[Feb-2024] Check your preparation for APICS CPIM-Part-2 On-Demand Exam
Practice Exam CPIM-Part-2 Realistic Dumps Verified Questions
NEW QUESTION # 51
Product X sells for $20 each, and it has a variable cost of $5 per unit. The company sells 10,000 units per year and has afixed cost of $120,000. What is the break-even point in units for Product X?
- A. 10,000
- B. 6,000
- C. 24,000
- D. 8,000
Answer: D
Explanation:
Explanation
The break-even point is the level of sales or output where the total revenue equals the total cost, and the profit is zero. The break-even point can be calculated in units or in dollars. To calculate the break-even point in units, the following formula can be used:
Break-even point in units = Fixed cost / (Selling price per unit - Variable cost per unit) In this case, the fixed cost is $120,000, the selling price per unit is $20, and the variable cost per unit is $5.
Plugging these values into the formula, we get:
Break-even point in units = 120,000 / (20 - 5) = 120,000 / 15 = 8,000
Therefore, the break-even point in units for Product X is 8,000. This means that the company needs to sell
8,000 units of Product X to cover its fixed and variable costs and make no profit or loss.
References: CPIM Exam Content Manual Version 7.0, Domain 8: Manage Quality, Continuous Improvement, and Technology, Section 8.1: Develop Quality and Continuous Improvement Plans, Subsection 8.1.2: Describe how to develop a business case for quality and continuous improvement initiatives (page 74).
NEW QUESTION # 52
The cumulative available-to-promise (ATP) method is based on an assumption that available inventory in a period can becommitted to demand in that period and:
- A. any future period in the planning horizon.
- B. future periods beyond the DTF.
- C. any period before the demand time fence (DTF).
- D. future periods with a planned receipt.
Answer: A
Explanation:
Explanation
The cumulative available-to-promise (ATP) method is based on an assumption that available inventory in a period can be committed to demand in that period and any future period in the planning horizon. The planning horizon is the time span for which plans are made and executed1. The cumulative ATP is a running total of the ATP figure in the master schedule, which shows the planned production or purchase of a product over a series of time periods2. The cumulative ATP method allows the company to account for future shortages and build up inventory for large or seasonal orders3.
The other options are not correct. The demand time fence (DTF) is a point in the near future, usually equal to the cumulative lead time, beyond which changes to the master schedule are not allowed4. The cumulative ATP method does not depend on the DTF, as it considers all future periods in the planning horizon, regardless of whether they are inside or outside the DTF. Future periods with a planned receipt are periods where there is an expected supply of inventory from production or purchase orders2. The cumulative ATP method does not only commit inventory to these periods, but also to any other periods where there is demand.
References : Available-to-Promise (ATP) - Tutorial; Planning Horizon Definition; Demand Time Fence (DTF) Definition; Cumulative Available-to-Promise | Cargoz.
NEW QUESTION # 53
An organization has seen inventory increase every month for the past year and financial performance has net met expectations. Which of the following processes would mostappropriately address correctingthe problem?
- A. Detailed material planning
- B. Sales and operations planning (S&OP)
- C. Business planning
- D. Master scheduling
Answer: B
Explanation:
Explanation
Sales and operations planning (S&OP) is a process that aligns the sales plan, the production plan, the inventory plan, and the financial plan to achieve the business objectives. S&OP helps to balance supply and demand, optimize resources, reduce inventory costs, and improve customer service. S&OP is done on an aggregate or family level, and covers a sufficient span of time to make sure that the necessary resources will be available. S&OP also involves regular reviews and updates of the plans based on the changes in the market and the company's performance.
Business planning is a process that defines the long-term vision, mission, goals, and strategies of the organization. Business planning provides the direction and framework for the operational plans, but does not address the specific issues of inventory management and financial performance.
Detailed material planning is a process that determines the quantity and timing of material requirements for each item or component in the production plan. Detailed material planning is based on the master schedule, which is derived from the S&OP. Detailed material planning does not address the alignment of sales and operations at an aggregate level.
