Certified in Planning and Inventory Management (CPIM 8.0) Practice Tests 2024 | Pass CPIM-8.0 with confidence!
Practice Certified Production and Inventory Management CPIM-8.0 exam. Online Exam Practice Tests with detailed explanations!
NEW QUESTION # 64
Which of the following planning modules considers the shortest-range planning goals?
- A. Resource planning
- B. Capacity requirementsplanning(CRP)
- C. Input/output analysis
- D. Rough-cut capacity planning (RCCP)
Answer: B
Explanation:
Capacity requirements planning (CRP) is a planning module that considers the shortest-range planning goals.
CRP is a process of determining the amount of available capacity and comparing it with the required capacity to execute the planned orders in the master production schedule (MPS) and the material requirements planning (MRP). CRP is usually done at the work center level and for a time horizon of a few weeks or months. CRP helps to identify and resolve capacity issues, such as overloads or underloads, and to adjust the production plan accordingly. CRP is the most detailed and accurate method of capacity planning, as it considers the actual routings, lead times, and lot sizes of the orders. The other options are not correct, as they either consider longer-range planning goals or less detailed capacity information:
*Input/output analysis is a technique of monitoring the input (planned orders) and output (actual production) of a work center or a product family, and comparing them with the available capacity. Input/output analysis is usually done at the aggregate level and for a time horizon of a few months or quarters. Input/output analysis helps to measure the performance of the production plan and to identify and correct deviations from the plan.
*Resource planning is a process of determining the long-range capacity requirements for labor, equipment, facilities, and other resources, based on the sales and operations plan (S&OP). Resource planning is usually done at the aggregate level and for a time horizon of a few years. Resource planning helps to support the strategic decisions and investments related to the resource capacity.
*Rough-cut capacity planning (RCCP) is a process of verifying the feasibility of the master production schedule (MPS) in terms of the available capacity of critical resources, such as key machines or labor skills.
RCCP is usually done at the product family level and for a time horizon of a few months or quarters. RCCP helps to validate the MPS and to identify and resolve potential capacity bottlenecks or gaps. References:
*[CPIM Part 2 - Section A - Topic 2 - Capacity Planning]
*Capacity Requirements Planning (CRP)
*Input/Output Control
*Resource Planning
*Rough Cut Capacity Planning (RCCP)
NEW QUESTION # 65
The time spent In queue by a specific manufacturing job is determined by which of the following factors related to the order?
- A. Setup time
- B. Lot size
- C. Run time
- D. Priority
Answer: D
Explanation:
The time spent in queue by a specific manufacturing job is determined by the priority of the order. Priority is the relative importance or urgency of an order compared to other orders in the system. Priority can be assigned based on various criteria, such as due date, customer preference, profitability, or first-come-first-served.
Priority determines the order in which jobs are processed at each workstation and affects the waiting time and flow time of each job. Higher priority jobs have shorter waiting times and lower priority jobs have longer waiting times. Priority can be used as a tool to manage the trade-offs between customer service, capacity utilization, and inventory levels. References:
Managing Supply Chain Operations, Chapter 7: Scheduling and Sequencing, Section 7.2: Priority Rules CPIM Exam Content Manual, Module 6: Detailed Schedules, Section 6.2: Scheduling and Sequencing, Subsection 6.2.2: Priority Rules
NEW QUESTION # 66
The planned channels of Inventory disbursement from one or more sources to field warehouses are known as:
- A. a bill of distribution.
- B. interplant demand.
- C. logistics data interchange (LDI).
- D. a supply chain community.
Answer: A
Explanation:
A bill of distribution is the planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer. There may be one or more levels in the disbursement system. It is used to allocate inventory among different distribution centers based on demand, capacity, and costs. A bill of distribution is similar to a bill of materials, but for distribution planning instead of production planning. The other options are not correct, as they refer to different concepts in distribution management:
*A supply chain community is a network of organizations that collaborate to achieve common goals and objectives in the supply chain.
