CMRP Domain 2: Inventory Distribution Management Welcome to your CMRP Domain 2: Inventory Distribution Management 1. CMRP: Inventory & Distribution Management When implementing a Just-In-Time (JIT) inventory system, which of the following is the most critical factor to ensure its success? Maximizing inventory on hand Establishing robust relationships with multiple suppliers Reducing lead times to the minimum Increasing the safety stock levels None 2. CMRP: Inventory & Distribution Management In a two-bin inventory system, what triggers the order for new supplies? The first bin is emptied, and usage begins from the second bin. Inventory levels fall below the reorder point. The second bin is half empty. A fixed period has elapsed since the last order. None 3. CMRP: Inventory & Distribution Management Which inventory distribution management technique focuses on aligning inventory levels with the fluctuation in demand? FIFO (First In, First Out) LIFO (Last In, First Out) Demand forecasting Economic Order Quantity (EOQ) None 4. CMRP: Inventory & Distribution Management What is the primary goal of cross-docking in the distribution center environment? To increase the storage time of products To reduce material handling costs To maximize inventory holding To enhance the accuracy of inventory records None 5. CMRP: Inventory & Distribution Management Which of the following best describes the role of consignment inventory in supply chain management? The supplier retains ownership of the inventory until it is consumed or sold by the buyer. The buyer assumes ownership of the inventory as soon as it is shipped. Inventory is managed based on the FIFO method. The supplier pays for the inventory storage costs until the product is used. None 6. CMRP: Inventory & Distribution Management What is the primary objective of implementing a Vendor-Managed Inventory (VMI) system? To increase the buyer's inventory holding costs To allow the vendor to manage and replenish inventory based on actual demand To transfer all inventory risks to the vendor To eliminate the need for demand forecasting None 7. CMRP: Inventory & Distribution Management In the context of inventory accuracy, what does the term 'cycle counting' refer to? Counting the entire inventory at the end of the fiscal year A process where inventory is counted on a continuous cycle, rather than at a single point in time Counting only the high-value items in inventory A method of verifying the accuracy of inventory just before delivery None 8. CMRP: Inventory & Distribution Management Which strategy is most effective for managing inventory in a supply chain with high demand variability? Just-In-Time (JIT) Inventory Safety stock planning Economic Order Quantity (EOQ) First In, First Out (FIFO) None 9. CMRP: Inventory & Distribution Management In inventory management, what is the primary purpose of the ABC analysis? To categorize items based on their annual consumption value To determine the fixed order quantity for all items To identify products that should be discontinued To apply a uniform policy for inventory management across all items None 10. CMRP: Inventory & Distribution Management What is a primary advantage of using a centralized inventory management system over a decentralized one? Increased responsiveness to local market conditions Reduced transportation and handling costs Enhanced ability to manage and share resources across the organization Greater autonomy for local managers None 11. CMRP: Inventory & Distribution Management What inventory management principle focuses on identifying the root cause of inventory issues, rather than treating symptoms? Pareto principle Root Cause Analysis (RCA) Economic Order Quantity (EOQ) Just-In-Time (JIT) inventory None 12. CMRP: Inventory & Distribution Management In the realm of inventory management, what is the primary benefit of using the Economic Order Quantity (EOQ) model? It ensures the highest level of customer service. It determines the most cost-effective quantity to order, minimizing total inventory costs. It maximizes inventory turnover. It eliminates the need for safety stock. None 13. CMRP: Inventory & Distribution Management Which inventory strategy is specifically designed to cope with the challenge of highly unpredictable demand? JIT (Just-In-Time) VMI (Vendor Managed Inventory) Postponement ABC analysis None 14. CMRP: Inventory & Distribution Management What does the term 'bullwhip effect' describe in the context of supply chain and inventory management? The rapid decrease in demand as it moves up the supply chain The amplification of demand variability as it moves up the supply chain The reduction in lead times across the supply chain The consistent demand pattern observed at different stages of the supply chain None 15. CMRP: Inventory & Distribution Management In a 'pull' based supply chain model, which of the following is a primary driving factor? Supplier-driven production schedules Forecast-driven inventory levels Customer demand-driven production and