CPIM Practice Exam

If an order is placed at the start of each month, how many times can a stockout occur in a year?

1. 1 time

2. 12 times

3. 52 times

4. 365 times

The correct answer is: 12 times

The correct answer is 12 times, which corresponds to the scenario where an order is placed at the start of each month. In this situation, the stockout can occur once for each month of the year, leading to a total of 12 potential occurrences. Each month may present a different demand level, and if inventory levels are not sufficient to meet that demand, a stockout can occur. This concept emphasizes the relationship between inventory management, demand fulfillment, and order timing. When orders are placed monthly, the possibility of stockouts hinges on the alignment of inventory levels with consumption patterns during each specific month. If demand surpasses supply in any given month, it results in a stockout. The other options reflect different frequency scenarios (once a year, weekly, or daily) but do not accurately correspond to the monthly order placement context described in the question. Thus, the situation illustrates the importance of understanding inventory cycles and replenishment strategies to mitigate stockout risks effectively.