CPIM Practice Exam

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What does inventory accuracy refer to?

The level of stock shortages in a warehouse
The degree to which recorded inventory matches actual inventory
The speed at which items are sold from inventory
The percentage of inventory items that are damaged

The correct answer is: The degree to which recorded inventory matches actual inventory

Inventory accuracy refers to the degree to which recorded inventory matches actual inventory. This concept is crucial for effective inventory management because it ensures that the data used for decision-making reflects the true physical stock levels. High inventory accuracy leads to improved order fulfillment, reduced stockouts, and minimized excess inventory, all of which contribute to greater operational efficiency and customer satisfaction. In inventory management, discrepancies between recorded and actual inventory can result from a variety of issues, such as theft, damage, or errors in inventory tracking systems. Therefore, maintaining high inventory accuracy is essential for ensuring that businesses can respond accurately to customer demands and manage their resources effectively.