APICS CPIM-Part-2 Certified in Planning and Inventory Management(Part 2) Online Training

Question #31

External sustainability reporting and verification is an opportunity for a company to communicate its:

A . confidence.
B . profitability.
C . growth.
D . performance.

Question #32

An example of a cradle-to-cradle sustainability model would be:

A . a laundry service collects dirty baby clothes from families; cleans the clothes in large, efficient batches; and then sorts and delivers the clothes back to each family.
B . a coffee shop collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier.
C . a company uses wood that has been gathered from multiple sources to construct items, such as beds and toys for babies and young children.
D . a bank offers the lowest interest rates on loans to firms that are committed to using recycled materials and implementing zero-waste initiatives in their processes.

Correct Answer: B
B

Explanation:

A cradle-to-cradle sustainability model is a design approach that seeks to reuse all materials and components and eliminate waste. It is based on the concept of circular economy, which aims to keep materials in use for as long as possible and regenerate natural systems12. A cradle-to-cradle sustainability model follows the principle of a potentially infinite circular economy, where all products are designed to be either biodegradable or recyclable3.

An example of a cradle-to-cradle sustainability model would be a coffee shop that collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier. This example shows how the coffee shop closes the loop of the paper material cycle, by reusing the paper waste as an input for new paper products. This way, the coffee shop reduces its environmental impact, saves resources, and supports the circular economy.

The other options are not examples of a cradle-to-cradle sustainability model, because they do not reuse all materials and components and eliminate waste. A laundry service that collects dirty baby clothes from families, cleans them in large, efficient batches, and then sorts and delivers them back to each family is an example of a service-based business model, which reduces the need for owning products and extends their lifespan, but does not necessarily reuse or recycle the materials4. A company that uses wood that has been gathered from multiple sources to construct items, such as beds and toys for babies and young children is an example of a product-based business model, which may use renewable or recycled materials, but does not guarantee that the products are biodegradable or recyclable5. A bank that offers the lowest interest rates on loans to firms that are committed to using recycled materials and implementing zero-waste initiatives in their processes is an example of a financial incentive scheme, which encourages sustainable practices, but does not directly reuse or recycle materials6.

Question #33

Which of the following statements is true about the mean time between failures (MTBF) measure?

A . Itis used for non-repairable products.
B . An increase in MTBF is proportional to an increase in quality.
C . Itis a useful measure of reliability.
D . Itis the same as operating life or service life.

Reveal Solution Hide Solution

Question #34

A supplier making a part with a specified dimension of 50 mm + 0.3 mm changes the tolerance range to + 0.5 mm.

Which of the following pairs correctly identifies the changes to the percentage of defective parts and the process capability index?

A . The percentage of defective parts increases, and the process capability index increases.
B . The percentage of defective parts increases, and the process capability index decreases.
C . The percentage of defective parts decreases, and the process capability index increases.
D . The percentage of defective parts decreases, and the process capability index decreases.

Reveal Solution Hide Solution

Question #35

Work Center 1 has an available capacity of 1,200 hours per month.

Which of the following amounts represents the cumulative difference between the required capacity and the available capacity of Months 1 through 37

A . 50
B . 150
C . 1,250
D . 3,750

Reveal Solution Hide Solution

Question #36

A customer requests an order of 100 units in Period 1. The master schedule for the item indicates an available-to-promise (ATP) of 85 units for Period 1.

Which of the following approaches is the most appropriate course of action?

A . Increase the master production schedule (MPS) quantity in Period 1 by 15 units.
B . Promise the 100 units, and then check on component availability.
C . Promise the 85 units in Period 1 and the remaining 15 units in the next possible ATP period.
D . Promise the 100 units by removing 15 units from another customer’s order with a smaller revenue value.

Reveal Solution Hide Solution

Question #37

Which of the following factors typically would distort a sales forecast that is based solely on shipment history?

A . Material shortages
B . Labor rate changes
C . Currency exchange rates
D . Customer demands

Reveal Solution Hide Solution

Question #38

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 planners to focus on critical products.
C . it provides better order quantities than the economic order quantity (EOQ]).
D . it allows the firm to utilize time-phased order point (TPOP).