Master scheduling is a process that translates the S&OP into a detailed plan for each product or service in a specific time period. Master scheduling specifies the quantityand timing of finished goods to be produced or delivered to meet the demand. Master scheduling is dependent on the S&OP, and does not address the coordination of sales and operations at an aggregate level.
References:
APICS Exam Handbook, page 12
CPIM Part 1 Study Guide, page 19
CPIM Part 2 Study Guide, page 17
Sales and Operations Planning (S&OP) 101| Smartsheet
Sales, Inventory & Operations Planning - What It Is and How to Operate
NEW QUESTION # 54
Which of the following factors is considered a carrying cost?
- A. Transportation
- B. Setup
- C. Scrap rate
- D. Obsolescence
Answer: D
Explanation:
Explanation
Obsolescence is the loss of value or usefulness of an item due to changes in technology, fashion, customer preferences, or other factors. Obsolescence is considered a carrying cost, because it is an expense associated with holding inventory over a period of time1. Carrying costs are the various costs a business pays for holding inventory in stock, such as warehousing, insurance, taxes, depreciation, and opportunity costs2. Obsolescence can increase the carrying costs of inventory,because it can reduce the demand and sales potential of the item, and may require the item to be written off or sold at a lower price3.
The other options are not considered carrying costs, because they are not related to holding inventory in stock.
Setup is the cost of preparing a machine or a process for production. Transportation is the cost of moving goods from one place to another. Scrap rate is the percentage of defective or unusable units produced in a process. These costs are more related to production or distribution activities than inventory holding activities.
NEW QUESTION # 55
A supplier making a part with a specified dimension of 50 mm + 0.3 mm changes the tolerance range to + 0.5 mm. Which ofthe following pairs correctly identifies the changes to the percentage of defective parts and the process capability index?
- A. The percentage of defective parts decreases, and the process capability index decreases.
- B. The percentage of defective parts increases, and the process capability index increases.
- C. The percentage of defective parts increases, and the process capability index decreases.
- D. The percentage of defective parts decreases, and the process capability index increases.
Answer: A
Explanation:
Explanation
The percentage of defective parts is the proportion of units that do not meet the specification limits. The process capability index (Cpk) is a measure of how well the process can produce within the specification limits. Both the percentage of defective parts and the Cpk depend on the specification range and the process variation1.
If the supplier changes the tolerance range from + 0.3 mm to + 0.5 mm, the specification range becomes wider, which means that more units will fall within the specification limits and fewer units will be defective.
Therefore, the percentage of defective parts decreases.
However, if the process variation remains unchanged, the Cpk will decrease, because Cpk is inversely proportional to the specification range2. A wider specification range means a lower Cpk, which indicates a lower process capability. A lower Cpk also implies a higher percentage of defective parts in relation to the process variation3.
Therefore, the correct answer is D. The percentage of defective parts decreases, and the process capability index decreases.
References:
Understanding Process Capability Index (Cpk) [With Calculator]
[Process Capability Index - an overview | ScienceDirect Topics]
Converting A Capability Index to PPM Defective - Accendo Reliability
NEW QUESTION # 56
The benefits of standardized work include:
- A. more innovation.
- B. consistent cycle time.
- C. shorter takt time.
- D. less finished goods inventory.
Answer: B
Explanation:
Explanation
Standardized work is a method of organizing work processes to improve efficiency, quality, and safety1. One of the benefits of standardized work is consistent cycle time, which is the time it takes to complete a task or a process. By standardizing the work sequence, the takt time, and the standard inventory, standardized work reduces the variability and unpredictability of the work flow, and ensures that each task or process is performed in a consistent and optimal manner2. Consistent cycle time can lead to other benefits, such as improved customer satisfaction, reduced waste, increased productivity, and enhanced quality3. References:
Standardized Work: What Is It and Where Is It Used? - TWI Institute
What is Standard Work: Benefits & Applications | SafetyCulture
Standard Work: The Foundation for Kaizen - Lean Smarts
NEW QUESTION # 57
A statistical safety stock calculation would be appropriate for:
- A. components used in multiple end items.
- B. end items with stable demand.
- C. new products at time of introduction.
- D. supply-constrained raw materials.
