CLP Inventory Control & Warehousing 5 — Questions and Answers
Question 1: Under a vendor-managed inventory (VMI) arrangement, who is responsible for monitoring stock levels and triggering replenishment?
- The buying company's procurement team
- The supplier/vendor (Correct answer)
- A third-party logistics provider
- A government regulatory body
Correct answer: The supplier/vendor
In VMI, the supplier monitors the customer's inventory levels and initiates replenishment orders on the customer's behalf.
Question 2: Which type of warehouse racking allows a forklift to drive inside the rack structure to access pallets, maximizing storage density?
- Selective pallet racking
- Drive-in/drive-through racking (Correct answer)
- Push-back racking
- Cantilever racking
Correct answer: Drive-in/drive-through racking
Drive-in racking eliminates aisles between rows, allowing forklifts to enter lanes and dramatically increasing storage density.
Question 3: What inventory condition is described when demand cannot be met from available stock and the order must wait for replenishment?
- Dead stock
- Backorder (Correct answer)
- Safety stock depletion
- Overstock
Correct answer: Backorder
A backorder occurs when a customer order cannot be filled immediately due to insufficient inventory and is queued for future fulfillment.
Question 4: Hazardous material (HAZMAT) storage in a warehouse must comply with regulations primarily to:
- Reduce inventory carrying costs
- Prevent fires, chemical reactions, and exposure risks to personnel and the environment (Correct answer)
- Increase storage density
- Simplify cycle counting procedures
Correct answer: Prevent fires, chemical reactions, and exposure risks to personnel and the environment
HAZMAT storage regulations (e.g., OSHA, DOT, EPA) mandate segregation, labeling, and containment to prevent accidents and environmental contamination.
Question 5: In warehouse picking operations, 'batch picking' means:
- Picking one order completely before starting the next
- Picking items for multiple orders simultaneously in a single warehouse pass (Correct answer)
- Using automated robots exclusively for order picking
- Picking items by weight batch to balance workload
Correct answer: Picking items for multiple orders simultaneously in a single warehouse pass
Batch picking consolidates multiple orders into one picking trip, reducing travel time by collecting items for several orders at once.
Question 6: Which concept describes the ideal warehouse inventory level where carrying costs are minimized without risking stockouts?
- Maximum stock level
- Optimal inventory level (Correct answer)
- Reorder point
- Economic order quantity
Correct answer: Optimal inventory level
The optimal inventory level balances holding costs against the risk of stockouts, often determined by EOQ and safety stock calculations.
Question 7: A logistics manager notices high 'days on hand' (DOH) for several SKUs. This most likely indicates:
- Strong inventory turnover performance
- Excess inventory relative to current demand (Correct answer)
- Insufficient safety stock
- Accurate demand forecasting
Correct answer: Excess inventory relative to current demand
High DOH means inventory is sitting longer than necessary, tying up capital and increasing the risk of obsolescence.
CLP Inventory Control & Warehousing 5
Under a vendor-managed inventory (VMI) arrangement, who is responsible for monitoring stock levels and triggering replenishment?