[2024] CPIM-8.0 Exam Dumps, Test Engine Practice Test Questions
Pass CPIM-8.0 exam [Apr 19, 2024] Updated 152 Questions
NEW QUESTION # 11
A low-cost provider strategy works best when which of the following conditions are met?
- A. There are many ways to achieve product differentiation.
- B. Price competition among rivals is similar.
- C. There are few industry newcomers.
- D. Buyers are more price sensitive.
Answer: D
Explanation:
A low-cost provider strategy is a business strategy where a company aims to become the most cost-efficient player in its industry, often by producing goods or providing services at a lower cost than its competitors. The overall goal is to increase market share or achieve higher profitability. The low-cost leader in an industry often sets the price that other companies have to match or beat to stay competitive12.
A low-cost provider strategy works best when buyers are more price sensitive, meaning they are more likely to switch to cheaper alternatives if the price of a product or service increases. This condition creates a strong demand for low-priced products or services, and gives the low-cost leader a competitive advantage over rivals who have higher costs and prices. Buyers are more price sensitive when34:
*The product or service is standardized or undifferentiated, and there are few switching costs.
*The product or service represents a significant portion of the buyer's budget or income.
*The product or service has low quality, performance, or image attributes that limit the buyer's satisfaction or loyalty.
*The product or service is not crucial to the buyer's well-being or enjoyment.
The other options are not correct because:
*A. Price competition among rivals is similar. This condition does not favor a low-cost provider strategy, because it implies that the industry is already highly competitive and there is little room for differentiation. A low-cost leader would have to lower its prices even further to gain an edge over rivals, which could erode its profitability and sustainability.
*C. There are many ways to achieve product differentiation. This condition does not favor a low-cost provider strategy, because it implies that the industry is diverse and dynamic, and there are many opportunities for innovation and value creation. A low-cost leader would have to invest more in research and development, marketing, and customer service to keep up with the changing customer preferences and expectations, which could increase its costs and reduce its efficiency.
*D. There are few industry newcomers. This condition does not favor a low-cost provider strategy, because it implies that the industry is mature and stable, and there are few threats from new entrants. A low-cost leader would have to rely on its existing customer base and market share, which could limit its growth potential and expose it to the risk of obsolescence.
References := 1 Low-cost leadership strategy: Explained with examples2 2 Low-Cost Producer: Definition, Strategies, Examples - Investopedia4 3 Low Cost Strategy - Definition, Factors & Example - MBA Skool5 4 Generating Advantage - Strategic Management - Open Educational Resources1
NEW QUESTION # 12
Moving average forecasting methods are best when demand shows:
- A. high random variation.
- B. a cyclical pattern.
- C. a clear trend.
- D. consistent seasonality.
Answer: A
Explanation:
Moving average forecasting methods are best when demand shows high random variation, as they help to smooth out the noise and capture the underlying level of demand. Moving average methods use the average of the most recent observations as the forecast for the next period. They assign equal weights to all observations in the average, and drop the oldest observation when a new one becomes available. Moving average methods are not suitable for demand patterns that show a clear trend, consistent seasonality, or a cyclical pattern, as they cannot capture these components of demand. For these patterns, more sophisticated methods such as exponential smoothing or regression are needed. References: Forecasting with moving averages, APICS CPIM
8 Planning and Inventory Management | ASCM
NEW QUESTION # 13
Which of the following product design approaches are likely to reduce time to market for a global supply chain?
- A. Concurrent engineering
- B. Design for logistics
- C. Design for manufacture
- D. Quality function deployment (QFD)
Answer: A
Explanation:
Concurrent engineering is a product design approach that involves the simultaneous and collaborative involvement of different functional areas, such as engineering, marketing, manufacturing, and suppliers, in the product development process. Concurrent engineering aims to reduce time to market, improve quality, lower costs, and enhance customer satisfaction by integrating and coordinating the inputs and feedback of all the stakeholders from the early stages of design. Concurrent engineering can also facilitate the standardization and modularization of product components, which can improve the flexibility and responsiveness of a global supply chain. References:
Managing Supply Chain Operations, Chapter 3: Product Design and Development, Section 3.2:
Concurrent Engineering
CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.3: Product and Process Design, Subsection 1.3.1: Product and Process Design Concepts
NEW QUESTION # 14
A statistical safety stock calculation would be appropriate for:
- A. new products at time of introduction.
