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NEW QUESTION # 78
Which of the following product design approaches are likely to reduce time to market for a global supply chain?
- A. Design for logistics
- B. Concurrent engineering
- C. Design for manufacture
- 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 # 79
Fishbone diagrams would help a service organization determine:
- A. differences in the performance of employees.
- B. the proper level of service for a customer segment.
- C. the source of a quality-of-service issue.
- D. the decomposition of customer return rates with seasonality.
Answer: C
Explanation:
Fishbone diagrams would help a service organization determine the source of a quality-of-service issue. A fishbone diagram, also known as a cause-and-effect diagram or an Ishikawa diagram, is a tool for identifying and analyzing the root causes of a problem or an effect. It uses a fish-shaped diagram to display the potential causes of a problem in different categories, such as people, processes, equipment, environment, etc. A fishbone diagram can help a service organization to determine the source of a quality-of-service issue by allowing the organization to brainstorm and organize the possible factors that may affect the quality of the service delivered to the customers, such as staff training, customer feedback, service standards, equipment maintenance, etc. A fishbone diagram can also help the organization to prioritize and test the most likely causes, and to develop and implement solutions to improve the quality of service12. References: 1 What is a Fishbone Diagram? Ishikawa Cause & Effect Diagram | ASQ 3 2 CPIM Exam References - Association for Supply Chain Management 1
NEW QUESTION # 80
Based on the above table, calculate the mean absolute deviation (MAD).
- A. 0
- B. 1
- C. 6.25
- D. 18.75
Answer: C
Explanation:
The mean absolute deviation (MAD) is a measure of variability that indicates the average distance between observations and their mean. MAD uses the original units of the data, which simplifies interpretation. Larger values signify that the data points spread out further from the average. Conversely, lower values correspond to data points bunching closer to it. The mean absolute deviation is also known as the mean deviation and average absolute deviation1.
The formula for the mean absolute deviation is the following:
MAD = (|X - X|) / N
Where:
*X = the value of a data point
*X = the mean of the data points
*|X - X| = the absolute deviation of a data point from the mean
*N = the number of data points
* = the summation symbol
Based on the table, we can calculate the MAD as follows:
*X = (80 + 50 + 50 + 75) / 4 = 63.75
*|X - X| = |80 - 63.75|, |50 - 63.75|, |50 - 63.75|, |75 - 63.75| = 16.25, 13.75, 13.75, 11.25
*MAD = (16.25 + 13.75 + 13.75 + 11.25) / 4 = 6.25
Therefore, the correct answer is B.
References := 1 CPIM Part 2 Exam Content Manual, Domain 3: Plan and Manage Demand, Task 3.1:
Develop, validate, and review demand plans, p. 23.
NEW QUESTION # 81
In preparing for a facility location decision, proximity to suppliers would be classified as which kind of criteria?
- A. Future flexibility factors
- B. Service level requirements
- C. Cost factors
- D. Access to transportation
Answer: C
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 # 82
Which of the following attributes describes a company with a global strategy?
- A. Itcustomizes the basic competitive style to fit markets but focuses efforts on building global brands.
- B. Ituses the same basic competitive style worldwide and focuses efforts on buildingglobal brands.
- C. Itoperates plants in many host countries and uses decentralized distribution.
- D. Itcoordinates major strategic decisions worldwide but gives country managers wide strategy-making latitude.
Answer: B
Explanation:
A company with a global strategy seeks to achieve a competitive advantage by standardizing its products, processes, and marketing across different countries. It leverages economies of scale and scope, as well as global brand recognition, to gain market share and profitability. It does not adapt to local preferences or conditions, but rather imposes a uniform approach to all markets. References: EXAM CONTENT MANUAL PREVIEW, page 6, section 1.1.2. Strategic Supply Chain Management: The Five Core Disciplines for Top Performance, Second Edition, page 19, section 1.2.
NEW QUESTION # 83
In choosing suppliers, a company wishes to maintain maximum leverage to reduce costs. Which of the following supply chain strategies would provide this opportunity?
