Practice Test Geeks(CPP) Certified Purchasing Professional Practice Test
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Inventory & Supply Chain Management Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Inventory & Supply Chain Management flashcards as text

  1. Which term describes the practice of postponing final product differentiation until the latest possible point in the supply chain?

    Answer: Postponement

    Postponement delays product customization (labeling, assembly, configuration) as late as possible to maintain flexibility and reduce inventory risk.

  2. What is the reorder point (ROP) formula when lead time demand is known and safety stock is maintained?

    Answer: ROP = (Average daily demand × Lead time) + Safety Stock

    ROP is calculated as the demand expected during lead time plus safety stock to cover variability.

  3. A CPP candidate reviews a supply chain map and identifies a tier-2 supplier providing a critical raw material. Why is tier-2 visibility important?

    Answer: Disruptions at tier-2 can cascade to affect tier-1 delivery performance

    Tier-2 (sub-supplier) failures can interrupt tier-1 suppliers' production, indirectly disrupting the buyer's supply even with no direct relationship.

  4. Which inventory costing method assigns the most recent purchase costs to cost of goods sold, often used during inflationary periods?

    Answer: LIFO (Last-In, First-Out)

    LIFO assigns the newest (most expensive) inventory costs to COGS first, which can reduce taxable income during inflation but is not permitted under IFRS.

  5. In lean supply chain management, which of the following is considered a form of waste (muda)?

    Answer: Excess inventory above current demand

    Excess inventory is one of the seven wastes in lean thinking because it ties up capital, requires storage, and can mask quality problems.

  6. What is the primary benefit of implementing a Collaborative Planning, Forecasting, and Replenishment (CPFR) program with suppliers?

    Answer: Improving demand forecast accuracy through shared information

    CPFR improves forecast accuracy by sharing sales data, promotional plans, and inventory information between trading partners.

  7. A buyer wants to reduce supply chain total cost by consolidating shipments. Which trade-off must be considered?

    Answer: Lower freight cost vs. higher holding cost from larger, less frequent deliveries

    Consolidating shipments reduces per-unit freight cost but increases average inventory held and associated carrying costs.