- B. supply-constrained raw materials.
- C. components used in multiple end items.
- D. end items with stable demand.
Answer: D
Explanation:
A statistical safety stock calculation is based on the assumption that demand and lead time are normally distributed and independent. This method is suitable for end items with stable demand, as it can provide a reasonable estimate of the required safety stock to achieve a desired service level. Therefore, option C is correct. Option A is incorrect because components used in multiple end items may have dependent demand, which means that their demand is derived from the demand of the end items. Dependent demand may not follow a normal distribution and may require a different method of safety stock calculation. Option B is incorrect because new products at time of introduction may have uncertain or variable demand, which makes it difficult to apply a statistical safety stock calculation. Option D is incorrect because supply-constrained raw materials may have long and variable lead times, which also complicates the use of a statistical safety stock calculation. References: CPIM Part 2 Exam Content Manual, Version 8.0, Section E: Plan and Manage Inventory, Subsection E.2: Inventory Management Methods, p. 54.
NEW QUESTION # 15
Which of the following capacity planning methods uses the master production schedule (MPS) as its primary input?
- A. Rough-cut capacity planning (RCCP)
- B. Resource planning
- C. Finite loading
- D. Input/output analysis
Answer: A
Explanation:
Rough-cut capacity planning (RCCP) is a type of capacity planning method that uses the master production schedule (MPS) as its primary input. RCCP is a technique for checking the feasibility of the MPS by comparing the available capacity of critical resources (such as machines, labor, or materials) with the capacity required by the MPS. RCCP helps to identify and resolve any potential capacity problems or bottlenecks at an aggregate level, before committing to the MPS. RCCP can also be used to evaluate alternative MPS scenarios and to support the sales and operations planning (S&OP) process12. References: 1 Rough Cut Capacity Planning (RCCP) - Definition, Example, and ... 3 2 CPIM Exam References - Association for Supply Chain Management
NEW QUESTION # 16
Which of the following criteria is used to determine safety stock in a distribution center (DC)?
- A. Seasonal index value
- B. Economic order quantity(EOQ)
- C. Alpha factor level
- D. Probability of stocking out
Answer: D
Explanation:
The probability of stocking out is the likelihood that the demand for an item will exceed the available inventory during a given period. It is one of the criteria used to determine safety stock in a distribution center (DC), as safety stock is inventory that is carried to protect against forecast errors and fluctuations in demand or supply. The higher the probability of stocking out, the more safety stock is needed to avoid customer dissatisfaction and lost sales. The other criteria are not directly related to safety stock. Economic order quantity (EOQ) is the order quantity that minimizes the total inventory holding and ordering costs. Seasonal index value is a measure of how demand varies according to different seasons or periods. Alpha factor level is a parameter used in exponential smoothing to adjust the forecast based on the error between the actual and forecasted demand. References: Safety Stock: A Contingency Plan to Keep Supply Chains Flying High, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 17
The cost accountant has discovered a consistent overage in actual run time for one operation. This information should be sent first to the:
- A. quality manager to add a new quality measurement to the operation.
- B. production supervisor to review and explain the overage.
- C. product manager to increase the selling price of the product.
- D. the engineering manager to evaluate the run time for the routing.
Answer: B
Explanation:
The production supervisor is the most appropriate person to send the information about the overage in actual run time for one operation. The production supervisor is responsible for overseeing the execution of the production plan and ensuring that the operations are performed efficiently and effectively. The production supervisor can review the actual run time data and compare it with the planned run time, identify the possible causes of the overage, and take corrective actions if needed. The production supervisor can also explain the overage to the cost accountant and other stakeholders, such as the product manager, the quality manager, and the engineering manager, and provide feedback for improving the planning and routing of the operation. References:
APICS CPIM Part 2 Exam Content Manual, p. 30
[APICS CPIM Learning System Version 8.0], Module 4, Section D, p. 4-35
NEW QUESTION # 18
For a process that is outside its upper control limit (UCL), which of the following techniques would best be used to return the process under control?