- A. Multisourcing
- B. Long-term agreement
- C. Service-level agreement (SLA)
- D. Single sourcing
Answer: A
Explanation:
Multisourcing is a supply chain strategy that involves sourcing from multiple suppliers, rather than relying on a single supplier. Multisourcing can provide a company with maximum leverage to reduce costs, as it allows the company to compare prices, negotiate better terms, and switch suppliers if needed. Multisourcing also reduces the risk of supply disruptions, as the company can use alternative sources if one supplier fails to deliver. Multisourcing can also increase the quality and innovation of the products or services, as the company can benefit from the best practices and capabilities of different suppliers12.
The other options are not correct because:
*A. Single sourcing. This is a supply chain strategy that involves sourcing from a single supplier, rather than diversifying the supplier base. Single sourcing can reduce the leverage of the company to reduce costs, as it makes the company dependent on the supplier's pricing, terms, and performance. Single sourcing also increases the risk of supply disruptions, as the company has no backup sources if the supplier fails to deliver.
Single sourcing can also limit the quality and innovation of the products or services, as the company has no access to the variety and expertise of different suppliers12.
*C. Long-term agreement. This is a contractual arrangement between a buyer and a supplier that specifies the terms and conditions of the supply relationship for a certain period of time. Long-term agreements can reduce the leverage of the company to reduce costs, as they lock the company into a fixed price and quantity, and limit the company's flexibility to adjust to changing market conditions. Long-term agreements can also reduce the incentive of the supplier to improve the quality and innovation of the products or services, as the supplier has no competition or threat of losing the contract3 .
*D. Service-level agreement (SLA). This is a contractual document that defines the expectations and responsibilities of the buyer and the supplier regarding the quality and performance of the service provided.
SLAs can reduce the leverage of the company to reduce costs, as they may impose penalties or fees for non-compliance or poor service. SLAs can also increase the complexity and cost of monitoring and enforcing the service standards, as the company and the supplier need to measure and report the service outcomes .
References := 1 Single Sourcing vs. Multiple Sourcing: Which Is Better?1 2 Single Sourcing vs. Multiple Sourcing: What's the Difference?2 3 Long-Term Agreements: What Are They and Why Do They Matter?3 Long-Term Agreements: Benefits and Risks What Is a Service-Level Agreement (SLA)? Service-Level Agreement (SLA) - an overview | ScienceDirect Topics
NEW QUESTION # 84
Which of the following criteria is used to determine safety stock in a distribution center (DC)?
- A. Alpha factor level
- B. Economic order quantity(EOQ)
- C. Probability of stocking out
- D. Seasonal index value
Answer: C
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 # 85
Which of the following circumstances would cause a move from acceptance sampling to 100% inspection?
- A. History shows that the quality level has been stable from lot to lot.
- B. Downstream operators encounter recurring defects.
- C. The company uses one of its qualified suppliers.
- D. The percent of defects is expected to be greater than 5%.
Answer: B
Explanation:
Acceptance sampling is a statistical quality control technique that involves inspecting a sample of products or materials from a lot and deciding whether to accept or reject the lot based on the sample results1. Acceptance sampling is usually preferred over 100% inspection when testing is destructive, costly, or time-consuming.
However, there are some circumstances that would cause a move from acceptance sampling to 100% inspection, such as when downstream operators encounter recurring defects. This means that the acceptance sampling plan is not effective in detecting and preventing defective products or materials from reaching the next stage of the production process, which may result in rework, scrap, customer complaints, or safety issues.
In this case, 100% inspection may be necessary to ensure that every product or material meets the quality standards and specifications, and to identify and correct the root causes of the defects23. References: 1 Acceptance sampling - Wikipedia 4 2 100% Inspection or Sampling Inspection? Which is Best5 3 CPIM Exam References - Association for Supply Chain Management 1
NEW QUESTION # 86
Risk pooling would work best for items with:
- A. low demand uncertainty and short lead times.
- B. high demand uncertainty and long lead times.
- C. high demand uncertainty and short lead times.
- D. low demand uncertainty and long lead times.
