Certified Supply Chain Professional (CSCP) Practice Exam

What is defined as inventory accuracy?

1. When total inventory is maximized

2. When on-hand quantity matches recorded balance within tolerance

3. When inventory levels are below safety stock

4. When there is no discrepancy in invoices

The correct answer is: When on-hand quantity matches recorded balance within tolerance

Inventory accuracy refers to the degree to which the recorded inventory levels in a system match the physical inventory that is actually present. This concept is crucial for effective supply chain management, as discrepancies can lead to issues such as stockouts or overstock situations, impacting customer service and operational efficiency. When the on-hand quantity matches the recorded balance within a specified tolerance, it indicates a high level of accuracy in inventory management. This alignment ensures that businesses can rely on their inventory data for decision-making, planning, and forecasting. Achieving such accuracy often involves regular stock counts, audits, and the use of technology to minimize human errors. In contrast, maximizing total inventory does not necessarily equate to accuracy; it may lead to increased holding costs and waste if not properly managed. Similarly, maintaining inventory levels below safety stock reflects a reactive approach to inventory management, which can lead to shortages. Finally, having no discrepancies in invoices relates more to financial accuracy rather than the physical inventory accuracy itself, which is the main focus of the question.