Inventory Management Learning Block 5 Practice Questions

Question 1

The basic purpose that inventory serves in supply chains is:

Answer 1

Balancing supply and demand

Question 2

Variability in the supply chain due to order placement, order fulfillment, demand and supply variations, lack of communication, and disorganization can result in:

Answer 2

The bullwhip effect

Question 3

If different entities collaborate and communicate across the supply chain, that can lead to:

Answer 3

Reduced uncertainty

Question 4

The pull approach, also known as a reactive system, relies on:

Answer 4

Customer demand to move product through a supply chain

Question 5

Postponement is a tool used in inventory management in which:

Answer 5

Products are produced in a semi-finished state and then finished to meet customer orders

Question 6

Generally, JIT systems are designed to:

Answer 6

Manage lead times and eliminate waste

Question 7

A third-party firm may be defined as:

Answer 7

Is an external supplier that can perform all or part of a company’s functions

Question 8

SMI is a supply chain model where the:

Answer 8

Supplier has the responsibility for maintaining the purchaser’s inventory levels

Question 9

In consignment stocking, a supplier:

Answer 9

Provides products to a buyer that are held in stock at the buyer’s facilities, but the inventory is still owned by the supplier

Question 10

CPFR emphasizes supply chain functions that:

Answer 10

Develop a common forecast for individual SKUs to reduce uncertainty