Answer: B
Explanation:
Risk pooling is the concept of reducing the variability in demand for raw materials or finished goods by aggregating demand across multiple locations or products1. By doing so, the demand fluctuations are more likely to cancel out each other, resulting in a lower safety stock and inventory cost. Risk pooling works best for items with high demand uncertainty and long lead times, because these items have the highest risk of stockouts and the highest inventory holding cost. If the demand uncertainty is low, there is less need for risk pooling, as the demand can be easily forecasted and met. If the lead time is short, the replenishment orders can be placed more frequently and adjusted to the actual demand, reducing the need for safety stock and risk pooling2. References: 1 Inventory risk pooling definition - AccountingTools 3 2 Supply Chain Management:
Risk pooling - UNB 4
NEW QUESTION # 87
The primary benefit that results from the cross-training of employees is:
- A. effective problem-solving.
- B. improved capacity.
- C. shortened lead time.
- D. improved flexibility.
Answer: D
Explanation:
Cross-training employees is the process of training employees for skills and job roles they weren't initially hired for. This allows them to switch between different tasks and roles when needed, which increases the flexibility and adaptability of the workforce. Cross-training also enhances the problem-solving, communication, and collaboration skills of the employees, but the primary benefit is improved flexibility12 References: 1: 9 Major Benefits of Cross-Training Employees Effectively 2: Employee cross-training: 8 benefits you can't afford to miss
NEW QUESTION # 88
Which of the following methods places a replenishment order when the quantity on hand falls below a predetermined level?
- A. Fixed order quantity
- B. Min-max system
- C. Available-to-promlse (ATP)
- D. Periodic review
Answer: A
Explanation:
Fixed order quantity is a method that places a replenishment order when the quantity on hand falls below a predetermined level, called the reorder point. The reorder point is calculated based on the expected demand during the lead time and the safety stock. The order quantity is fixed and constant, and it is determined by the economic order quantity (EOQ)formula or other criteria. Fixed order quantity is also known as the order point/order quantity (OP/OQ) system or the continuous review system.
Option A is not correct, because min-max system is a method that places a replenishment order when the quantity on hand falls below a minimum level, called the order point. The order quantity is variable and depends on the difference between the maximum level and the current inventory level. Min-max system is also known as the two-bin system or the bin system.
Option C is not correct, because periodic review is a method that places a replenishment order at fixed intervals of time, regardless of the quantity on hand. The order quantity is variable and depends on the difference between the target inventory level and the current inventory level. Periodic review is also known as the fixed order interval (FOI) system or the periodic order quantity (POQ) system.
Option D is not correct, because available-to-promise (ATP) is not a method of inventory replenishment, but a calculation of the uncommitted portion of the current inventory and planned production. ATP is used to promise delivery dates to customers based on the availability of inventory and production capacity.
References:
Inventory Management and Control
Inventory Replenishment Methods
Inventory Replenishment Policies
NEW QUESTION # 89
If all other factors remain the same, when finished goods inventory investment is increased, service levels typically will:
- A. remain the same.
- B. increase in direct (linear) proportion.
- C. increase at a decreasing rate.
- D. increase at an increasing rate.
Answer: C
Explanation:
Increasing finished goods inventory investment will improve service levels by reducing the probability of stockouts. However, the relationship between inventory and service level is not linear, but rather asymptotic.
This means that as inventory increases, service level increases at a decreasing rate, approaching a maximum value. Therefore, option C is correct. Option A is incorrect because service level will not remain the same when inventory changes. Option B is incorrect because service level will not increase in direct proportion to inventory. Option D is incorrect because service level will not increase at an increasing rate as inventory increases. References: CPIM Part 2 Exam Content Manual, Version 8.0, Section A: Demand Management, Subsection A.3: Demand Management and Customer Service, p. 10.
NEW QUESTION # 90
In Company XYZ, transaction-costing capability has been Integrated into the shop floor reporting system. A batch of 20 units was started in production. At the fourth operation, 20 units are reported as complete. At the fifth operation, 25 units are reported as complete. When all operations are complete, 20 units are checked into the stockroom. If the error at the fifth operation is undetected, which of the following conditions will be true?
