CPIM Practice Exam

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What does anticipation inventory aim to mitigate?

Seasonal changes in demand
Supplier reliability issues
Long production lead times
Inventory write-offs

The correct answer is: Seasonal changes in demand

Anticipation inventory is a strategy employed to manage and prepare for expected fluctuations in demand, particularly those that can be predicted, such as seasonal changes. By accumulating this type of inventory in advance, a business can ensure that it has sufficient stock to meet the anticipated higher demand during peak times, such as holidays or seasonal events. This proactive approach helps to avoid stockouts, maintain customer satisfaction, and allows for smoother operational workflows during periods of increased demand. While other inventory management strategies address different issues—such as safety stock for uncertainties in supply reliability or long lead times—anticipation inventory specifically focuses on preparing for predictable variations in demand. Therefore, its primary goal is to balance supply with anticipated peaks in demand, ensuring that the organization can adequately meet customer needs without significant delays or lost sales opportunities.