Certified Supply Chain Professional (CSCP) Practice Exam

What is a primary benefit of inventory accuracy?

1. A decrease in safety stock levels

2. A better match between supply and demand

3. A reduction in total inventory cost

4. A metric for supplier performance

The correct answer is: A better match between supply and demand

A primary benefit of inventory accuracy is that it allows for a better match between supply and demand. When inventory records are accurate, businesses have a clearer understanding of what products are available and how much stock is on hand. This knowledge helps organizations make informed decisions regarding production, procurement, and sales, ultimately aligning inventory levels with customer demand more effectively. Having accurate inventory data reduces the risk of overstocking or stockouts, which can lead to lost sales or excess carrying costs. When supply closely matches demand, companies can operate more efficiently, enhancing customer satisfaction as products are available when needed. Additionally, this alignment allows for smoother operations throughout the supply chain, as stakeholders can better anticipate needs and adjust accordingly. While a decrease in safety stock levels can be a result of improved inventory accuracy, the core benefit centers on the direct relationship with supply and demand dynamics. Similarly, while total inventory cost reduction and supplier performance metrics may show associated improvements, the primary advantage remains in achieving a better balance between what is offered and what is needed by the market.