CPIM Practice Exam

What role does cycle stock play in inventory systems?

1. Stabilizes long-term investment strategies

2. Supports regular demand fulfillment

3. Minimizes the risk of stockouts

4. Only for slow-moving items

The correct answer is: Supports regular demand fulfillment

Cycle stock plays a crucial role in inventory systems by directly supporting regular demand fulfillment. It represents the portion of inventory that is used to meet ongoing and predictable customer demand. By maintaining cycle stock, businesses ensure that they have sufficient quantities of products available to satisfy daily sales and operations without frequent interruptions or shortages. This concept is particularly important in environments with steady demand patterns, as cycle stock allows for efficient inventory turnover and helps in managing costs associated with excess inventory. By having the right amount of cycle stock, companies can reduce the chances of running out of products that their customers regularly want, thereby enhancing customer satisfaction and operational efficiency.