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Exam CSCP topic 1 question 276 discussion

Actual exam question from APICS's CSCP
Question #: 276
Topic #: 1
[All CSCP Questions]

When multiple warehouses are combined into one centralized warehouse, the requirement for safety stock is reduced because:

  • A. there is less in-transit inventory.
  • B. the total variability of demand is reduced.
  • C. average cycle stock is reduced.
  • D. safety stock becomes available-to-promise.
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Suggested Answer: B 🗳️

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Wild3d
1 year, 7 months ago
Selected Answer: B
When multiple warehouses are combined into one centralized warehouse, the overall demand variability is typically reduced. This is because demand fluctuations that may occur at individual warehouses are often offset by demand fluctuations at other warehouses. By centralizing inventory in one location, the total variability of demand is smoothed out, resulting in a more stable and predictable demand pattern at the centralized warehouse
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Supplym
2 years, 9 months ago
Why not A?
upvoted 2 times
piotrusl
2 years, 8 months ago
One warehouse serves same number of customer orders as multiple warehouse. Hence TT (if changed) is rather increased as on average customer are further away from central warehouse vs localized ones.
upvoted 1 times
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C (25%)
B (20%)
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