CPIM Practice Exam

Which is an advantage of cycle counting?

1. Timely detection and correction of problems

2. Reduction of direct labor cost

3. Use of idle labor

4. Replenishment of inventory

The correct answer is: Timely detection and correction of problems

The choice highlighting timely detection and correction of problems accurately reflects one of the significant advantages of cycle counting. Cycle counting involves regularly scheduled physical counts of inventory items to ensure that the recorded data matches actual stock levels. This practice enables organizations to identify discrepancies in inventory records quickly, allowing for a prompt response to address issues such as theft, misplacement, or data entry errors. By catching these problems early, businesses can mitigate the risks of stockouts, overstocking, and inaccuracies in inventory reporting, which ultimately leads to more efficient operations and improved inventory management. While the other options may have some relevance in various contexts, they do not directly align with the primary advantages specific to cycle counting. For example, reduction of direct labor costs and use of idle labor might not be relevant, as cycle counting often requires dedicated labor resources, potentially affecting labor costs without inherently reducing them. Replenishment of inventory is typically a separate inventory management function that cycle counting supports but does not directly cause. Therefore, the focus on timely detection and correction of problems stands out as the most pertinent advantage of cycle counting.