Answer: B
Explanation:
Explanation
A statistical safety stock calculation is a method to determine the optimal amount of safety stock based on the demand variability, the lead time variability, and the desired service level. A statistical safety stock calculation would be appropriate for end items with stable demand, because these items have a predictable demand pattern and a low coefficient of variation. For items with unstable or unpredictable demand, such as components used in multiple end items, new products at time of introduction, or supply-constrained raw materials, a statistical safety stock calculation may not be accurate or reliable, and other methods such as judgmental or simulation-based approaches may be preferred. References: CPIM Part 2 Exam Content Manual, Domain 5:
Plan and Manage Inventory, Section 5.4: Inventory Management Techniques, p. 29.
NEW QUESTION # 58
Which of the following actions best supports a company's strategic focus on delivery speed to improve competitiveadvantage?
- A. Cross-training workers
- B. Maintaininghigh-capacityutilization
- C. Implementing rapid process improvements
- D. Developing flexible operations
Answer: D
Explanation:
Explanation
Developing flexible operations is the best action that supports a company's strategic focus on delivery speed to improve competitive advantage. Flexible operations are the ability to adapt to changes in customer demand, product mix, quality standards, and delivery schedules1. Flexible operations can help a company achieve faster delivery speed by enabling it to respond quickly and efficiently to fluctuations in the market, reduce lead times, optimize resource utilization, and avoid bottlenecks2. Flexible operations can also help a company gain a competitive edge by offering a wider variety of products or services, different volumes or quantities, and varying delivery dates to meet customer needs and expectations3.
Some examples of flexible operations are:
Volume flexibility: the ability to produce different quantities or volumes of output3 Delivery flexibility: the ability to change the timings or modes of delivery3 Product flexibility: the ability to produce different types or variants of products or services4 Process flexibility: the ability to use different methods or technologies to perform a process4 Resource flexibility: the ability to use different inputs or resources for a process4 Some strategies for developing flexible operations are:
Using modular design: designing products or services that consist of interchangeable components or modules that can be easily assembled or disassembled5 Implementing automation: using machines or software to perform tasks that would otherwise require human labor6 Adopting lean principles: eliminating waste and non-value-added activities from processes, such as overproduction, inventory, defects, waiting, transportation, motion, and overprocessing7 Applying agile methods: using iterative and incremental approaches to deliver products or services that meet changing customer requirements and feedback Cross-training workers: training workers to perform multiple tasks or roles within a process or organization References: 1: Operations Flexibility Definition 2 2: Why flexibility is critical when planning an operations - KPMG 4 3: Performance Objectives - What Are the 5 Business Objectives? - PeopleGoal 1 4: Competitive Priorities in Operations with Examples - StudiousGuy 5 5: Modular Design Definition 6: Automation Definition 7: Lean Principles Definition : Agile Methodology Definition : Cross-training Definition
NEW QUESTION # 59
Which of the following factors typically would distort a sales forecast that is based solely on shipment history?
- A. Material shortages
- B. Currency exchange rates
- C. Customer demands
- D. Labor rate changes
Answer: A
Explanation:
Explanation
A sales forecast that is based solely on shipment history is a method that uses past sales data to predict future sales. This method assumes that the sales pattern will remain consistent over time, and does not account for any changes or fluctuations in demand or supply1. Therefore, this method can be distorted by any factors that affect the availability or delivery of the products, such as material shortages.
Material shortages are situations where the supply of raw materials, components, or finished goods is insufficient to meet the demand. Material shortages can be caused by various reasons, such as natural disasters, supplier issues, transportation disruptions, quality problems, or demand spikes2. Material shortages can have a negative impact on the sales forecast that is based solely on shipment history, because they can reduce the amount of products that can be shipped to customers, and thus lower the sales revenue. Material shortages can also create a backlog of orders that cannot be fulfilled in time, and thus create a gap between the actual and forecasted sales3.
The other factors listed in the question typically would not distort a sales forecast that is based solely on shipment history, because they do not affect the shipment history directly. Labor rate changes are changes in the wages or salaries paid to workers. They may affect the production costs and profits, but not necessarily the sales volume or revenue4. Currency exchange rates are the rates at which one currency can be exchanged for another. They may affect the competitiveness and profitability of international sales, but not necessarily the sales volume or revenue5. Customer demands are the needs and preferences of customers for products or services. They may affect the sales potential and market share, but not necessarily the sales volume or revenue.