- A. Plot histograms
- B. Monitor control charts
- C. Plan-do-check-action (PDCA)
- D. Conduct a Pareto analysis
Answer: C
Explanation:
Plan-do-check-action (PDCA) is a technique that would best be used to return a process under control when it is outside its upper control limit (UCL). PDCA is a four-step cycle of continuous improvement that involves planning a change, implementing the change, checking the results, and acting on the findings. PDCA can help identify and eliminate the root causes of variation, improve the process performance, and prevent the recurrence of problems. PDCA is also known as the Deming cycle or the Shewhart cycle. References:
Managing Supply Chain Operations, Chapter 9: Quality Management, Section 9.3: Quality Improvement, Subsection 9.3.1: Plan-Do-Check-Act Cycle CPIM Exam Content Manual, Module 8: Quality, Technology and Continuous Improvement, Section
8.2: Continuous Improvement, Subsection 8.2.1: Continuous Improvement Concepts, Subsubsection
8.2.1.1: Plan-Do-Check-Act Cycle
NEW QUESTION # 19
Which of the following statements correctly describes the relationship between the strategic plan and the business plan?
- A. The two plans are the output of a single process.
- B. These are two names for the same plan.
- C. The two plans are developed independently.
- D. The strategic plan constrains the business plan.
Answer: D
Explanation:
A strategic plan is a document that outlines the long-term vision, goals, and direction of an organization. It defines the scope and purpose of the organization, identifies the key stakeholders and customers, analyzes the external and internal environment, and sets the strategic priorities and initiatives1. A business plan is a document that describes the details of a specific business venture, product, or service. It covers the market analysis, marketing strategy, financial plan, operational plan, and risk assessment2. The relationship between the strategic plan and the business plan is that the strategic plan constrains the business plan, meaning that the business plan must align with and support the strategic plan. The strategic plan provides the overall framework and guidance for the business plan, which must be consistent with the vision, goals, and direction of the organization. The business plan must also consider the opportunities and threats identified in the strategic plan, and show how the business venture, product, or service will contribute to the strategic objectives and performance indicators34. References: 1 Strategic Plan vs. Business Plan: What's the Difference? 4 2 Business Plan Definition - Entrepreneur Small Business Encyclopedia 5 3 Difference between a Business vs Strategic Plan | OnStrategy 6 4 CPIM Exam References - Association for Supply Chain Management 1
NEW QUESTION # 20
A company with stable demand that uses exponential smoothing to forecast demand would typically use a:
- A. low alpha value.
- B. high alpha value.
- C. low beta value.
- D. high beta value.
Answer: A
Explanation:
Exponential smoothing is a forecasting method that uses weighted averages of past observations to predict future values. The weights decrease exponentially as the observations get older, giving more importance to recent data. Exponential smoothing can be applied to data with different patterns, such as level, trend, or seasonality. Depending on the pattern, different exponential smoothing models and parameters are used. Two common parameters are alpha () and beta ():
Alpha is the smoothing parameter for the level component of the forecast. The level component is the average or typical value of the data. Alpha can range from 0 to 1, not inclusive. A low alpha value gives more weight to older observations and produces a smoother forecast. A high alpha value gives more weight to recent observations and produces a more responsive forecast.
Beta is the smoothing parameter for the trend component of the forecast. The trend component is the direction and rate of change of the data over time. Beta can also range from 0 to 1, notinclusive. A low beta value gives more weight to older trends and produces a smoother forecast. A high beta value gives more weight to recent trends and produces a more responsive forecast.
A company with stable demand that uses exponential smoothing to forecast demand would typically use a low alpha value. Stable demand means that the data do not have significant variations, fluctuations, or patterns over time. In this case, a simple exponential smoothing model that estimates only the level component is sufficient. A low alpha value would produce a smooth and stable forecast that reflects the average demand level and does not react to random noise or outliers. The other options are not correct, as they either refer to a different parameter (beta) or a different scenario (high alpha value):
A low beta value would be used for data with a trend component, but a stable demand does not have a trend component. A low beta value would produce a smooth and stable trend forecast that does not react to random noise or outliers.
A high beta value would also be used for data with a trend component, but a stable demand does not have a trend component. A high beta value would produce a responsive and dynamic trend forecast that reflects the recent changes in the data.
A high alpha value would be used for data with a high variability or uncertainty, but a stable demand does not have these characteristics. A high alpha value would produce a responsive and dynamic level forecast that reflects the recent changes in the data. References:
[CPIM Part 2 - Section A - Topic 3 - Demand Management]
Exponential Smoothing for Time Series Forecasting
What is alpha and beta in exponential smoothing?
