CPIM Practice Exam

What defines a two-bin inventory system?

1. An inventory system that uses two different suppliers

2. A method of inventory control using two storage locations

3. A fixed-order inventory management system with two bins

4. A technique for tracking inventory on a spreadsheet

The correct answer is: A fixed-order inventory management system with two bins

A two-bin inventory system is characterized as a fixed-order inventory management system that utilizes two bins or containers for storing inventory. This approach allows for efficient replenishment and inventory management. In this system, one bin holds the active stock that is currently in use, while the second bin serves as a backup. When the first bin is depleted or drops below a certain predefined level, a reorder is triggered to refill the inventory. This method helps ensure that there is always enough inventory on hand to meet demand, thereby minimizing the risk of stockouts. The simplicity and effectiveness of the two-bin system make it particularly suitable for managing items with relatively stable and predictable demand, allowing for quick reordering without complex calculations. This system also aids in visual management, as users can easily monitor when the first bin is running low. This direct approach does not involve multiple suppliers, alternative tracking techniques through spreadsheets, or the complexity of using two different storage locations beyond the two designated bins, which keeps the focus tight on inventory management.