CPIM Practice Exam

Transit inventory can be defined as:

1. Stock held for quality improvement

2. Inventory moved between production sites

3. Excess stock available for future sales

4. Inventory immediately available for shipping

The correct answer is: Inventory moved between production sites

Transit inventory refers to the stock that is currently being transported from one location to another, typically between production sites or along the supply chain. This type of inventory is not available for immediate use or sale, as it is in the process of moving. Understanding transit inventory is crucial for supply chain management, as it helps companies strategize about their logistics and ensure that they maintain the appropriate levels of stock at different locations to meet demand without experiencing delays. The other options describe different types of inventory management concepts. The stock held for quality improvement does not pertain to inventory in transit; it relates more to materials set aside for quality control processes. Excess stock available for future sales doesn't capture the essence of transit, as it refers to inventory that is already in stock but not currently sold. Inventory immediately available for shipping implies that the items are ready for distribution, which is contrary to the definition of transit inventory, where the goods are en route and not immediately accessible for sale or distribution.