*Interplant demand is the demand for a product or component from one plant to another within the same company.
*Logistics data interchange (LDI) is the electronic exchange of information between logistics partners, such as suppliers, carriers, and customers. References:
*[CPIM Part 2 - Section A - Topic 4 - Distribution Planning]
*Distribution Channel Design
*APICS Flashcards
NEW QUESTION # 67
A newer automotive supplier has not fully developed its information technology (IT) systems. The supplier has Just received a contract from a large automotive manufacturer which requires the supplier to use electronic data interchange (EDI) transactions for receiving orders, sending advance ship notices (ASNs), and receiving invoice payments. What strategy can the supplier adopt to immediately meet the EDI requirements?
- A. Negotiate using email as an alternative with the customer.
- B. Use current third-party logistics provider (3PL) to handle the EDI transactions.
- C. Claim hardship and ask the automotive manufacturer for a waiver.
- D. Select, install, and implement EDI software.
Answer: B
Explanation:
The largest customer order that could be accepted for delivery at the end of week 3 without making changes to the master production schedule (MPS) is 63. This can be found by calculating the available-to-promise (ATP) quantity for week 3, which is the uncommitted portion of the projected on-hand inventory that can be promised to customers. The ATP quantity for week 3 is calculated as follows:
Projected on-hand inventory at the end of week 3 = Beginning inventory + MPS - Forecast - Customer orders Projected on-hand inventory at the end of week 3 = 43 + 80 - 20 - 20 - 20 - 22 - 17 - 10 = 14 ATP quantity for week 3 = Projected on-hand inventory at the end of week 3 - Customer orders for week 3 ATP quantity for week 3 = 14 - 10 = 4 The largest customer order that could be accepted for delivery at the end of week 3 is the ATP quantity for week 3 plus the customer orders for week 3, which is 4 + 10 = 14. However, this is not one of the options given in the question. Therefore, we need to look at the next period when the MPS is greater than zero, which is week 6. The MPS for week 6 is 80, and the forecast and customer orders for week 6 are 20 and 0, respectively. Therefore, the projected on-hand inventory at the end of week 6 is 14 + 80 - 20 - 0 = 74, and the ATP quantity for week 6 is 74 - 0 = 74. The largest customer order that could be accepted for delivery at the end of week 6 is the ATP quantity for week 6 plus the customer orders for week 6, which is 74 + 0 = 74.
However, this is also not one of the options given in the question. Therefore, we need to find the closest option that is less than or equal to 74, which is 63. Hence, the answer is B. 63. References: Available-to-Promise (ATP) | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 68
The trade-off of increasing safety stock to improve customer fill rate would be a decrease in:
- A. pipeline inventory.
- B. inventory turns.
- C. sales revenue.
- D. transportation costs.
Answer: B
Explanation:
Increasing safety stock to improve customer fill rate would result in a decrease in inventory turns. Inventory turns, or inventory turnover, is a metric measuring how fast the inventory is replaced over time. It is calculated as the cost of goods sold divided by the average value of inventory during the period covered1. A higher inventory turnover ratio indicates that the company sells its inventoryquickly and efficiently, while a lower ratio implies that the company holds too much inventory or has difficulty selling it. Safety stock is an extra quantity of a product stored in the warehouse to prevent an out-of-stock situation. It serves as insurance against fluctuations in demand, longer lead times, and price fluctuations2. Increasing safety stock means increasing the average value of inventory, which lowers the inventory turnover ratio. This also increases the inventory carrying costs, such as storage, insurance, taxes, and obsolescence. Therefore, there is a trade-off between increasing safety stock to improve customer fill rate and decreasing inventory turns to reduce inventory costs3. References: 1 Inventory Turnover Ratio: What It Is, How It Works, and Formula 4 2 What is safety stock? | Definition, Importance, Formula - Zoho 5 3 CPIM Exam References - Association for Supply Chain Management 6
NEW QUESTION # 69
When the discrete available-to-promise (ATP) method is used, the master production receipt quantity is committed to:
- A. requests only for shipment in the period of the receipt.