- A. Units in process will be understated.
- B. Stockroom inventory balance will be incorrect.
- C. Work-in-process (WIP) cost will be understated.
- D. Operator efficiency for the fifth operation will be overstated.
Answer: C
Explanation:
Work-in-process (WIP) cost is the total cost of the units that are partially completed in the production process.
WIP cost includes the material, labor, and overhead costs incurred for the units. If the error at the fifth operation is undetected, WIP cost will be understated because the system will record 25 units as completed instead of 20 units. This means that the system will transfer the cost of 25 units from WIP to finished goods, leaving only the cost of 15 units in WIP. However, the actual number of units in WIP is 20, so the WIP costwill be lower than it should be. The other conditions will not be true if the error is undetected. Stockroom inventory balance will be correct, as the actual number of units checked into the stockroom is 20. Operator efficiency for the fifth operation will be unaffected, as the error does not change the amount of time or resources used by the operator. Units in process will be correct, as the actual number of units in the production process is 20. References: Work in Process (WIP) | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 91
Given the information below, reducing which measure by 10% would contribute most to shortening the cash-to-cash cycle time?
- A. Accounts receivable
- B. Inventory value
- C. Cost of capital
- D. Accounts payable
Answer: B
Explanation:
Reducing the inventory value by 10% would contribute most to shortening the cash-to-cash cycle time. The cash-to-cash cycle time is calculated as the days of inventory outstanding plus days of sales outstanding minus days of payables outstanding. By reducing the inventory value, the company can decrease the days of inventory outstanding, leading to a shorter cash-to-cash cycle time. This aligns with CPIM's focus on efficient inventory management to optimize the supply chain. References: The concepts are covered in detail in Module
4: Inventory Management
NEW QUESTION # 92
A planner has chosen to increase the order point for a raw material. Which of the following costs is most likely to increase?
- A. Ordering
- B. Landed
- C. Product
- D. Carrying
Answer: D
Explanation:
The order point is the level of inventory that triggers a replenishment order. By increasing the order point, the planner is increasing the average inventory level, which in turn increases the carrying cost. Carrying cost is the cost of holding inventory, such as storage, insurance, obsolescence, and opportunity cost. Ordering cost, landed cost, and product cost are not directly affected by the order point12. References: What is Inventory Reorder Point in Inventory Management? - Deskera, Reorder Point Defined: Formula & How to Use | NetSuite
NEW QUESTION # 93
The primary consideration In maintenance, repair, and operating (MRO) supply systems typically is:
- A. stockout costs.
- B. carrying costs.
- C. shelf life.
- D. order quantity.
Answer: A
Explanation:
Maintenance, repair, and operating (MRO) supply systems are essential for ensuring the availability and reliability of equipment and infrastructure used in production processes. MRO supplies include items such as spare parts, tools, lubricants, cleaning materials, and safety equipment. The primary consideration in MRO supply systems typically is stockout costs, which are the costs incurred when an item is not available when needed. Stockouts can cause production delays, equipment breakdowns, customer dissatisfaction, and lost sales opportunities. Therefore, it is important to maintain adequate inventory levels of MRO supplies to avoid stockouts and ensure uninterrupted operations. Order quantity, carrying costs, and shelf life are also important factors in MRO supply systems, but they are not the primary consideration. Order quantity is the amount of MRO supplies ordered at a time, which affects the ordering costs and the inventory levels. Carrying costs are the costs of holding MRO supplies in inventory, which include storage, handling, insurance, and obsolescence costs. Shelf life is the period of time that MRO supplies can be stored before they expire or deteriorate, which affects the inventory turnover and the waste disposal costs. These factors need to be balanced with the stockout costs to optimize the MRO supply systems. References:
CPIM Part 2 Study Guide, Chapter 6: Inventory Management, Section 6.3: Inventory Management for Independent Demand Items What is maintenance, repair and operations | IBM, Section: Why should you care about MRO?
Maintenance, Repair, and Operations/Overhaul (MRO) - A Complete Guide, Section: Understanding MRO
NEW QUESTION # 94
Which of the following factors is used to determine safety stock?
