Certified Supply Chain Professional (CSCP) Practice Exam

What does the time-phased order point (TPOP) method assess?

1. General patterns of inventory usage over time

2. If an item will fall below the order point during the order horizon

3. The overall cost-effectiveness of carrying inventory

4. Daily inventory levels and their economic impact

The correct answer is: If an item will fall below the order point during the order horizon

The time-phased order point (TPOP) method is primarily focused on assessing whether an inventory item will fall below a specified order point during a defined order horizon. This method uses historical data and forecasts to project future inventory levels, taking into account lead times, demand variability, and other logistical factors. By analyzing these elements over the order horizon, the TPOP helps organizations determine if they need to place an order to replenish stock before it dips below the critical threshold that would trigger a stockout. This assessment is crucial for maintaining operational efficiency, as it allows businesses to proactively manage inventory levels and avoid potential disruptions in the supply chain. Proactive management also ensures that the inventory is aligned with customer demand, optimizing both inventory holding costs and service levels. The other options, while relevant to inventory management, do not capture the specific functionality of the TPOP method. For instance, general patterns of inventory usage over time or daily inventory levels might provide useful insights, but they do not specifically address the predictive and threshold-based nature of the TPOP approach in assessing when to reorder items.