CIM Inventory Performance Metrics & KPIs 3

Question 1

Inventory velocity in the context of KPIs refers to which of the following?

Accepted Answer

The speed at which inventory moves through the supply chain from receipt to sale

Answer

The rate at which new SKUs are added to the product catalog each quarter

Answer

The frequency with which inventory counts are performed in the warehouse

Answer

The time required to transport goods from a supplier to the distribution center

Question 2

An obsolescence rate KPI is most important for which type of inventory management decision?

Accepted Answer

Determining write-down policies and identifying products approaching end-of-life

Answer

Setting reorder points for fast-moving consumer goods

Answer

Calculating safety stock levels for seasonal products

Answer

Evaluating supplier performance on on-time delivery rates

Question 3

What does a high Coefficient of Variation (CV) in demand indicate for inventory planning purposes?

Accepted Answer

Demand is highly variable and unpredictable, requiring higher safety stock

Answer

Demand is stable and predictable, allowing for minimal safety stock

Answer

Demand exceeds supply, indicating a need to increase order quantities

Answer

Demand is seasonal, requiring a time-phased replenishment strategy

Question 4

Supplier on-time delivery rate is classified as which type of inventory performance metric?

Accepted Answer

Input metric measuring upstream supply chain reliability

Answer

Output metric measuring warehouse fulfillment efficiency

Answer

Financial metric measuring total cost of ownership

Answer

Internal process metric measuring picking accuracy

Question 5

Which benchmark range is most commonly cited for carrying costs as a percentage of inventory value in US operations?

Accepted Answer

20% to 30% annually

Answer

5% to 10% annually

Answer

40% to 50% annually

Answer

1% to 5% annually

Question 6

The Inventory-to-Sales Ratio measures which relationship?

Accepted Answer

The value of inventory on hand relative to the value of monthly sales

Answer

The number of inventory items compared to total orders shipped per month

Answer

The cost of goods sold divided by total inventory investment for the period

Answer

The ratio of finished goods inventory to raw materials inventory

Question 7

Return on Inventory Investment (ROII) is best described as which of the following?

Accepted Answer

Net profit generated per dollar of average inventory investment

Answer

The percentage of returned merchandise relative to total inventory receipts

Answer

Gross revenue earned per unit of warehouse square footage used

Answer

The ratio of purchase order value to total inventory on hand