NEW QUESTION # 60
Which of the following is an example of implosion in distribution requirements planning (DRP)?
- A. Redistributing inventory from several field locations and centralizing it at the manufacturing facility
- B. Redistributing inventory from several warehouses to one central warehouse N
- C. Gathering information from the manufacturing facility and distributing it to the field locations
- D. Gathering information from several field locations and aggregating it at the manufacturing facility
Answer: D
Explanation:
Explanation
Implosion in distribution requirements planning (DRP) is the process of calculating the gross requirements for a supplying location based on the net requirements of its customers or demand sources1. Implosion is the opposite of explosion, which is the process of calculating the net requirements for a demand source based on the gross requirements of its customers or demand sources2. Implosion and explosion are used to synchronize the supply and demand across different levels of the distribution network3.
An example of implosion in DRP is gathering information from several field locations and aggregating it at the manufacturing facility. This example shows how the manufacturing facility, which is the supplying location, can determine its gross requirements by adding up the net requirements of its field locations, which are its customers or demand sources. This way, the manufacturing facility can plan its production and inventory levels to meet the demand from the field locations.
NEW QUESTION # 61
When forecasting the demand for a product, the highest percentage of error will occur at the:
- A. market segment.
- B. field warehouses.
- C. master schedule.
- D. central warehouse.
Answer: B
Explanation:
Explanation
The question is about forecasting the demand for a product, and the options are different levels of aggregation or disaggregation. The highest percentage of error will occur at the most disaggregated level, which is the field warehouses. The field warehouses are the locations where the finished products are stored and delivered to the customers. The demand at the field warehouses is affected by various factors, such as customer preferences, seasonality, promotions, and competition. The demand at the field warehouses is also more volatile and uncertain than the demand at the higher levels of aggregation, such as the market segment or the central warehouse. Therefore, forecasting the demand at the field warehouses will have the highest percentage of error, which means that the forecast will deviate more from the actual demand.
The other options are not the levels where the highest percentage of error will occur. The master schedule is not a level of aggregation or disaggregation, but a plan that specifies the quantity and timing of finished products to be produced in a given period. The master schedule is based on the forecasted demand, the customer orders, and the production capacity. The master schedule does not have a percentage of error, but it may have a variance or deviation from the actual production output. The market segment is a level of aggregation that groups the customers or products based on their common characteristics or needs. The market segment is a higher level than the field warehouses, and it has less variability and uncertainty in demand.
Therefore, forecasting the demand at the market segment will have a lower percentage of error than forecasting at the field warehouses. The central warehouse is a level of aggregation that consolidates the inventory from different sources and distributes it to different destinations. The central warehouse is a higher level than the field warehouses, and it has less variability and uncertainty in demand. Therefore, forecasting the demand at the central warehouse will have a lower percentage of error than forecasting at the field warehouses.
NEW QUESTION # 62
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. Promise the 100 units by removing 15 units from another customer's order with a smaller revenue value.
- 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. Increase the master production schedule (MPS) quantity in Period 1 by 15 units.
Answer: C
Explanation:
Explanation
Available-to-promise (ATP) is a business function that provides a response to customer order inquiries, based on resource availability1. It generates available quantities of the requested product, and delivery due dates. Therefore, ATP supports order promising and fulfillment, aiming to manage demand and match it to production plans1.
The most appropriate course of action when the customer requests an order of 100 units in Period 1, but the ATP is only 85 units, is to promise the 85 units in Period 1 and the remaining 15 units in the next possible ATP period. This way, the customer can receive a partial fulfillment of their order as soon as possible, and the rest of their order when more inventory becomes available. This approach also avoids overpromising or underdelivering, which can damage customer relationships and satisfaction.
The other options are not appropriate, because they either violate the master schedule, ignore the component availability, or disadvantage another customer. Increasing the MPS quantity in Period 1 by 15 units may not be feasible or desirable, because it may disrupt the production plan, increase costs, or create capacity issues.