Value of alpha and beta in Holt's exponential smoothing method
NEW QUESTION # 21
An effective approach to projecting requirements for materials with long lead times Includes which of the following options?
- A. Use phantom bills of materials (BOMs).
- B. Decrease the planning horizon.
- C. Increase the level of safety stock.
- D. Initiate a multilevel master schedule.
Answer: D
Explanation:
An effective approach to projecting requirements for materials with long lead times is to initiate a multilevel master schedule. A multilevel master schedule is a detailed plan that shows the quantities and timing of the end items and all of their components at each level of the bill of materials (BOM). By using a multilevel master schedule, a planner can determine the requirements for materials with long lead times and place orders in advance to avoid shortages or delays. A phantom bill of materials (BOM) is a temporary grouping of components that are used in the production of a parent item, but do not exist as a separate item in inventory. A phantom BOM is not an effective approach to projecting requirements for materials with long lead times, as it does not reflect the actual demand for the components. Increasing the level of safety stock is a way of mitigating the risk of uncertainty in demand or supply, but it is not an effective approach to projecting requirements for materials with long lead times, as it increases the inventory carrying costs and does not address the root cause of the problem. Decreasing the planning horizon is the opposite of an effective approach to projecting requirements for materials with long lead times, as it reduces the visibility and accuracy of the forecast and increases the likelihood of stockouts or excess inventory. References:
CPIM Part 2 Learning System, Module 1: Supply Chain Strategy, Section 1.4: Master Scheduling CPIM Part 2 Learning System, Module 3: Supply, Section 3.2: Material Requirements Planning
NEW QUESTION # 22
In pyramid forecasting, the "roll up" process begins with:
- A. allocating product family forecast changes to individual products.
- B. allocating total business forecast changes to product families.
- C. combining individual product item forecasts into forecasts for product families.
- D. combining forecasts for product families into a total business forecast.
Answer: C
Explanation:
Pyramid forecasting is a method of forecasting that uses a hierarchical structure of data to improve the accuracy and consistency of the forecasts. The lowest level of the pyramid represents the most detailed data, such as individual product items, while the higher levels represent more aggregated data, such as product families or total business. The "roll up" process is the process of aggregating the forecasts from the lower level to the higher level, starting with the most detailed level. This process helps to align the forecasts across different levels and reduce the forecast error123 References: 1: Pyramid Forecasting Process 2: Rolling Forecast Model | FP&A Tutorial + Excel Template 3: ROLL-UP FORECASTS
NEW QUESTION # 23
Which of the following conditions is most likely to result in planned production that is greater than the total demand over the sales and operations planning (S&OP) horizon for a product family that is made to stock?
- A. Planned ending inventory for the product family is less than the beginning inventory.
- B. There is a long-term upward trend in demand for the product family.
- C. New models are being added to the product family.
- D. An increase in the customer service level is planned for the product family.
Answer: D
Explanation:
Customer service level is the percentage of customer orders that are fulfilled on time and in full1. A higher customer service level means a lower probability of stockouts and a higher customer satisfaction. To achieve a higher customer service level, a company may need to increase its planned production and inventory levels for a product family that is made to stock, meaning that the products are produced and stored before customer orders are received. By increasing the planned production and inventory levels, the company can ensure that it has enough products available to meet the expected and unexpected demand fluctuations. Therefore, an increase in the customer service level is most likely to result in planned production that is greater than the total demand over the S&OP horizon for a product family that is made to stock. Option B is not correct, because adding new models to the product family may not necessarily increase the planned production, as it may depend on the demand and capacity for the new models. Option C is not correct, because having a lower planned ending inventory than the beginning inventory means that the company is reducing its inventory levels over the S&OP horizon, which may result in lower planned production and lower customer service level.
Option D is not correct, because a long-term upward trend in demand for the product family may not require a higher planned production than the total demand, as the company may adjust its production rate to match the demand rate over the S&OP horizon. References: 1 Customer Service Level: Definition, Standards, Measuring
| SupportYourApp 2
NEW QUESTION # 24
A manufacturer has a primary assembly line supported by output from several subassembly lines. Which of the following scenarios would be the best argument for a multilevel master scheduling process?