distribution Fixed reorder points for all products None 16. CMRP: Inventory & Distribution Management Which of the following inventory management techniques is best suited for items that have irregular demand patterns and high importance? FIFO (First In, First Out) LIFO (Last In, First Out) Just-In-Time (JIT) ABC analysis combined with periodic review system None 17. CMRP: Inventory & Distribution Management In a supply chain, the process of synchronizing the flow of materials and information to reduce bottlenecks is known as: Cross-docking Supply chain synchronization Demand forecasting Integrated logistics None 18. CMRP: Inventory & Distribution Management What is the primary advantage of implementing an Advanced Planning and Scheduling (APS) system in inventory management? It eliminates the need for manual inventory counts. It provides a real-time view of inventory across the supply chain. It reduces the need for physical warehouse space. It automatically orders inventory based on historical data. None 19. CMRP: Inventory & Distribution Management Which principle of inventory management focuses on reducing waste and improving efficiency by continually identifying and eliminating non-value-added activities? Kanban Lean inventory management Six Sigma SKU rationalization None 20. CMRP: Inventory & Distribution Management In the context of inventory management, what does the term 'stockout' refer to? The replenishment of inventory to maximum levels The process of counting inventory The situation where inventory levels fall below the required minimum The optimization of inventory levels based on demand forecasting None 21. CMRP: Inventory & Distribution Management Which inventory management strategy involves storing products manufactured just in time to be shipped directly to customers, bypassing the need for long-term storage? Cross-docking Demand forecasting Economic order quantity Vendor-managed inventory None 22. CMRP: Inventory & Distribution Management What is the primary goal of employing a Distribution Requirements Planning (DRP) system in inventory management? To minimize the total cost of ownership To optimize warehouse storage space To synchronize inventory replenishment with demand across distribution centers To increase the speed of inventory turnover None 23. CMRP: Inventory & Distribution Management In inventory management, the term 'consignment inventory' refers to a scenario where: The inventory is owned by the supplier until it is used or sold by the consignee. The inventory is purchased in bulk and stored at a third-party location. The consignee owns the inventory as soon as it arrives at their facility. The inventory is managed without the need for physical counting. None 24. CMRP: Inventory & Distribution Management Which of the following is a primary benefit of utilizing Radio Frequency Identification 'RFID' in inventory management? It enables manual tracking of inventory items. It decreases the accuracy of inventory records. It allows for real-time tracking of inventory throughout the supply chain. It increases the need for physical inventory audits. None 25. CMRP: Inventory & Distribution Management What is the primary purpose of implementing a 'push' based supply chain model? To respond to specific customer demands in real-time To produce and distribute products based on historical demand data To eliminate inventory holdings altogether To allow customers to directly influence production schedules None 26. CMRP: Inventory & Distribution Management Which of the following best describes the role of an Inventory Control System? To maximize inventory levels at all times To solely focus on inventory reduction To manage and optimize inventory levels based on demand and supply To track only high-value inventory items None 27. CMRP: Inventory & Distribution Management In a supply chain, backordering is a strategy used when: A product is immediately available in inventory for shipment. A product is not in stock, but an order is taken and fulfilled when the stock becomes available. There is excess inventory that needs to be sold off quickly. All inventory must be kept at minimum levels. None 28. CMRP: Inventory & Distribution Management What does the term 'lead time' refer to in inventory management? The time it takes for a product to become obsolete The time from when an order is placed until it is received and ready for use or sale The duration of time inventory remains unsold The time needed to transport goods from one location to another None 29. CMRP: Inventory & Distribution Management Which technique in inventory management is primarily focused on minimizing the carrying cost of inventory? FIFO (First In, First Out) LIFO (Last In, First Out) JIT (Just-In-Time) ABC analysis None 30. CMRP: Inventory & Distribution Management The process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity is known as: Inventory optimization Demand forecasting Economic order quantity calculation Reorder point analysis None 1 out of 30 Time is Up! Time's up