Reveal Solution Hide Solution

Correct Answer: B
B

Explanation:

ABC classification is an inventory categorization technique that divides items into three classes based on their usage value, which is the product of the number of units sold and the cost per unit. Class A items have the highest usage value and account for a large proportion of the total inventory value, but a small percentage of the number of items. Class B items have a moderate usage value and account for a moderate proportion of the total inventory value and the number of items. Class C items have the lowest usage value and account for a small proportion of the total inventory value, but a large percentage of the number of items1.

An advantage of applying ABC classification to a firm’s replenishment items is that it allows planners to focus on critical products. Replenishment items are items that are regularly ordered or produced to maintain a certain level of inventory. By using ABC classification, planners can prioritize the replenishment of class A items, which have the highest impact on the firm’s profitability and customer satisfaction. Planners can also apply different inventory management techniques and policies for each class of items, such as more frequent reviews, tighter controls, lower safety stocks, and higher service levels for class A items, and less frequent reviews, simpler controls, higher safety stocks, and lower service levels for class C items234. This way, ABC classification can help planners optimize the replenishment process and reduce costs, waste, and stockouts.

The other options are not advantages of applying ABC classification to a firm’s replenishment items, because they are either irrelevant or incorrect. ABC classification does not distinguish independent demand from dependent demand, which are two types of demand that depend on whether the item is sold to customers or used as a component in another item5. ABC classification does not provide better order quantities than the economic order quantity (EOQ), which is a formula that calculates the optimal order quantity that minimizes the total inventory costs6. ABC classification does not allow the firm to utilize time-phased order point (TPOP), which is a method that determines when to place an order based on the projected inventory position and the lead time7.

Question #39

Increased use of third-party logistics (3PL) services is likely to have which of the following effects on a firm’s balance sheet?

A . Decreased fixed assets
B . Decreased retained earnings
C . Increased accounts receivable
D . Increased intangible assets

Reveal Solution Hide Solution

Correct Answer: A
A

Explanation:

Third-party logistics (3PL) services are services that involve outsourcing some or all of the logistics functions of a firm, such as transportation, warehousing, distribution, or order fulfillment, to an external provider1. By using 3PL services, a firm can reduce its need to own and operate its own logistics assets, such as trucks, trailers, warehouses, or inventory management systems. These assets are classified as fixed assets on the balance sheet, because they are long-term and tangible assets that are used in the normal course of business2. Therefore, increased use of 3PL services is likely to have the effect of decreasing the fixed assets on a firm’s balance sheet.

The other options are not likely effects of increased use of 3PL services on a firm’s balance sheet. Retained earnings are the accumulated net income of a firm that is not distributed to shareholders as dividends3. Retained earnings are not directly affected by the use of 3PL services, unless the firm’s net income changes as a result of cost savings or revenue growth from outsourcing logistics functions. Accounts receivable are the amounts owed to a firm by its customers for goods or services delivered on credit4. Accounts receivable are not directly affected by the use of 3PL services, unless the firm’s sales volume or credit terms change as a result of improved customer service or delivery performance from outsourcing logistics functions. Intangible assets are non-physical assets that have value based on their intellectual or legal rights, such as patents, trademarks, goodwill, or brand names5. Intangible assets are not directly affected by the use of 3PL services, unless the firm’s reputation or market position changes as a result of enhanced quality or innovation from outsourcing logistics functions.

Reference: What Is Third Party Logistics (3PL) ? | Definition, Types, Benefits

Fixed Asset – Definition & Examples (Assets = Liabilities + Equity)

Retained Earnings – Definition & Formula

Accounts Receivable – Overview, Examples & Importance Intangible Asset – Definition & Examples

Question #40

Compared to traditional supplier relationships, a more strategic view of supplier relationships would require:

A . maintaining communication based on trust.
B . offering the supplier more business.
C . adopting electronic data interchange (EDI).
D . implementing concurrent engineering.

Reveal Solution Hide Solution