- A. High variation in aggregate subassembly demand
- B. Low variation in aggregate subassembly demand
- C. High variation in subassembly demand mix
- D. Low variation in subassembly demand mix
Answer: C
Explanation:
A multilevel master scheduling process is a method of planning and managing the production of complex products that have multiple levels of components and subassemblies. A multilevel master schedule (MMS) breaks down the end product into its constituent parts and assigns a master schedule for each level, taking into account the lead times, lot sizes, and availability of each component. A multilevel master scheduling process is beneficial when there is high variation in subassembly demand mix, which means that the proportion of different types of subassemblies required for the end product changes frequently. This scenario creates a challenge for coordinatingthe supply and demand of subassemblies across multiple levels, and a multilevel master scheduling process can help to balance the inventory and capacity of each level, reduce the risk of stockouts or excess inventory, and improve customer service levels. References := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 23. CPIM Part 2 Learning System, Version 8.0, Module 2, Section B,
NEW QUESTION # 25
Which of the following tools is used to evaluate the impact that a production plan has on capacity?
- A. Demand time fence (DTF)
- B. Safety capacity
- C. Product routing
- D. Bill of resources
Answer: D
Explanation:
A bill of resources is a tool that lists the capacity requirements for each work center or resource group based on the planned production quantities. It is used to evaluate the impact that a production plan has on capacity by comparing the available capacity with the required capacity. A bill of resources can also help identify capacity bottlenecks, excess capacity, and alternative resources. A demand time fence(DTF) is a tool that defines the period of time in which the master production schedule (MPS) is frozen and cannot be changed by customer orders. A product routing is a tool that defines the sequence of operations and work centers required to produce a product. A safety capacity is a tool that provides a buffer against demand and supply uncertainty by adding extra capacity to the planned capacity. These tools are not directly used to evaluate the impact that a production plan has on capacity, although they may affect the capacity planning process. References: Bill of Resources | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 26
In preparing for a facility location decision, proximity to suppliers would be classified as which kind of criteria?
- A. Access to transportation
- B. Cost factors
- C. Service level requirements
- D. Future flexibility factors
Answer: B
Explanation:
Proximity to suppliers would be classified as a cost factor in preparing for a facility location decision. Cost factors are the expenses associated with operating a facility in a specific location, such as labor, materials, utilities, taxes, and transportation. Proximity to suppliers can affect the cost of inbound transportation, inventory holding, and quality control. Choosing a location that is close to suppliers can reduce these costs and improve the efficiency and reliability of the supply chain. References:
Managing Supply Chain Operations, Chapter 2: Global Supply Chain Strategy, Section 2.3: Facility Location CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.4: Facility Location, Subsection 1.4.1: Facility Location Concepts
NEW QUESTION # 27
Capacity requirements planning (CRP) is applicable primarily In companies operating In an environment where:
- A. material requirements planning (MRP) is used.
- B. lean principles are used.
- C. the status of work orders is disregarded.
- D. backlog is very low.
Answer: A
Explanation:
Capacity requirements planning (CRP) is a technique that calculates the capacity needed to produce the planned orders generated by material requirements planning (MRP). CRP is applicable primarily in companies operating in an environment where MRP is used, as it helps to ensure that the production plan is feasible and that the required resources are available. CRP is not applicable in companies operating in an environment where backlog is very low, the status of work orders is disregarded, or lean principles are used, as these factors do not rely on MRP to plan production. References: Capacity Requirements Planning | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 28
In a rapidly changing business environment, a primary advantage of an effective customer relationship management (CRM) program is:
- A. fewer customer defections.
- B. fewer customer order changes.
- C. earlier Identification of shifts Incustomer preferences.
- D. reduced forecast variability.
Answer: C
Explanation:
In a rapidly changing business environment, a primary advantage of an effective customer relationship management (CRM) program is earlier identification of shifts in customer preferences. CRM is a strategy that focuses on building and maintaining long-term relationships with customers by understanding their needs, preferences, and behaviors. CRM enables organizations to anticipate and respond to changes in customer demand, improve customer satisfaction and loyalty, and increase profitability and competitiveness. CRM also helps organizations to segment and target customers based on their value and potential, and to customize products and services accordingly. CRM involves the use of various tools and techniques, such as data collection and analysis, communication channels, feedback mechanisms, and loyalty programs. References:
Managing Supply Chain Operations, Chapter 4: Customer Relationship Management, Section 4.1:
Introduction to Customer Relationship Management
CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.2: Customer Relationship Management, Subsection 1.2.1: Customer Relationship Management Concepts
NEW QUESTION # 29
A company confirms a customer order based on available capacity and inventory, even though the current production plan does not cover the entire order quantity. This situation is an example of what type of order fulfillment policy?
