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ASCM CSCP · 24 Essential Terms
24 essential CSCP inventory terms: order quantity, buffers, record accuracy, service, and the replenishment rules that show up together on the exam.
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The order quantity that minimizes the sum of ordering cost and inventory holding cost for a relatively stable demand item.
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Every term, pronunciation, definition, memory hook, and exam trap is written out here so you can review the whole set or print it.
ee-kuh-NOM-ik OR-der KWAHN-tuh-tee
The order quantity that minimizes the sum of ordering cost and inventory holding cost for a relatively stable demand item.
Mnemonic. EOQ balances the cost of placing orders against the cost of holding what those orders create.
Exam trap. EOQ is a cost minimum, not a service-level target. Safety stock, not a bigger EOQ by itself, is what buffers variability.
SAYF-tee stok
Extra inventory held to absorb variability in demand or lead time so a stockout is less likely.
Mnemonic. Safety stock is the cushion, not the cycle stock you expect to sell every replenishment.
Exam trap. Do not add safety stock twice. If the reorder point already includes it, a second buffer in the order quantity double-counts the same uncertainty.
ree-OR-der point
The inventory position at which a replenishment order is released. In the basic model it equals demand during lead time plus safety stock.
Mnemonic. ROP is the trigger, not the quantity you order.
Exam trap. The trap is using on-hand units and ignoring quantity already on order. Inventory position includes scheduled receipts.
ay bee see uh-NAL-ih-sis
A ranking of items, often by annual dollar usage, so a few A items get tight control and many C items get simpler control.
Mnemonic. ABC is Pareto applied to inventory: a little of the list is most of the money.
Exam trap. C does not mean unimportant to a customer. A cheap C item can still stop a line. The class describes control effort, not whether the part can be skipped.
SY-kul KOWN-ting
Counting a portion of inventory on a rotating schedule, with the counts reconciled to the record, instead of relying only on one annual physical inventory.
Mnemonic. Cycle count a slice every day so the record never waits a year to be told the truth.
Exam trap. The purpose is an accurate record and a found process error, not a once-a-year write-off. A items are usually counted more often than C items.
HOHL-ding kost
The cost of having inventory sit: capital, storage, insurance, obsolescence, damage, and taxes tied to the units you own.
Mnemonic. Holding cost is the rent the inventory charges you for staying.
Exam trap. Purchase price is not holding cost. The exam separates the price you pay the supplier from the cost of keeping the unit after it arrives.
STOK-owt
A demand that cannot be filled from available inventory when the customer or the next process wants it.
Mnemonic. A stockout is a missed handoff, and its cost includes the lost sale and the disrupted customer, not just a zero on the shelf.
Exam trap. Do not assume every stockout should be solved with more safety stock. A bad forecast, a long lead time, or a record error can be the real cause.
SY-kul stok
The inventory that rises when a replenishment arrives and falls as normal demand consumes it, before safety stock is considered.
Mnemonic. Cycle stock is the sawtooth you expected. Safety stock is the floor under that sawtooth.
Exam trap. If a question says the shipment is the regular lot and demand is steady, the inventory being consumed is cycle stock, not safety stock and not pipeline stock.
PY-plyn IN-ven-tor-ee
Inventory in transit between stages, including goods on a truck, a ship, or a production routing that have left one stocking point and not yet reached the next.
Mnemonic. Pipeline stock is the inventory that is already moving.
Exam trap. Do not add pipeline inventory to the on-hand balance used for a reorder point. It is not available to pick until it arrives.
dee-KUP-ling IN-ven-tor-ee
Inventory placed between two operations so a stoppage or a rate change in one does not immediately stop the other.
Mnemonic. Decoupling stock is a shock absorber between two steps.
Exam trap. It is not safety stock for customer demand. The exam wants the buffer that lets two internal processes run at different rates.
hej IN-ven-tor-ee
Inventory bought or built ahead of a likely price increase, shortage, or other supply risk, rather than to fill a current customer order.
Mnemonic. Hedge stock is a bet against a supply shock, not a bet on this week's demand.
Exam trap. Do not call every early buy hedge inventory. If the reason is a known seasonal peak, the closer label is anticipation inventory.
an-tih-sih-PAY-shun IN-ven-tor-ee
Inventory built before a predictable peak, such as a season or a promotion, because capacity cannot match the peak when it arrives.