Promising the 100 units, and then checking on component availability may result in a failure to deliver, if the components are not available or sufficient. Promising the 100 units by removing 15 units from another customer's order with a smaller revenue value may be unethical or unfair, and may also cause dissatisfaction or complaints from the other customer.
NEW QUESTION # 63
If all other factors remain the same, when finished goods inventory investment is increased, service levels typically will:
- A. increase at an increasing rate.
- B. increase at a decreasing rate.
- C. increase in direct (linear) proportion.
- D. remain the same.
Answer: B
Explanation:
Explanation
Finished goods inventory is a type of inventory that consists of the final products that are ready for sale to the customers. Finished goods inventory investment is the value of the finished goods inventory held by the company. Service level is a measure of customer satisfaction that indicates the percentage of customer orders that can be fulfilled from the available inventory. Service level typically will increase when finished goods inventory investment is increased, because more inventory means more ability to meet the customer demand.
However, the relationship between service level and finished goods inventory investment is not linear, but rather asymptotic. This means that service level will increase at a decreasing rate as finished goods inventory investment increases. In other words, the marginal benefit of increasing finished goods inventory investment will diminish as the service level approaches 100%. This is because there is a limit to how much inventory can improve the service level, and beyond a certain point, the additional inventory will not have a significant impact on customer satisfaction.
References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.1:
Develop Inventory Plans, Subsection 5.1.2: Describe how to develop an inventory policy (page 44).
NEW QUESTION # 64
The master production schedule (MPS) and final assembly schedule (FAS) are most closely linked in which production strategy?
- A. Engineer-to-order (ETO)
- B. Make-to-stock (MTS)
- C. Assemble-to-order (ATO)
- D. Make-to-order (MTQ)
Answer: C
Explanation:
Explanation
The master production schedule (MPS) and final assembly schedule (FAS) are most closely linked in the assemble-to-order (ATO) production strategy. ATO is a production strategy that producescustomized products or services by assembling standardized components or modules according to customer specifications. The MPS is a plan that specifies the quantity and timing of finished products to be produced in a given period. The FAS is a plan that specifies the quantity and timing of final assembly operations to be performed in a given period. In the ATO strategy, the MPS and FAS are closely linked because the MPS determines the demand for the finished products, and the FAS determines the demand for the components or modules. The MPS and FAS are synchronized to ensure that the components or modules are available when needed for the final assembly, and that the finished products are delivered on time to the customers.
The MPS and FAS are not closely linked in the other production strategies. Make-to-stock (MTS) is a production strategy that produces standardized products or services in advance of customer demand, and stores them in inventory until they are sold. The MPS is based on the forecasted demand, and the FAS is not relevant for this strategy, as there is no customization involved. Make-to-order (MTO) is a production strategy that produces customized products or services from raw materials or components after receiving customer orders.
The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no assembly involved. Engineer-to-order (ETO) is a production strategy that produces customized products or services that require engineering design or modification after receiving customer orders. The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no standardization involved. References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section
4.1: Supply Planning Concepts, p. 23; Master Production Schedule; Final Assembly Schedule; Assemble to order.
NEW QUESTION # 65
Which of the following techniques would be most appropriate to use to develop a forecast?
- A. Exponentialsmoothing
- B. Time series decomposition
- C. Moving average
- D. Delphi method
Answer: A
Explanation:
Explanation
Exponential smoothing is a forecasting technique that uses a weighted average of past and present data to predict future values. It is suitable for time series data that have a stable or slowly changing trend and no significant seasonal variations. Exponential smoothing assigns more weight to the most recent data, giving it a higher influence on the forecast. This makes it more responsive to changes in demand patterns than other techniques, such as moving average or time series decomposition, which use fixed weights or historical data.
The Delphi method is a qualitative technique that involves a panel of experts who provide their opinions and feedback on a topic through multiple rounds of surveys. It is not based on historical data or mathematical formulas, but rather on human judgment and consensus. Therefore, it is not appropriate for developing a forecast. References: CPIM Part 2 Exam Content Manual, Version 7.0, Domain 3: Plan and Manage Demand, Section A: Demand Management, Subsection 2: Forecasting Techniques and Methods, p. 14-15.