- A. Assemble-to-order (ATO)
- B. Configure-to-order (CTO)
- C. Capable-to-promise (CTP)
- D. Available-to-promise (ATP)
Answer: C
Explanation:
Capable-to-promise (CTP) is a type of order fulfillment policy that confirms a customer order based on the available capacity and inventory, as well as the current production plan and schedule. CTPcalculates the earliest possible delivery date for a customer order, considering the existing demand and supply situation. CTP allows a company to accept an order that exceeds the current available inventory, as long as it can produce the remaining quantity within the customer's requested delivery time. CTP helps to improve customer service, reduce inventory costs, and increase production efficiency12. References: 1 Capable to Promise (CTP) - Definition, Calculation, and Examples 3 2 CPIM Exam References - Association for Supply Chain Management
NEW QUESTION # 30
The primary purpose for engaging in cycle count activities is to:
- A. improve material handling processes and reduce or eliminate errors.
- B. eliminate the need for a traditional physical inventory count.
- C. more frequently reconcile the actual on-hand and system on-hand for items.
- D. smooth out the tasks of counting inventory throughout the fiscal year.
Answer: C
Explanation:
Cycle count is an inventory management technique that involves counting a subset of inventory items on a regular basis, usually based on some sampling criteria1. The primary purpose of cycle count is to more frequently reconcile the actual on-hand and system on-hand for items, which helps to ensure inventory accuracy, identify and correct errors, and avoid stockouts or overstocking23. Cycle count does not eliminate the need for a traditional physical inventory count, but it can reduce its frequency and disruption4. Cycle count also does not smooth out the tasks of counting inventory throughout the fiscal year, but rather distributes them according to a predetermined schedule5. Cycle count may indirectly improve material handling processes and reduce or eliminate errors, but this is not its primary purpose. References:
*What is cycle count in inventory management?
*Inventory Cycle Counting 101: Best Practices & Benefits
*Understanding The Cycle Count In Inventory Management
*What is Inventory Cycle Counting?: A 2023 Guide
*Cycle Count: Everything A Warehouse Manager Should Know
*[CPIM Part 2 Exam Content Manual], p. 40
NEW QUESTION # 31
Which of the following situations is most likely to occur when using a push system?
- A. Work centers are scheduled using finite capacity planning.
- B. Work centers signal previous work centers when they are ready for more work.
- C. Work centers receive work even if capacity is not available.
- D. Work centers operate using decentralized control.
Answer: C
Explanation:
A push system is a production system that operates based on forecasts and schedules, rather than actual customer demand. A push system pushes products to the market regardless of the current demand, and often results in excess inventory and waste. A push system does not consider the capacity constraints of the work centers, and therefore may send work orders to them even if they are not able to process them. This can create bottlenecks, delays, and inefficiencies in the production process12.
The other options are not correct because:
*B. Work centers are scheduled using finite capacity planning. This is not a characteristic of a push system, but rather a pull system. Finite capacity planning is a method of scheduling that takes into account the actual capacity of the work centers, and only releases work orders when there is enough capacity to process them.
This reduces the risk of overloading the work centers and improves the flow of production3.
*C. Work centers operate using decentralized control. This is not a characteristic of a push system, but rather a pull system. Decentralized control is a method of management that gives more autonomy and decision-making power to the work centers, and allows them to adjust their production according to the actual demand and capacity. This increases the flexibility and responsiveness of the production system4.
*D. Work centers signal previous work centers when they are ready for more work. This is not a characteristic of a push system, but rather a pull system. This is a common practice in a pull system that uses kanban cards as visual signals to trigger the production or replenishment of a product. The work centers only request more work when they have enough capacity and demand for it, and avoid overproduction and waste5.
References := 1 Push System vs. Pull System: Adopting A Hybrid Approach To MRP1 2 Push Systems vs.
Pull System: Definitions and Differences4 3 Finite Capacity Planning - an overview | ScienceDirect Topics 4 Centralized vs. Decentralized Manufacturing | IndustryWeek 5 Kanban - an overview | ScienceDirect Topics
NEW QUESTION # 32
An advantage of applying ABC classification to a firm's replenishment items is that:
- A. it allows planners to focus on critical products.
