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Question 47 - CPIM-Part-2 discussion

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A statistical safety stock calculation would be appropriate for:

A.
components used in multiple end items.
Answers
A.
components used in multiple end items.
B.
new products at time of introduction.
Answers
B.
new products at time of introduction.
C.
end items with stable demand.
Answers
C.
end items with stable demand.
D.
supply-constrained raw materials.
Answers
D.
supply-constrained raw materials.
Suggested answer: C

Explanation:

A statistical safety stock calculation is a method to determine the optimal amount of safety stock based on the demand variability, the lead time variability, and the desired service level. A statistical safety stock calculation would be appropriate for end items with stable demand, because these items have a predictable demand pattern and a low coefficient of variation. For items with unstable or unpredictable demand, such as components used in multiple end items, new products at time of introduction, or supply-constrained raw materials, a statistical safety stock calculation may not be accurate or reliable, and other methods such as judgmental or simulation-based approaches may be preferred.Reference: CPIM Part 2 Exam Content Manual, Domain 5: Plan and Manage Inventory, Section 5.4: Inventory Management Techniques, p. 29.

asked 16/09/2024
Felix Imafidon
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