NEW QUESTION # 66
The most appropriate production output reporting method for repetitive manufacturing is:
- A. operation-by-operation.
- B. job tickets.
- C. count point.
- D. backflush.
Answer: D
Explanation:
Explanation
The most appropriate production output reporting method for repetitive manufacturing is backflush. Repetitive manufacturing is a production system where the same or similar products are produced in large quantities or in a continuous flow1. Backflush is a method of reporting output and consumption of materials at the end of the production process, rather than at each operation or stage2. Backflush can simplify and streamline the production output reporting process, as it eliminates the need for tracking and recording each individual transaction or movement of materials and components. Backflush can also reduce the paperwork, errors, and costs associated with production output reporting2.
The other options are not as appropriate as backflush for repetitive manufacturing. Operation-by-operation is a method of reporting output and consumption of materials at each operation or stage of the production process3. This method can provide more detailed and accurate information about the production performance and costs, but it can also be more complex and time-consuming, as itrequires tracking and recording each individual transaction or movement of materials and components. Count point is a method of reporting output and consumption of materials at selected points or milestones in the production process4. This method can provide a balance between detail and simplicity, but it can also introduce errors or discrepancies, as it requires estimating or extrapolating the output and consumption of materials between the count points. Job tickets are documents that record the time, materials, and costs associated with a specific job or order5. This method can provide more flexibility and customization, but it can also be more suitable for job shop or batch production systems, where different products are produced in small quantities or on demand.
References : Repetitive Manufacturing: Definition & Benefits; Backflush Costing: Definition & Example; Operation by Operation Reporting - ERP Software Blog; Count Point Reporting - ERP Software Blog; Job Ticket Definition.
NEW QUESTION # 67
A company has prioritized customers A, B, and C, filling orders in that sequence. What are the impacts to customer servicelevels for customers B and C?
- A. 100% service levels for B and C
- B. Customer B and C have same service level
- C. Customer C has higher service level
- D. Customer B has higher service level
Answer: D
Explanation:
Explanation
A company that has prioritized customers A, B, and C, filling orders in that sequence, will have an impact on the customer service levels for customers B and C. Customer service level is the percentage of orders that are fulfilled on time and in full. The higher the customer service level, the more satisfied the customer is with the company's performance. When a company prioritizes customers based on their importance, value, or profitability, it means that it allocates its resources and capacity to serve the most preferred customers first, and then the less preferred customers later. This can result in different customer service levels for different customer segments. In this case, customer A is the most preferred customer, followed by customer B and then customer C. Therefore, customer A will receive the highest customer service level, as the company will fill its orders first and ensure that they are delivered on time and in full. Customer B will receive the second highest customer service level, as the company will fill its orders after customer A's orders are fulfilled. Customer B may experience some delays or shortages if the company runs out of resources or capacity after serving customer A. Customer C will receive the lowest customer service level, as the company will fill its orders last, after customer A's and B's orders are completed. Customer C may face longer delays or higher shortages if the company has exhausted its resources or capacityafter serving customer A and B. Therefore, the impact of prioritizing customers A, B, and C is that customer B has a higher service level than customer C. References
:= How to Prioritize Customer Requests - Gladly, Support Ticket Prioritization - 6 Best Practices to follow,
[Customer Service Level: Definition & Calculation]
NEW QUESTION # 68
The production plan relates to a firm's financial planning because it is used to:
- A. calculate standard product costs.
- B. project payroll costs.
- C. determine variable costs.
- D. identify future cash needs.
Answer: D
Explanation:
Explanation
The production plan is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The production plan is the output of the supply planning step in the sales and operations planning (S&OP) process. The production plan relates to a firm's financial planning because it is used to identify future cash needs. Cash needs are the amount of money that a firm requires to operate and grow its business. Cash needs can be influenced by various factors, such as sales revenue, cost of goods sold, operating expenses, capital expenditures, inventory levels, accounts receivable, accounts payable, and taxes. The production plan can help to estimate the cash inflows and outflows associated with these factors, and to determine the optimal balance between them. The production plan can also help to identify the potential sources and uses of cash, such as borrowing, investing, or paying dividends. By identifying future cash needs, the production plan can help to improve the firm's liquidity, profitability, and solvency.
