CSCP CSCP Internal Operations and Inventory Questions and Answers 2 — Questions and Answers
Question 1: Which inventory management approach focuses on reducing lot sizes and lead times to minimize work-in-process inventory throughout the production system?
- Lean manufacturing (Correct answer)
- Materials requirements planning
- Economic order quantity
- Vendor-managed inventory
Correct answer: Lean manufacturing
Lean manufacturing systematically reduces waste including excess WIP by targeting smaller lot sizes and shorter lead times.
Question 2: What is the primary purpose of a bill of materials (BOM) in internal operations planning?
- To define the components and quantities needed to manufacture a finished product (Correct answer)
- To calculate the total cost of goods sold
- To schedule workforce shifts across production lines
- To establish supplier payment terms
Correct answer: To define the components and quantities needed to manufacture a finished product
A BOM lists all raw materials, sub-assemblies, and components along with quantities required to produce one unit of a finished product.
Question 3: In the context of inventory accuracy, what does cycle counting achieve compared to a full physical inventory?
- It allows continuous verification of inventory records by counting a subset of items on a rotating schedule (Correct answer)
- It eliminates the need for any inventory record keeping
- It only counts items that have been recently received
- It replaces the need for an ERP system
Correct answer: It allows continuous verification of inventory records by counting a subset of items on a rotating schedule
Cycle counting verifies inventory accuracy continuously by counting small subsets of inventory on a regular rotating basis rather than shutting down operations for a full count.
Question 4: What does the term 'throughput' measure in internal operations?
- The rate at which a system generates finished goods or services over a given period (Correct answer)
- The total amount of raw materials stored in a warehouse
- The number of suppliers in the procurement network
- The average employee productivity per shift
Correct answer: The rate at which a system generates finished goods or services over a given period
Throughput measures the rate at which a system produces output, reflecting the overall productivity of the operation.
Question 5: Which strategy involves positioning inventory at a central point in the supply chain to delay product differentiation until customer orders are received?
- Postponement (Correct answer)
- Forward buying
- Speculative stocking
- Cross-docking
Correct answer: Postponement
Postponement delays final product configuration or customization until actual demand is known, reducing the risk of excess finished goods inventory.
Question 6: What is the main risk of maintaining excessively high safety stock levels?
- Increased carrying costs and potential obsolescence (Correct answer)
- Reduced customer service levels
- Lower warehouse utilization rates
- More frequent stockouts
Correct answer: Increased carrying costs and potential obsolescence
Excessive safety stock ties up capital and warehouse space while increasing the risk that inventory becomes obsolete before it is used.
CSCP CSCP Internal Operations and Inventory Questions and Answers 2
Which inventory management approach focuses on reducing lot sizes and lead times to minimize work-in-process inventory throughout the production system?