- A. Time between customer orders
- B. Forecast error distribution
- C. Available capacity
- D. Number of customers
Answer: B
Explanation:
Safety stock is the extra inventory that a company keeps to prevent stockouts or shortages due to uncertainties in demand, supply, or lead time. Safety stock acts as a buffer to protect the company from losing sales or disrupting operations. One of the factors that is used to determine safety stock is the forecast error distribution, which is the measure of how much the actual demand deviates from the forecasted demand. Forecast error distribution can be calculated by using statistical methods, such as standard deviation or mean absolute deviation, to find the average and the variability of the forecast errors. The higher the forecast error distribution, the more safety stock is needed to cover the potential demand fluctuations. Forecast error distribution is one of the components of the safety stock formula, which is:
Safety stock = Z x LT x D
Where:
Z refers to the service level factor, which is the desired probability of not having a stockout.
LT refers to the standard deviation of lead time, which is the average variability of the time it takes to replenish inventory.
D is the average demand per unit of time.
References := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 24. CPIM Part 2 Learning System, Version 8.0, Module 2, Section C, Topic 3. How To Calculate Safety Stock (With Examples and FAQs). What is Safety Stock? (Definition, Formulas, Best Practices).
NEW QUESTION # 95
An effective approach to projecting requirements for materials with long lead times Includes which of the following options?
- A. Decrease the planning horizon.
- B. Use phantom bills of materials (BOMs).
- C. Initiate a multilevel master schedule.
- D. Increase the level of safety stock.
Answer: C
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 # 96
A company that uses concurrent engineering is likely to experience which of the following outcomes in the first period of a product's life cycle?
- A. An increase in obsolete inventory
- B. Conflicts between purchasing and engineering
- C. More accurate forecasting
- D. Fewer product design changes
Answer: D
Explanation:
Concurrent engineering is a method of designing and developing products in which the different stages run simultaneously, rather than consecutively. It decreases product development time and also the number of errors and rework. By involving all the relevant stakeholders, such as engineering, manufacturing, marketing, and purchasing, in the design process from the beginning, concurrent engineering reduces the need for product design changes later in the product life cycle. References:
*APICS CPIM Part 2 Exam Content Manual, p. 15
*[APICS CPIM Learning System Version 8.0], Module 2, Section B, p. 2-17
NEW QUESTION # 97
Information regarding a major new customer is received from sales. The company's most appropriate initial response would be to adjust the:
- A. sales and operations plan.
- B. forecast.
- C. production volume.
- D. master production schedule (MPS).
Answer: A
Explanation:
The sales and operations plan (S&OP) is the most appropriate level to adjust when a major new customer is received from sales. The S&OP is a cross-functional process that aligns the demand and supply plans with the business strategy and financial goals. It also provides the basis for the masterproduction schedule (MPS), which is a more detailed and disaggregated plan for specific products or families. Adjusting the production volume or the forecast would not be sufficient to account for the impact of the new customer on the overall business objectives and resources. References:
*APICS CPIM Part 2 Exam Content Manual, p. 11
*[APICS CPIM Learning System Version 8.0], Module 1, Section A, p. 1-15
NEW QUESTION # 98
Check sheets can be used to:
- A. provide a quick method to identify if possible defects exist.
- B. allow improvement teams to see if action items are being completed on time.
- C. determine the frequency of a defect and the time period between occurrences.
- D. provide an indication of correlation between defects.
Answer: C
Explanation:
Check sheets are simple tools that allow data to be collected and recorded in an organized manner. Check sheets can be used to determine the frequency of a defect and the timeperiod between occurrences by counting and categorizing the number of defects that occur over a specified time interval. Check sheets can also help to identify the causes and patterns of defects, and to monitor the effectiveness of improvement actions. The other statements are not true about check sheets. Check sheets do not provide a quick method to identify if possible defects exist, as they require data collection and analysis. Check sheets do not allow improvement teams to see if action items are being completed on time, as they are not designed to track the progress of tasks. Check sheets do not provide an indication of correlation between defects, as they do not measure the relationship between variables. References: Check Sheet | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 99
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