CMRP EXAM QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2025-2026
ABC, Activity based costing - Answers Usually refers to costing method that breaks down
overhead costs into specific activities (cost drivers) in order to more accurately distribute the
costs in product costing. Has also been applied to customer and vendor management.
ABC stratification - Answers Method used to categorize inventory into groups based upon
certain activity characteristics. Examples of ABC stratifications would include ABC by velocity
(times sold), ABC by sales dollars, ABC by quantity sold / consumed, ABC by average inventory
investment, ABC by margin. ABC stratifications are used to develop inventory-planning policies,
set count frequencies for cycle counting, slot inventory for optimized order picking, and other
inventory management activities.
Allocations - Answers Allocations in inventory management refer to actual demand created by
sales orders or work orders against a specific item. The terminology and the actual processing
that controls allocations will vary from one software system to another.
Vendor-managed inventory - Answers Phrase used to describe the process of a supplier
managing the inventory levels and purchases of the materials he supplies. This process can be
very low tech, such as an office supplies supplier or maintenance supplies supplier coming into
your facility once per week to visually check stock levels and place a re-supply order, or high
tech, such as an electronic component supplier having remote access to your inventory
management and MRP system and producing and automatically shipping to meet your
production schedule. Vendor-managed inventory reduces internal costs associated with
planning and procuring materials and enables the vendor to better manage his inventory
through higher visibility to the supply chain. Vendor-managed inventory may be owned by the
vendor (consignment inventory) or the customer.
Wave picking - Answers A variation on zone picking where rather than orders moving from one
zone to the next for picking, all zones are picked at the same time and the items are later sorted
and consolidated into individual orders. Wave picking is the quickest method for picking multi
item orders; however the sorting and consolidation process can be tricky. See also batch
picking, zone picking.
ASN, Advanced shipment notification (EDI 856) - Answers Advanced shipment notifications are
used to notify a customer of a shipment. ASNs will often include PO numbers, SKU numbers, lot
numbers, quantity, pallet or container number, and carton number. ASNs may be paper-based,
however, electronic notification is preferred. Advanced shipment notification systems are
usually combined with bar-coded compliance labeling which allows the customer to receive the
shipment into inventory through the use of bar-code scanners and automated data collection
systems.
Auto discrimination - Answers The functionality of a bar-code reader to recognize the bar-code
symbol being scanned, thus allowing a reader to read several different symbols consecutively.
, Batch picking - Answers Order picking method where orders are grouped into small batches, an
order picker will pick all orders within the batch in one pass. Batch picking is usually associated
with pickers with multi-tiered picking carts moving up and down aisles picking batches of
usually 4 to 12 orders, however, batch picking is also very common when working with
automated material handling equipment such as carousels. See also Zone picking, Wave
picking.
Blind counts - Answers Describes method used in cycle counting and physical inventories where
you provide your counters with item number and location but no quantity information.
BOM, Bill of material - Answers Lists materials (components or ingredients) required to produce
an item. Multilevel BOMs also show subassemblies and their components. Other information
such as scrap factors may also be included in the BOM for use in materials planning and
costing.
BULK - Answers Term usually thought of as describing inventory arriving or being produced in
the manufacturers standard unit of sale, usually full-case quantities.
Warehouse management system, WMS - Answers Computer software designed specifically for
managing the movement and storage of materials throughout the warehouse. WMS
functionality is generally broken down into the following three operations: Put away,
Replenishment, and Picking. The key to these systems is the logic to direct these operations to
specific locations based on user-defined criteria. WMSs are often set up to integrate with data-
collection systems. In Materials Management, these systems are referred to as MMIS
(Materials Management Information Systems.)
Carrying cost - Answers This is the cost associated with holding inventory. This includes the
cost to finance the inventory purchase as well as the general inventory shrinkage (e.g., pilferage,
outdating and damage to product.)
Compliance labels - Answers Standardized label formats used by trading partners. Compliance
labels are used as shipping labels, container/pallet labels, carton labels, or piece labels, and
usually contain bar codes. Many bar-code labeling software products now have the more
common compliance label standards set up as templates.
Consignment inventory - Answers Inventory that is in the possession of the customer, but is still
owned by the supplier. Consignment inventory is used as a marketing tool to make it easier for
a customer to stock a specific supplier's inventory. The customer pays for the inventory only
after it is resold or consumed.
Contract warehouse - Answers A contract warehouse is a business that handles shipping,
receiving, and storage of products on a contract basis. Contract warehouses will generally
require a client to commit to a specific period of time (generally in years) for the services.
