Certified Supply Chain Professional (CSCP) Practice Exam

What is cycle counting in inventory management?

1. Counting inventory only once a year

2. Counting inventory multiple times a year

3. Using technology to count inventory

4. Eliminating the need for physical inventory checks

The correct answer is: Counting inventory multiple times a year

Cycle counting in inventory management refers to the practice of counting inventory multiple times throughout the year, rather than performing a single comprehensive count annually. This approach enables organizations to regularly verify the accuracy of their inventory records, identify discrepancies, and take corrective actions in a timely manner. By implementing cycle counting, businesses can maintain better control over their stock levels and reduce the likelihood of stockouts or excess inventory. This method emphasizes the importance of ongoing reconciliation and helps ensure that inventory records accurately reflect the physical quantities of items on hand. The process typically divides the inventory into different categories or cycles, allowing for frequent checks on a smaller subset of items rather than the entire inventory at once. This continual focus on maintaining accuracy not only leads to improved inventory management practices but also enhances operational efficiency.