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NEW QUESTION # 163
In times of monetary inflation, which of the following methods of inventory valuation results in the greatest cost of sales for the early years of a particular product?
Answer: C
Explanation:
In inflationary environments, LIFO assigns the most recent (higher) costs to the cost of goods sold, resulting in higher COGS and lower taxable income. FIFO does the opposite, leading to lower COGS and higher profits.
"When inflation occurs, the LIFO method results in higher cost of goods sold because it uses more recent, higher-cost inventory values."
- CPIM Practice Questions, Inventory Valuation (DSP Page 97)
NEW QUESTION # 164
An organization donates used computer equipment to a non-profit group. A system administrator used a degausser on both the magnetic and Solid State Drives (SSD) before delivery. A volunteer at the non-profit group discovered some of the drives still contained readable data and alerted the system administrator. What is the BEST solution to ensure that computer equipment does not contain data before release?
Answer: D
NEW QUESTION # 165
The primary outcome of frequent replenishments in a distribution requirements planning (DRP) system is that:
Answer: B
Explanation:
The primary outcome of frequent replenishments in a distribution requirements planning (DRP) system is that the level of required safety stock is reduced. Safety stock is the extra inventory that is held to protect against demand uncertainty or supply variability. Frequent replenishments mean that the inventory is replenished more often and in smaller quantities, which reduces the risk of stockouts and the need for safety stock. Frequent replenishments also improve the inventory visibility and accuracy, which enable better demand forecasting and inventory planning. By reducing the safety stock, the company can lower its inventory carrying costs, free up working capital, and increase its inventory turnover. The other options are not correct, as they are not the primary outcome of frequent replenishments, but rather possible benefits or drawbacks of frequent replenishments, depending on the situation:
Lead times to customers decrease: This may or may not be true, depending on the distance between the distribution centers and the customers, the transportation mode and frequency, and the customer service level. Frequent replenishments may reduce the lead times if the distribution centers are closer to the customers and the transportation is fast and reliable. However, frequent replenishments may also increase the lead times if the distribution centers are far from the customers and the transportation is slow and infrequent.
Transportation costs decrease: This may or may not be true, depending on the transportation mode, distance, and volume. Frequent replenishments may reduce the transportation costs if the transportation mode is economical, the distance is short, and the volume is high. However, frequent replenishments may also increase the transportation costs if the transportation mode is expensive, the distance is long, and the volume is low.
More efficient load consolidation occurs: This is unlikely to be true, as frequent replenishments usually mean smaller shipments that are less likely to fill the capacity of the transportation vehicles. Load consolidation is the process of combining multiple shipments into one larger shipment to optimize the transportation efficiency and reduce the transportation costs. Frequent replenishments may reduce the opportunities for load consolidation and increase the transportation inefficiency and costs. References:
[CPIM Part 2 - Section A - Topic 4 - Distribution Planning]
Distribution Requirements Planning (DRP) in Supply Chain
What is DRP? (A Comprehensive Guide on Distribution Requirements Planning) Safety Stock: The Ultimate Guide Load Consolidation
NEW QUESTION # 166
One advantage of adopting a supply network perspective Is that it:
Answer: D
Explanation:
One advantage of adopting a supply network perspective is that it enhances understanding of competitive and cooperative forces. A supply network perspective is a holistic view of the supply chain that considers the interdependencies and interactions among the various entities involved in the flow of materials, information, and money. A supply network perspective helps to identify the sources of value creation and capture, the opportunities and threats in the market, and the potential synergies and conflicts among the supply chain partners. A supply network perspective also helps to design and implement effective strategies and tactics to achieve competitive advantage and customer satisfaction. The other statements are not advantages of adopting a supply network perspective. Protecting global markets, defining market relationships and partnerships, and encouraging rivals to collaborate are possible outcomes or objectives of adopting a supply network perspective, but they are not the benefits of the perspective itself. References: Supply Network Perspective | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 167
Database security includes which of the following requirements?
Answer: C
NEW QUESTION # 168
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