Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is considered a planning factor in material planning?

1. Supplier reliability

2. Market trends

3. Safety stock concerns and lead times

4. Customer preferences

The correct answer is: Safety stock concerns and lead times

Safety stock concerns and lead times are essential components of material planning because they directly influence how much inventory is maintained and when materials need to be ordered. Safety stock is kept to mitigate the risks of stockouts due to demand variability or supply disruptions. Understanding lead times, which is the time it takes to replenish inventory once an order is placed, ensures that materials are available when needed, preventing potential delays in production. Both safety stock and lead time create a framework for making strategic decisions about inventory levels, ensuring that the supply chain runs smoothly while meeting customer demands. This concept is crucial in planning to balance costs associated with holding inventory against the need to maintain adequate supply levels. While supplier reliability may impact material sourcing quality, market trends typically influence demand forecasting, and customer preferences can shape product offerings, safety stock and lead times are the most fundamentally linked to the tactical decisions made during the material planning process.