References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1:
Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).
NEW QUESTION # 69
Which of the following activities would be effective to mitigate the bullwhip effect?
- A. Reduce lead times.
- B. Increase inventory.
- C. Use a push system.
- D. Implement track and trace technology.
Answer: A
Explanation:
Explanation
The bullwhip effect is a supply chain phenomenon that causes fluctuations in demand to amplify as they move upstream, from the consumer to the retailer, to the distributor and then to the producer1. The bullwhip effect can result in inefficiencies and costs such as excess inventory, lost revenues, superfluous capacity and poor customer service1.
One of the activities that would be effective to mitigate the bullwhip effect is to reduce lead times, which are the time intervals between placing an order and receiving the goods2. Reducing lead times can help to reduce the uncertainty and variability in demand, as well as improve the responsiveness and flexibility of the supply chain2. By reducing lead times, the supply chain partners can order less frequently and in smaller quantities, while still meeting customer demand. This can reduce the need for safety stock, cycle stock and pipeline stock, and thus lower the inventory carrying costs and risks2.
The other options are not effective activities to mitigate the bullwhip effect. Implementing track and trace technology, which is a method for tracking the origin, history, location and status of a product or its parts throughout the supply chain3, may help to improve the visibility and transparency of the supply chain, but it may not reduce the demand fluctuations or inventory imbalances caused by the bullwhip effect. Using a push system, which is a production system where goods are produced based on forecasted demand rather than actual customer orders4, may increase the risk of overproduction or underproduction, as well as create more inventory and waste in the supply chain. Increasing inventory, which is the stock of goods or materials held by a company to meet customer demand5, may increase the inventory carrying costs and risks, as well as tie up cash flow and working capital.
References : Lead Time Reduction: Definition & Benefits; The bullwhip effect: causes, intensity, and mitigation - Academia.edu; What is Traceability in Supply Chain Management?; Push vs Pull System: What Is The Difference?; Inventory Definition.
NEW QUESTION # 70
Which of the following tools shows process changes and random variation over time?
- A. Control chart
- B. Histogram
- C. Check sheet
- D. Pareto analysis
Answer: A
Explanation:
Explanation
A control chart is a tool that shows process changes and random variation over time. A control chart is a graph that plots data points over time and shows the mean and the upper and lower control limits of the process. The mean is the average value of the data, and the control limits are the boundaries of the normal variation of the process. A control chart can help monitor the stability and performance of a process by detecting any unusual or non-random patterns in the data, such as trends, cycles, or shifts. A control chart can also help identify the sources of variation in the process, whether they are common causes (inherent to the process) or special causes (external factors). A control chart can be used for both variable data (measured on a continuous scale) and attribute data (counted or categorized).
A check sheet is a tool that collects and summarizes data in a structured way. A check sheet is a simple form that records the frequency or occurrence of specific events or problems during a process. A check sheet can help organize and analyze data by showing patterns, trends, or relationships among the data. A check sheet can also help identify potential causes of problems or areas for improvement.
A histogram is a tool that displays the distribution of data in a graphical way. A histogram is a type of bar chart that shows how many times each value or range of values occurs in a data set. A histogram can help describe and compare data by showing the shape, center, spread, and variation of the distribution. A histogram can also help identify outliers, gaps, or clusters in the data.
A Pareto analysis is a tool that prioritizes problems or causes based on their frequency or impact. A Pareto analysis is based on the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. A Pareto analysis uses a combination of a bar chart and a line graph to show the relative importance of different factors in a process. The bars represent the frequency ormagnitude of each factor, and the line represents the cumulative percentage of the total effect. A Pareto analysis can help focus on the most significant problems or causes and allocate resources accordingly.
References := Control Chart - Statistical Process Control Charts | ASQ, A Guide to Control Charts - iSixSigma, 2 Tools to Understand Variation in Your Improvement Journey, Understanding variation | Turas | Learn
NEW QUESTION # 71
......
Valid CPIM-Part-2 Dumps for Helping Passing APICS Exam: https://examcollection.guidetorrent.com/CPIM-Part-2-dumps-questions.html