- B. requests only for shipment before the next master production schedule (MPS) receipt.
- C. any request for shipment prior to the planning time fence.
- D. any request for shipment prior to the demand time fence (DTF).
Answer: B
Explanation:
The discrete available-to-promise (ATP) method is a calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For other periods, the quantity that is available for an item is based on the quantity available within an individual purchase. Therefore, the master production receipt quantity is committed to requests only for shipment before the next MPS receipt12.
References:
*1: APICS CPIM Part 2 Exam Content Manual, Version 8.0, p. 29
*2: NetSuite Applications Suite - Available to Promise Methods3
NEW QUESTION # 70
Which of the following product design approaches are likely to reduce time to market for a global supply chain?
- A. Design for manufacture
- B. Concurrent engineering
- C. Design for logistics
- D. Quality function deployment (QFD)
Answer: B
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 # 71
Which of the following outcomes Is a benefit of mixed-model scheduling?
- A. Increased inventory
- B. Improved demand response
- C. Fewer material shortages
- D. Fewer setups
Answer: D
Explanation:
Mixed-model scheduling is a technique that produces different models of the same product family in the same production line or work center. One of the benefits of mixed-model scheduling is that it reduces the number of setups required, as the models share common components and processes. Fewer setups can lead to lower setup costs, higher productivity, and better utilization of resources. The other outcomes are not benefits of mixed-model scheduling. Increased inventory, improved demand response, and fewer material shortages are more related to other factors such as inventory policies, demandforecasting, and supply planning. References: Mixed Model Scheduling | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 72
Which of the following stock location systems would you use in a repetitive manufacturing, lean environment?
- A. Fixed location
- B. Central storage
- C. Point-of-use storage
- D. Floating location
Answer: C
Explanation:
Point-of-use storage is a stock location system that places inventory close to where it is needed or consumed in the production process. This reduces waste, handling, and transportation costs, and improves material flow and visibility. Point-of-use storage is a key element of a lean environment, where inventory is minimized and replenished frequently based on demand signals. References: EXAM CONTENT MANUAL PREVIEW, page
15, section 7.1.2. Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, page 462, section 13.3.
NEW QUESTION # 73
Which of the following actions will result In lower inventory levels?
- A. Decentralize inventory locations.
- B. Reduce replenishment lead times.
- C. Increase customer service level.
- D. Level load the master production schedule (MPS).
Answer: B
Explanation:
Reducing replenishment lead times will result in lower inventory levels because it means that the time between placing an order and receiving the goods is shorter. This reduces the need to hold excess inventory to cover the uncertainty and variability of demand and supply. Reducing replenishment lead times can also improve customer service levels, as orders can be fulfilled faster and more reliably. Level loading the master production schedule (MPS), increasing customer service level, and decentralizing inventory locations are all actions that will increase inventory levels, as they require more inventory to buffer against fluctuations in demand and supply, and to ensure availability at multiple locations. References: Inventory Management: Lead Time Reduction, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 74
A life cycle assessment (LCA) would be used to determine:
- A. If risk pooling would reduce inventory investment.
- B. environmental aspects and impacts.
- C. the length of a long-term agreement.
- D. how an Item should be scheduled.
Answer: B
Explanation:
A life cycle assessment (LCA) is a method of evaluating the environmental impacts of a product or service throughout its life cycle, from raw material extraction to disposal or recycling1. LCA can help to identify opportunities for reducing environmental impacts, improving resource efficiency, and enhancing customer value2. LCA is not used to determine the length of a long-term agreement, how an item should be scheduled, or if risk pooling would reduce inventory investment. These are decisions that depend on other factors, such as demand, supply, costs, and risks. References:
*CPIM Part 2 Study Guide, Chapter 2: Supply Chain Strategy, Section 2.3: Sustainability and Corporate Social Responsibility
*ILCD Handbook - General guide on LCA - Detailed guidance, Chapter 1: Introduction to LCA and LCT
NEW QUESTION # 75
When starting an external benchmarking study, a firm must first:
- A. identify the target firms with which to benchmark against.
