SCM 3301 UH TEST 3 EXAM QUESTIONS
AND ANSWERS 100% PASS 2026/2027
Inventory - ANS Those stocks or items used to support production (raw materials and work-
in-process items), supporting activities (maintenance, repair, and operating supplies) and
customer service (finished goods and spare parts).
Types of Inventory - ANS Cycle Stock (Inventory)
Safety Stock (Inventory)
Anticipation Inventory
Hedge Inventory
Transportation (or Pipeline) Inventory
Smoothing (or Buffer) Inventory
Beginning of a cycle inventory is... - ANS Q
End of a cycle inventory is.... - ANS O
Inventory is replenished at the end of a cycle of a Lot Size - ANS Q
@2026 ALLRIGHTS RESERVED 1
, The longer the time between orders (cycle) the greater or smaller the Cycle Stock must be? -
ANS Greater
Anticipation Inventory - ANS Inventory that is held in anticipation of customer demand,
allowing instant availability of items when customers want them. For example: finished goods
Hedge Inventory - ANS A form of inventory buildup to buffer against some event that is
speculated to happen. For example: in advance of a hurricane
Transportation (Pipeline) Inventory - ANS Inventory that is moving from one link of the supply
chain to another. For example: raw materials that have been ordered but have not yet arrived
Smoothing (Buffer) Inventory - ANS Inventory that is used to smooth out differences between
upstream production rates and downstream demand rates
Supply Uncertainty - ANS The risk of interruptions in the flow of components/materials from
upstream suppliers; unreliable supply management
Purchase Discounts - ANS Purchasing extra inventory to receive a price discount or
transportation discount. For example: 10% discount if you buy a truckload.
Production Uncertainty - ANS The risk of interruptions in the flow of production due to
unreliable or highly variable process outcomes; unreliable productivity & quality.
Demand Uncertainty - ANS The risk of significant and unpredictable fluctuations in
downstream demand; unreliable forecasting.
@2026 ALLRIGHTS RESERVED 2
AND ANSWERS 100% PASS 2026/2027
Inventory - ANS Those stocks or items used to support production (raw materials and work-
in-process items), supporting activities (maintenance, repair, and operating supplies) and
customer service (finished goods and spare parts).
Types of Inventory - ANS Cycle Stock (Inventory)
Safety Stock (Inventory)
Anticipation Inventory
Hedge Inventory
Transportation (or Pipeline) Inventory
Smoothing (or Buffer) Inventory
Beginning of a cycle inventory is... - ANS Q
End of a cycle inventory is.... - ANS O
Inventory is replenished at the end of a cycle of a Lot Size - ANS Q
@2026 ALLRIGHTS RESERVED 1
, The longer the time between orders (cycle) the greater or smaller the Cycle Stock must be? -
ANS Greater
Anticipation Inventory - ANS Inventory that is held in anticipation of customer demand,
allowing instant availability of items when customers want them. For example: finished goods
Hedge Inventory - ANS A form of inventory buildup to buffer against some event that is
speculated to happen. For example: in advance of a hurricane
Transportation (Pipeline) Inventory - ANS Inventory that is moving from one link of the supply
chain to another. For example: raw materials that have been ordered but have not yet arrived
Smoothing (Buffer) Inventory - ANS Inventory that is used to smooth out differences between
upstream production rates and downstream demand rates
Supply Uncertainty - ANS The risk of interruptions in the flow of components/materials from
upstream suppliers; unreliable supply management
Purchase Discounts - ANS Purchasing extra inventory to receive a price discount or
transportation discount. For example: 10% discount if you buy a truckload.
Production Uncertainty - ANS The risk of interruptions in the flow of production due to
unreliable or highly variable process outcomes; unreliable productivity & quality.
Demand Uncertainty - ANS The risk of significant and unpredictable fluctuations in
downstream demand; unreliable forecasting.
@2026 ALLRIGHTS RESERVED 2
