CPIM Practice Exam

Which of the following factors influences the demand during lead time?

1. Carrying cost and lot size

2. Lead time and safety stock

3. Units per period and lead time

4. Annual order cost and stock level

The correct answer is: Units per period and lead time

The selection of "Units per period and lead time" highlights the core relationship between demand and lead time. In supply chain management, the demand during lead time refers to the quantity of products that are expected to be consumed while waiting for a new supply to arrive. By measuring "units per period," which indicates how much of a product is needed over a specified time frame, and factoring in "lead time," which is the time it takes for an order to be fulfilled, one can effectively determine the demand that must be covered while the order is being processed. Understanding this connection allows businesses to manage their inventories more effectively by ensuring they always have adequate stock to meet customer needs during the time it takes to replenish inventory. This helps prevent stockouts, improves customer satisfaction, and contributes to smoother operations in supply chain management. Other choices present factors that contribute to supply chain management but do not directly link the concept of demand during lead time in the same way. Hence, focusing on the relationship between units consumed and the duration until replenishment provides the essential insight needed to address demand effectively during the lead time.