CMRP CMRP Spare Parts and Inventory Management 1 — Questions and Answers
Question 1: What is the primary purpose of establishing a Minimum-Maximum (Min-Max) inventory system for maintenance spare parts?
- To trigger replenishment orders automatically when stock falls to the reorder point and cap stock at the maximum level (Correct answer)
- To eliminate all safety stock by ordering parts only when needed
- To consolidate all spare parts purchasing with a single vendor
- To reduce the number of part numbers stocked in the warehouse
Correct answer: To trigger replenishment orders automatically when stock falls to the reorder point and cap stock at the maximum level
A Min-Max system sets a reorder point (minimum) that triggers purchasing and a maximum quantity that prevents overstocking, balancing availability against carrying cost.
Question 2: Which spare parts classification approach groups parts based on their criticality to production uptime and consequences of stockout?
- ABC/XYZ or criticality-based classification (Correct answer)
- FIFO (First In, First Out) classification
- Vendor-managed inventory classification
- Economic Order Quantity (EOQ) classification
Correct answer: ABC/XYZ or criticality-based classification
Criticality-based or ABC/XYZ classification prioritizes stocking decisions by ranking parts on production impact and demand variability, ensuring critical parts have higher service levels.
Question 3: What is 'safety stock' in the context of maintenance parts inventory?
- Extra inventory held to buffer against unexpected demand spikes or supplier lead time variability (Correct answer)
- Parts stored in a locked cage to prevent unauthorized access
- The minimum quantity required by safety regulations on-site
- Redundant components installed in parallel on critical machines
Correct answer: Extra inventory held to buffer against unexpected demand spikes or supplier lead time variability
Safety stock is a buffer quantity held above the average demand level to protect against stockouts caused by demand variability or longer-than-expected supplier lead times.
Question 4: A maintenance storeroom has $500,000 in spare parts inventory and annual parts usage of $200,000. What is the inventory turnover ratio?
- 0.4 (Correct answer)
- 2.5
- 5.0
- 1.0
Correct answer: 0.4
Inventory turnover = Annual Usage / Average Inventory Value = $200,000 / $500,000 = 0.4, indicating parts turn over less than once per year.
Question 5: What is an 'insurance spare' (or insurance item) in maintenance inventory management?
- A high-cost, long-lead-time part kept on hand specifically because its failure would cause catastrophic downtime (Correct answer)
- A part covered by the equipment manufacturer's warranty
- Any part that costs more than a pre-defined dollar threshold
- A duplicate part stored off-site at an alternate facility
Correct answer: A high-cost, long-lead-time part kept on hand specifically because its failure would cause catastrophic downtime
Insurance spares are expensive, rarely-used components held because the risk of stockout—in terms of extended downtime cost—far exceeds the carrying cost of the spare.
Question 6: Which key performance indicator (KPI) directly measures how often a requested spare part is available in the storeroom when maintenance needs it?
- Storeroom service level (or fill rate) (Correct answer)
- Inventory carrying cost percentage
- Parts obsolescence rate
- Vendor on-time delivery rate
Correct answer: Storeroom service level (or fill rate)
Storeroom service level (fill rate) measures the percentage of parts requests fulfilled from available stock without delay, directly indicating parts availability.
CMRP CMRP Spare Parts and Inventory Management 1
What is the primary purpose of establishing a Minimum-Maximum (Min-Max) inventory system for maintenance spare parts?