CPIM Practice Exam

What does distribution inventory typically include?

1. Only raw materials

2. Work-in-process items

3. Spares and finished goods in warehouses

4. Unused raw materials

The correct answer is: Spares and finished goods in warehouses

Distribution inventory typically includes spares and finished goods in warehouses because this type of inventory is specifically related to the storage and movement of products that are ready for sale or distribution to customers. Finished goods are products that have completed the manufacturing process and are available for shipment, while spare parts may be necessary to support maintenance and repairs for these products or equipment. This inventory is critical for ensuring that demand is met promptly without delays, as it enables businesses to respond quickly to customer orders. Managing distribution inventory effectively is key to maintaining service levels and optimizing supply chain operations. The other options reflect components that do not fit the primary definition of distribution inventory. Raw materials and unused raw materials are typically associated with production inventory, and work-in-process items are part of the manufacturing process rather than finished products ready for distribution.