Contracts may or may not require clients to purchase or subsidize storage and material-
ABC, Activity based costing - Answers Usually refers to costing method that breaks down
overhead costs into specific activities (cost drivers) in order to more accurately distribute the
costs in product costing. Has also been applied to customer and vendor management.
ABC stratification - Answers Method used to categorize inventory into groups based upon
certain activity characteristics. Examples of ABC stratifications would include ABC by velocity
(times sold), ABC by sales dollars, ABC by quantity sold / consumed, ABC by average inventory
investment, ABC by margin. ABC stratifications are used to develop inventory-planning policies,
set count frequencies for cycle counting, slot inventory for optimized order picking, and other
inventory management activities.
Allocations - Answers Allocations in inventory management refer to actual demand created by
sales orders or work orders against a specific item. The terminology and the actual processing
that controls allocations will vary from one software system to another.
Vendor-managed inventory - Answers Phrase used to describe the process of a supplier
managing the inventory levels and purchases of the materials he supplies. This process can be
very low tech, such as an office supplies supplier or maintenance supplies supplier coming into
your facility once per week to visually check stock levels and place a re-supply order, or high
tech, such as an electronic component supplier having remote access to your inventory
management and MRP system and producing and automatically shipping to meet your
production schedule. Vendor-managed inventory reduces internal costs associated with
planning and procuring materials and enables the vendor to better manage his inventory
through higher visibility to the supply chain. Vendor-managed inventory may be owned by the
vendor (consignment inventory) or the customer.
Wave picking - Answers A variation on zone picking where rather than orders moving from one
zone to the next for picking, all zones are picked at the same time and the items are later sorted
and consolidated into individual orders. Wave picking is the quickest method for picking multi
item orders; however the sorting and consolidation process can be tricky. See also batch
picking, zone picking.
ASN, Advanced shipment notification (EDI 856) - Answers Advanced shipment notifications are
used to notify a customer of a shipment. ASNs will often include PO numbers, SKU numbers, lot
numbers, quantity, pallet or container number, and carton number. ASNs may be paper-based,
however, electronic notification is preferred. Advanced shipment notification systems are
usually combined with bar-coded compliance labeling which allows the customer to receive the
shipment into inventory through the use of bar-code scanners and automated data collection
systems.
Auto discrimination - Answers The functionality of a bar-code reader to recognize the bar-code
symbol being scanned, thus allowing a reader to read several different symbols consecutively.
, Batch picking - Answers Order picking method where orders are grouped into small batches, an
order picker will pick all orders within the batch in one pass. Batch picking is usually associated
with pickers with multi-tiered picking carts moving up and down aisles picking batches of
usually 4 to 12 orders, however, batch picking is also very common when working with
automated material handling equipment such as carousels. See also Zone picking, Wave
picking.
Blind counts - Answers Describes method used in cycle counting and physical inventories where
you provide your counters with item number and location but no quantity information.
BOM, Bill of material - Answers Lists materials (components or ingredients) required to produce
an item. Multilevel BOMs also show subassemblies and their components. Other information
such as scrap factors may also be included in the BOM for use in materials planning and
costing.
BULK - Answers Term usually thought of as describing inventory arriving or being produced in
the manufacturers standard unit of sale, usually full-case quantities.
Warehouse management system, WMS - Answers Computer software designed specifically for
managing the movement and storage of materials throughout the warehouse. WMS
functionality is generally broken down into the following three operations: Put away,
Replenishment, and Picking. The key to these systems is the logic to direct these operations to
specific locations based on user-defined criteria. WMSs are often set up to integrate with data-
collection systems. In Materials Management, these systems are referred to as MMIS
(Materials Management Information Systems.)
Carrying cost - Answers This is the cost associated with holding inventory. This includes the
cost to finance the inventory purchase as well as the general inventory shrinkage (e.g., pilferage,
outdating and damage to product.)
Compliance labels - Answers Standardized label formats used by trading partners. Compliance
labels are used as shipping labels, container/pallet labels, carton labels, or piece labels, and
usually contain bar codes. Many bar-code labeling software products now have the more
common compliance label standards set up as templates.
Consignment inventory - Answers Inventory that is in the possession of the customer, but is still
owned by the supplier. Consignment inventory is used as a marketing tool to make it easier for
a customer to stock a specific supplier's inventory. The customer pays for the inventory only
after it is resold or consumed.
Contract warehouse - Answers A contract warehouse is a business that handles shipping,
receiving, and storage of products on a contract basis. Contract warehouses will generally
require a client to commit to a specific period of time (generally in years) for the services.
Contracts may or may not require clients to purchase or subsidize storage and material-