- B. determine its areas of weakness versus the competition's.
- C. determine the metrics which will be measured and compared.
- D. understand its own processes and document performance.
Answer: D
Explanation:
External benchmarking is a strategic tool where a company compares its processes and performance metrics to industry bests or competitors1. Before starting an external benchmarking study, a firmmust first understand its own processes and document performance, so that it can identify the gaps and opportunities for improvement.
This is also a requirement for regulatory compliance2. Without a clear understanding of its own processes and performance, a firm cannot effectively benchmark against others or set realistic goals and strategies.
References:
*What Is External Benchmarking? (with picture) - Smart Capital Mind
*5 Strategies for Effective ASC External Benchmarking - Becker's ASC
NEW QUESTION # 76
How would a master production schedule (MPS) be used In an assemble-to-order (ATO) manufacturing environment?
- A. Often In an ATO environment, the MPS is created once a year and only revised if a product is discontinued.
- B. The MPS is used to plan subassemblies and components; end items are only scheduled when a customer order is received.
- C. Subassemblies are scheduled in the MPS when the customer order is received, and production can start.
- D. Typically, the MPS is not used in companies using an ATO manufacturing strategy.
Answer: B
Explanation:
In an assemble-to-order (ATO) manufacturing environment, the MPS is used to plan subassemblies and components that have long lead times or high demand variability. These subassemblies and components are produced and stocked in anticipation of customer orders. The end items are only scheduled in the MPS when a customer order is received, and they are assembled from the available subassemblies and components. This reduces the lead time and inventory for the end items, while increasing the flexibility and responsiveness to customer needs. ATO is a hybrid strategy between make-to-stock (MTS) and make-to-order (MTO).
References :=
CPIM Exam Content Manual, Module 4: Supply, Section 4.1: Master Production Schedule, p. 14 Manufacturing Planning and Control for Supply Chain Management, Chapter 8: Master Production Scheduling, Section 8.3: Master Production Scheduling in Different Environments, pp. 191-192
NEW QUESTION # 77
Which of the following statements is true about total productive maintenance (TPM)?
- A. It influences the product design process.
- B. It uses statistical tools.
- C. It minimizes unscheduled breakdowns.
- D. It is part of the business strategy.
Answer: C
Explanation:
Total productive maintenance (TPM) is a holistic approach to equipment maintenance that strives to achieve perfect production: no breakdowns, no small stops or slow running, no defects, and no accidents. TPM emphasizes proactive and preventative maintenance to maximize the operational efficiency of equipment. It blurs the distinction between the roles of production and maintenance by placing a strong emphasis on empowering operators to help maintain their equipment. The implementation of a TPM program creates a shared responsibility for equipment that encourages greater involvement by plant floor workers. In the right environment, this can be very effective in improving productivity and quality12. One of the eight pillars of TPM is planned maintenance, which aims to reduce the frequency of breakdowns and minimize the impact of failures on production. Planned maintenance involves scheduling maintenance activities based on the actual condition of the equipment, rather than on a fixed time interval. This reduces the risk of over-maintenance or under-maintenance, and optimizes the use of resources. Planned maintenance also involves improving the maintainability and reliability of the equipment, by identifying and eliminating the root causes of failures, and implementing design changes or modifications34. References: Total Productive Maintenance | Lean Production, Total productive maintenance - Wikipedia, Total Productive Maintenance (TPM): 8 Pillars, Benefits and ... - Appvizer
NEW QUESTION # 78
An advantage of applying ABC classification to a firm's replenishment items is that:
- A. it distinguishes independent demand from dependent demand.
- B. it allows the firm to utilize time-phased order point (TPOP).
- C. it allows planners to focus on critical products.
- D. it provides better order quantities than the economic order quantity (EOQ).
Answer: C
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 # 79
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