CPIM Practice Exam

Which of the following best describes the function of a distribution center?

1. Primarily for raw material storage

2. Focuses on demand-driven distribution of finished goods

3. Acts as a manufacturing location

4. Is dedicated to repair and maintenance

The correct answer is: Focuses on demand-driven distribution of finished goods

The function of a distribution center is best described by focusing on demand-driven distribution of finished goods. A distribution center serves as an intermediary storage facility that supports the supply chain by consolidating products from various sources and distributing them to retailers or directly to consumers based on current demand. This function allows for efficient inventory management, as goods can be received, stored temporarily, and shipped out quickly to meet customer needs. In contrast, while raw material storage is essential for production facilities, a distribution center specifically handles finished products. It does not serve as a manufacturing location; instead, its role is to facilitate the flow of goods post-manufacturing. Additionally, a distribution center does not typically focus on repair and maintenance activities; rather, it is primarily concerned with the storage and timely delivery of products to enhance customer satisfaction and streamline supply chain operations.