Mnemonic. Anticipation stock is how you store capacity before the rush.
Exam trap. The trap is treating a one-time price hedge as anticipation inventory. Anticipation follows a demand calendar you already expect.
ob-suh-LEET IN-ven-tor-ee
Inventory that no longer has a realistic demand, often because the product, the design, or the customer need has changed.
Mnemonic. Obsolete stock is product the plan no longer wants.
Exam trap. Do not keep calling it safety stock because it is still on the shelf. No demand means it is not a buffer; it is a write-down waiting for a decision.
kun-SYNE-munt IN-ven-tor-ee
Goods stored at one party's location while the other party still owns them, often until they are used or sold.
Mnemonic. Consignment is location without ownership.
Exam trap. The trap is putting consignment units into your own asset balance and your own holding-cost math. Ownership decides who carries the inventory.
IN-ven-tor-ee TURN-oh-ver
How many times the average inventory is sold or used during a period, often cost of goods sold divided by average inventory.
Mnemonic. Turnover asks how many times the pile was replaced.
Exam trap. A higher turnover is not automatically better if it comes from stockouts. Pair the ratio with a service measure before you call the inventory healthy.
dayz uv suh-PLY
How long the current on-hand inventory would last at the expected rate of demand, usually on-hand divided by average daily demand.
Mnemonic. Days of supply turns a unit count into time.
Exam trap. Do not mix days of supply with lead time. Lead time is how long a replenishment takes. Days of supply is how long today's stock lasts.
fil rayt
The share of demand filled from stock on hand, often measured in order lines or units, without promising that every other perfect-order condition was met.
Mnemonic. Fill rate is whether you had the goods, not whether the whole order was perfect.
Exam trap. A high fill rate can still hide lateness, damage, or bad paperwork. Perfect order is the stricter score.
SER-vis LEV-ul
The planned probability of not stocking out during a replenishment cycle, or a stated policy for how often demand should be met from stock.
Mnemonic. Service level is the promise you fund with safety stock.
Exam trap. Do not treat service level as the same number as fill rate. Cycle service level is about stocking out during a cycle. Fill rate is about how much demand was filled.
per-PET-choo-ul IN-ven-tor-ee
A record updated continuously as receipts and issues happen, so the book balance is current instead of waiting for a periodic count.
Mnemonic. Perpetual means the record moves when the product moves.
Exam trap. A perpetual record is not self-proving. Cycle counts still exist because the book and the shelf drift apart.
peer-ee-OD-ik ree-VYOO
A replenishment rule that checks inventory on a fixed calendar and orders enough to return to a target level, even if the reorder point was not crossed yesterday.
Mnemonic. Periodic review watches the calendar. Continuous review watches the quantity.
Exam trap. The trap is ordering a fixed quantity on every review date. The usual periodic order tops the position up to a target, so the quantity changes.
min maks SIS-tum
A replenishment rule with a minimum that triggers an order and a maximum that caps how high inventory should be restored.
Mnemonic. Min starts the order. Max stops how much you bring in.
Exam trap. Do not set the minimum equal to the order quantity. The minimum is a trigger level. The gap from the position up to the maximum is closer to what you order.
too bin SIS-tum
A simple pull rule: use the working bin, and when it is empty start the reserve bin and reorder. The reserve bin is sized to cover demand during lead time.
Mnemonic. The empty bin is the signal. The full bin is the cover.
Exam trap. It is a visual reorder point, not a statistical safety-stock model. If lead time grows and the reserve bin does not, the signal arrives too late.
SHRING-kij
Inventory lost to theft, damage, miscounts, or other unexplained gaps between the book balance and what a count finds.
Mnemonic. Shrinkage is the inventory the record still loves and the shelf cannot find.
Exam trap. Do not book shrinkage as a forecast-error adjustment. The remedy is a count, a process fix, and a loss, not a bigger EOQ.
ess kay yoo
Stock keeping unit: the specific item identity a company tracks, distinct in a way that matters for inventory, such as size, color, or pack.
Mnemonic. A SKU is the identity you count, not the brand family you advertise.
Exam trap. The trap is treating every customer name for the same item as a new SKU, or treating two pack sizes as one SKU. The record follows how you store and sell it.