CPIM Practice Exam

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Prepare for the CPIM Exam with a comprehensive quiz that features insightful questions and real-time feedback. Enhance your knowledge and understanding of inventory and production management to pass your certification test with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the main purpose of safety stock in inventory management?

To optimize carrying costs
To ensure fulfillment during demand fluctuations
To improve supplier negotiation outcomes
To maximize production efficiency

The correct answer is: To ensure fulfillment during demand fluctuations

The main purpose of safety stock in inventory management is to ensure fulfillment during demand fluctuations. Safety stock acts as a buffer against uncertainties in demand and supply, including unexpected spikes in customer orders or delays from suppliers. By holding additional inventory beyond the anticipated needs, a company can continue to meet customer demand even when deviations occur, such as sudden increases in sales or longer-than-expected lead times for new stock. This is especially critical in environments where customer satisfaction is tied closely to product availability and timely delivery. While optimizing carrying costs, improving supplier negotiation outcomes, and maximizing production efficiency are also important aspects of inventory management, they are not the principal reason for maintaining safety stock. Carrying costs can be a concern if safety stock levels are too high, but the core purpose of safety stock is primarily about ensuring that sufficient inventory is always on hand to satisfy demand.