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

Question #41

Which of the following factors is considered a carrying cost?

A . Setup
B . Transportation
C . Obsolescence
D . Scrap rate

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Question #42

Which of the following is an example of implosion in distribution requirements planning (DRP)?

A . Gathering information from several field locations and aggregating it at the manufacturing facility
B . Gathering information from the manufacturing facility and distributing it to the field locations
C . Redistributing inventory from several warehouses to one central warehouse N
D . Redistributing inventory from several field locations and centralizing it at the manufacturing facility

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Question #43

A technique to manage load variability would be to:

A . apply capacity planning using overall factors (CPOF) to identify priority items at the work center.
B . plan additional safety capacity as a part of total available capacity to meet unplanned demand.
C . design the shop floor with machines that sit idle until additional demand requires their use.
D . use capacity bills to provide a rough-cut method of planning total-time-per-unit value.

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Correct Answer: B
B

Explanation:

Load variability is the fluctuation in electricity demand over time. It is influenced by factors such as weather conditions, time of day, day of the week, and various external events. The higher the load variability, the more challenging it becomes to accurately predict demand and plan capacity1.

A technique to manage load variability would be to plan additional safety capacity as a part of total available capacity to meet unplanned demand. Safety capacity is the act of consistently planning your production below capacity. The reason for this is so the company can become more flexible and responsive to the changing needs of the customer2. For example, if your company was operating at full capacity and your best customer needed extra product, you would be unable to meet their request. By allowing for safety capacity, your company can become more flexible and more responsive.

The other options are not techniques to manage load variability, because they are either irrelevant or ineffective. Applying capacity planning using overall factors (CPOF) to identify priority items at the work center is a simple approach to capacity planning that applies historical ratios. These ratios are based on the master production schedule along with established production standards3. However, this method does not account for load variability or unexpected changes in demand or supply. Designing the shop floor with machines that sit idle until additional demand requires their use is a wasteful and costly way of managing load variability. It does not optimize the utilization of resources or minimize the inventory costs4. Using capacity bills to provide a rough-cut method of planning total-time-per-unit value is a procedure based on the manufacturing production schedule (MPS). It indicates the total standard time required to produce one end product in each work center required in its manufacture5. However, this method does not address the fluctuations in demand or supply that may occur due to load variability.

Question #44

A balanced scorecard is a performance measurement approach that involves:

A . balancing supply and demand.
B . assigning profit responsibility to key managers.
C . obtaining external industry performance measures against the company’s key performance indicators (KPIs).
D . linking financial and non-financial performance measures to organizational goals.

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Question #45

An analysis was done on a group of parts that showed a missed delivery resulting in lost sales on other product lines many times greater than the value of the initial lost sale. As a result, the company launched an initiative to increase the fill rate on these parts to 100%. Currently, they have raised the fill rate to 99%.

As they continue the initiative, what effects are most likely expected?

A . Operating costs and service level will both increase at the same rate.
B . Operating costs will increase slower than service level,
C . Operating costs will increase faster than service level.
D . Neither operating costs nor service level will increase.

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Correct Answer: C
C

Explanation:

Fill rate is the percentage of customer orders that are fulfilled without running out of inventory or placing backorders1. Fill rate is an important measure of customer service and inventory management efficiency. A high fill rate indicates that the company can meet customer demand in a timely and accurate manner, while a low fill rate suggests that the company is struggling to satisfy customer expectations.

Operating costs are the expenses associated with running a business, such as rent, utilities, wages, transportation, etc2. Operating costs are influenced by various factors, such as production volume, inventory level, technology, and quality. A high operating cost means that the company spends more money to produce and deliver its products or services, while a low operating cost means that the company spends less money to do so.

Service level is the measure of how well a company delivers its products or services to its customers, based on criteria such as availability, timeliness, quality, and satisfaction3. Service level is affected by various factors, such as demand variability, supply reliability, capacity utilization, and customer feedback. A high service level means that the company meets or exceeds customer expectations, while a low service level means that the company fails or falls short of customer expectations.

As the company continues its initiative to increase the fill rate on these parts to 100%, it is most likely that operating costs will increase faster than service level. This is because increasing the fill rate requires increasing the inventory level, which in turn increases the carrying costs, such as warehousing, insurance, taxes, and obsolescence4. Moreover, increasing the fill rate also requires reducing the variability and uncertainty in demand and supply, which may involve investing in more advanced technology, improving quality control, enhancing supplier relationships, or implementing demand management techniques5. These actions can also increase the operating costs of the company.

However, increasing the fill rate does not necessarily increase the service level at the same rate. This is because service level depends not only on fill rate, but also on other factors, such as delivery speed, order accuracy, product quality, and customer satisfaction6. Therefore, increasing the fill rate may not be enough to improve the service level significantly. In fact, there may be a point of diminishing returns, where increasing the fill rate beyond a certain level does not result in a proportional increase in service level. For example, increasing the fill rate from 95% to 99% may have a noticeable impact on service level, but increasing it from 99% to 100% may have a negligible impact on service level.

Question #46

In which of the following situations would the use of a failure mode effect analysis (FMEA) be most appropriate?

A . After a one-time quality incident investigation
B . During the define phase of a six-sigma project
C . During evaluation of a new market opportunity
D . Prior to a new product introduction (NPI)

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Question #47

Potential reasons to make instead of buy a product may include:

A . maintain core competencies, increase capital expense, and reduce cost.
B . less capital investment, large volume changes, and reduce cost.
C . maintain quality, reduce cost, and keep confidential processes within the firm.
D . eliminate risks associated with single sourcing, create intermittent flow, and reduce cost.

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Question #48

A focused differentiation strategy is best chosen with:

A . a broad cross-section of buyers and pursuit of a lower cost competitive advantage.
B . a narrow buyer segment and pursuit of a lower cost competitive advantage.
C . a broad cross-section of buyers and pursuit of a unique competitive advantage.
D . a narrow buyer segment and pursuit of a unique competitive advantage.

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Question #49

The major contribution of the production plan is to:

A . establish demand by end item.
B . provide authorization for the master schedule.
C . identify key resources to support the master schedule.
D . establish the weekly build schedule.

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Question #50

A process capability study would be necessary in a laboratory when:

A . A test results are consistently late.
B . frequent failures are occurring.
C . a new technician is hired.
D . hours of operation are to be extended.

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