- B. it allows the firm to utilize time-phased order point (TPOP).
- C. it distinguishes independent demand from dependent demand.
- D. it provides better order quantities than the economic order quantity (EOQ).
Answer: A
Explanation:
ABC classification is a method of inventory management that categorizes items based on their annual consumption value, which is the product of the annual demand and the unit cost. Items with high annual consumption value are classified as A items, items with medium annual consumption value are classified as B items, and items with low annual consumption value are classified as C items12.
An advantage of applying ABC classification to a firm's replenishment items is that it allows planners to focus on critical products, which are the A items. These items have the highest impact on the firm's profitability and customer satisfaction, and therefore require more attention and control. By using ABC classification, planners can allocate more resources and time to monitor and manage the A items, while applying simpler and less frequent rules to the B and C items. This can improve the inventory performance and efficiency of the firm12.
The other options are not correct because:
*A. it distinguishes independent demand from dependent demand. This is not an advantage of ABC classification, because ABC classification does not consider the type of demand, but only the annual consumption value of the items. Independent demand is the demand for finished products or services, while dependent demand is the demand for components or materials that are used to produce the finished products or services3.
*C. it provides better order quantities than the economic order quantity (EOQ). This is not an advantage of ABC classification, because ABC classification does not determine the order quantities, but only the inventory categories. EOQ is a formula that calculates the optimal order quantity that minimizes the total inventory costs, such as ordering costs and holding costs.
*D. it allows the firm to utilize time-phased order point (TPOP). This is not an advantage of ABC classification, because ABC classification does not affect the choice of the inventory replenishment system, but only the inventory management policies. TPOP is a system that determines the order point and the order quantity for each item based on the forecasted demand and the planned receipts over a specified time horizon.
References := 1 ABC Inventory Analysis & Management | NetSuite1 2 What Is ABC Inventory Classification?
| Business.org2 3 Independent Demand vs Dependent Demand: What's the Difference? Economic Order Quantity (EOQ) - Overview, Formula, and Example Time-Phased Order Point (TPOP) - an overview | ScienceDirect Topics
NEW QUESTION # 33
Which of the following statements about demonstrated capacity Is true?
- A. It reflects the future load.
- B. It should be higher than rated capacity.
- C. It is determined from actual results.
- D. It considers utilization and efficiency factors.
Answer: C
Explanation:
Demonstrated capacity is the actual output achieved by a resource or a system over a period of time, such as a day, a week, or a month. It is determined from actual results, such as production records, time studies, or historical data. Demonstrated capacity reflects the past performance, not the future load, of a resource or a system. It may be lower or higher than the rated capacity, which is the theoretical or design capacity of a resource or a system. Demonstrated capacity considers utilization and efficiency factors, such as machine availability, operator skills, product mix, quality issues, or maintenance schedules, that affect the actual output. References:
Managing Supply Chain Operations, Chapter 5: Capacity Planning and Management, Section 5.2:
Capacity Planning Decisions, page 132-133.
Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, Chapter 6: Capacity Management, Section 6.2: Capacity Planning, page 156-157.
CPIM 8.0 Exam Content Manual Preview, Module 5: Plan and Manage Supply, Section 5.1: Plan and Manage Capacity, page 9.
NEW QUESTION # 34
One of the benefits of Integrating a poka-yoke into the production process is that it can be used to:
- A. prevent defects.
- B. enable one-piece flow.
- C. facilitate mixed-model scheduling.
- D. Improve machine utilization.
Answer: A
Explanation:
Poka-yoke is a Japanese term that means "mistake-proofing". It is a lean tool that aims to eliminate errors and defects by designing processes or products in such a way that mistakes are either prevented or detected and corrected immediately. Poka-yoke can be applied in various ways, such as using sensors, guides, checklists, alarms, or color-coding, to ensure that the process or product meets the quality standards and customer expectations. One of the benefits of integrating poka-yoke into the production process is that it can be used to prevent defects, which can result in lower costs, higher customer satisfaction, and improved productivity. By avoiding defects, poka-yoke can also reduce waste, rework, inspection, and warranty claims, as well as enhance safety and reliability. References := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 29. CPIM Part 2 Learning System, Version 8.0, Module 3, Section C, Topic 2.
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