APICS Certified Supply Chain Professional (CSCP) — Question 529

A company distributes its products through wholesale, retail stores, and its e-commerce website. Inventory and demand forecasting for each channel is managed separately. The company is experiencing high levels of obsolete inventory. Which of the following strategies is most likely to reduce the levels of obsolescence?

Answer options

• A. Place smaller orders with suppliers.
• B. Pool inventory and the forecast.
• C. Open more outlet stores.
• D. Negotiate lower costs with suppliers.

Correct answer: B

Explanation

The correct answer, B, suggests consolidating inventory and forecasts, which allows for better alignment of supply with demand across all channels, reducing the likelihood of excess stock. The other options, such as A and C, do not address the root cause of the obsolescence, while D focuses on cost rather than inventory management.