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Question 278 - CSCP discussion

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An item must be added to inventory to support new business. Which of the following inputs should be considered to determine minimum inventory level?

A.
Consumption rate
Answers
A.
Consumption rate
B.
Qualified supplier
Answers
B.
Qualified supplier
C.
ABC classification
Answers
C.
ABC classification
D.
Number of sales transactions
Answers
D.
Number of sales transactions
Suggested answer: A

Explanation:

Determining the minimum inventory level for a new item requires understanding its consumption rate, which indicates how quickly the item is used or sold. This information is critical for setting appropriate inventory levels to ensure availability while minimizing excess stock. By analyzing the consumption rate, businesses can better forecast demand, set reorder points, and maintain optimal inventory levels to support the new business without overstocking.

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

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

asked 16/09/2024
han wu
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