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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:
The purpose of price differentiation is to:
In a make-or-buy decision, if the product is modular and the company is dependent on knowledge and capacity, outsourcing most likely will be:
A company's annual cost of goods sold is $350 million, and inventory carrying cost is 18%. The company averages four inventory turns. The cost savings resulting from increasing inventory turns from four to six would be:
For an item with high profit impact and low supply risk, what would be a likely procurement strategy to support the overall supply strategy?
Supply chains delivering products or services are most able to respond quickly to changing market requirements when:
Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:
The primary risk associated with outsourcing innovative components to suppliers is:
The practice of supply chain members acting in close collaboration while retaining independent ownership is known as:
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?

Question 268 - CSCP discussion

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A manufacturing company has several inexpensive items that are critical to the production process. The supply of these items has been depleted several times. Which of the following actions is most likely to reduce stockouts?

A.
Assign personnel to manage the items.
Answers
A.
Assign personnel to manage the items.
B.
Standardize the items.
Answers
B.
Standardize the items.
C.
Increase minimum inventory levels for the items.
Answers
C.
Increase minimum inventory levels for the items.
D.
Initiate a vendor-managed inventory (VMI) program for the items.
Answers
D.
Initiate a vendor-managed inventory (VMI) program for the items.
Suggested answer: C

Explanation:

Increasing the minimum inventory levels for critical items ensures that there is a buffer stock available to prevent stockouts. This approach is straightforward and effective for items that are inexpensive but critical to the production process. It helps maintain continuous production by ensuring that these essential items are always available when needed, thereby reducing the risk of production delays due to stock depletion.

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill Education.

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

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asked 16/09/2024
Keith Barker
33 questions
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