ExamGecko
Search Search Login
Home Home / APICS / CSCP
Question list
Search
Search

List of questions

Search
Open VPLUS File
Convert VPLUS to PDF

Related questions

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:
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?
Which of the following elements of total quality management (TQM) results in a lower overall cost of the product?

Question 394 - CSCP discussion

Report
Export

A supplier is offering a price discount if more is ordered at one time. The offer should be analyzed to determine if a larger order is appropriate considering: the impact of the

A.
increase in average inventory levels on ABC designations.
Answers
A.
increase in average inventory levels on ABC designations.
B.
the reduction in material cost compared to the impact on total holding costs.
Answers
B.
the reduction in material cost compared to the impact on total holding costs.
C.
the impact of additional items on indirect costs,
Answers
C.
the impact of additional items on indirect costs,
D.
the increase in transportation costs compared to the reduction in ordering cost.
Answers
D.
the increase in transportation costs compared to the reduction in ordering cost.
Suggested answer: B

Explanation:

When analyzing a supplier's offer for a price discount contingent on larger order quantities, it's essential to evaluate the trade-off between the reduced material costs and the increased holding costs. This analysis should consider factors such as additional storage space, insurance, obsolescence risks, and capital tied up in inventory. If the savings from the discounted price exceed the additional holding costs, it may be beneficial to place larger orders. Otherwise, the cost savings might be negated by the increased carrying costs. This comprehensive evaluation ensures that the decision aligns with overall cost-efficiency and supply chain strategy.

Reference:

'Inventory Management and Production Planning and Scheduling' by Edward A. Silver, David F. Pyke, and Rein Peterson

APICS Operations Management Body of Knowledge Framework

Show Answer
asked 16/09/2024
Edward Morgan
38 questions
PreviousPreviousNextNext
User
Your answer:
0 comments
Sorted by

Leave a comment first

ExamGecko

Copyright @2023 ExamGecko | All right reserved

Mail us: [email protected]
About us
Contact us
Twitter X
Facebook
Medium
Convert VPLUS to PDF
Open VPLUS files Easily and Quickly
Privacy Policy
Disclaimer
Terms