APICS Certified Supply Chain Professional (CSCP) — Question 155

Which of the following actions is most likely to reduce inventory carrying costs?

Answer options

• A. Utilize ABC classification
• B. Standardize the items in inventory
• C. Set minimum inventory levels
• D. Initiate a vendor-managed inventory (VMI) program

Correct answer: D

Explanation

Initiating a vendor-managed inventory (VMI) program allows suppliers to manage inventory levels, which can lead to reduced carrying costs by optimizing stock levels based on real-time demand. The other options, while beneficial, do not directly address the management of inventory by external suppliers and may not result in as significant a reduction in carrying costs.