Certified Supply Chain Professional (CSCP) Practice Exam

What is a key risk cost for inventory management related to perishable goods?

1. Assessment fees

2. Loss of value due to spoilage

3. Storage fees

4. Transportation costs

The correct answer is: Loss of value due to spoilage

In inventory management for perishable goods, loss of value due to spoilage is a significant risk cost. Perishable items, such as food products, have a limited shelf life, and their value diminishes over time. If these goods are not sold or consumed within their usable period, they can spoil or become unsafe for consumption, leading to financial losses for the company. This spoilage not only contributes to direct disposal costs but also affects overall inventory turnover and profitability. The focus on spoilage highlights the importance of effective inventory management practices, such as maintaining optimal stock levels, implementing first-in-first-out (FIFO) processes, and using accurate demand forecasting to avoid excess inventory. Overall, managing the risk of spoilage is crucial for companies that handle perishable goods to minimize waste and maximize profitability.