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A company finds that one of its warehouses is out of capacity to store products. Expanding the physical size of the warehouse is not an option. The most appropriate solution would be to increase the:
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For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?
Which of the following elements typically is considered to be an output of demand planning?
Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:
A company considers moving a portion of its production to a distant country to support a major customer. Which of the following actions is most effective in mitigating the risk of financial loss in the event of a global economic downturn?
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Question 7 - CSCP discussion

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A company has significant cash invested in its finished goods inventories. What action can this company take to significantly reduce its inventory investment while maintaining its customer service levels?

A.
Begin production after receipt of customer orders
Answers
A.
Begin production after receipt of customer orders
B.
Move the customer decoupling point from finished goods to components
Answers
B.
Move the customer decoupling point from finished goods to components
C.
Increase component assembly lead times
Answers
C.
Increase component assembly lead times
D.
Plan key component material with preferred suppliers
Answers
D.
Plan key component material with preferred suppliers
Suggested answer: B

Explanation:

Moving the customer decoupling point (the point where demand variability is buffered) from finished goods to components can significantly reduce inventory investment. By doing this, the company can manufacture and assemble products based on actual customer orders rather than forecasted demand, thereby reducing the amount of finished goods inventory held. This approach, often referred to as an assemble-to-order (ATO) strategy, allows the company to maintain high customer service levels by quickly assembling products from components when orders are received, rather than holding large quantities of finished goods.

Vollmann, T.E., Berry, W.L., Whybark, D.C., & Jacobs, F.R. (2005). Manufacturing Planning and Control for Supply Chain Management. McGraw-Hill.

Ptak, C.A., & Smith, C. (2011). Orlicky's Material Requirements Planning. McGraw-Hill Education.

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asked 16/09/2024
Igor van der Burgh
38 questions
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