halt supply entirely.

Question 5

Which of the following describes 'cross-docking' and its impact on inventory?

Accepted Answer

Moving goods from receiving directly to outbound shipping with minimal or no storage time

Answer

Cross-docking transfers inbound shipments directly to outbound vehicles, virtually eliminating storage time and reducing inventory holding costs.

Supply Chain Management Practice Test

Supply Chain Management Practice Test

Supply Chain Management Inventory Management 5