Question 1

A distributor provides customer service by improving which of the following market driven factors?

Accepted Answer

A distributor improves availability by ensuring that the product is readily available to customers. They may keep a larger inventory or have efficient logistics to ensure timely delivery. While distributors can also play a role in quality control, design, and shelf life, customer service is most directly tied to availability.

Question 2

Which of the following statements about strategic planning is true?

Accepted Answer

Strategic planning refers to the process of developing a long-term strategy for an organization that integrates the plans of marketing, production, and other functional areas. It is focused on achieving the organization's goals and objectives, allocating resources effectively and efficiently, and gaining a competitive advantage. It is not primarily focused on the master production schedule or material requirements plan, nor is it solely focused on personnel development and acquisition of long-lead-time materials. Additionally, strategic planning is not a top-level planning activity that is isolated from other planning activities, but rather it should be integrated with other operational and tactical planning efforts. Therefore, only statement B is true as it highlights the role of strategic planning in integrating marketing and production plans.

Question 3

Which of the following capacity management techniques is used to support the production plan?

Accepted Answer

The answer of Which of the following capacity management techniques...

Question 4

Which of the following phrases best defines a production plan?

Accepted Answer

A production plan is a detailed plan that outlines the quantities of each product group that must be produced in each period, desired inventory levels, resources required in each period, and the availability of resources needed. It is a tactical plan that serves as a bridge between the strategic plan and the operational plan. Options A and D are related to specific aspects of production, while option B defines the firm's overall strategy.

Question 5

Which of the following situations requires the largest amount of safety stock based on demand variability and replenishment lead time?

Accepted Answer

The situation with high variability and a long replenishment lead time requires the largest amount of safety stock as there is a greater risk of stockouts due to both unpredictable fluctuations in demand and the longer time it takes to replenish inventory.

Question 6

Which of the following techniques is best for monitoring loads and capacities?

Accepted Answer

Input/output control is a technique used to monitor and manage the flow of work into and out of a production system, helping to balance loads and capacities effectively.

Question 7

A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225. Which of the following values reflects the mean absolute deviation for this data?

Accepted Answer

To find the mean absolute deviation (MAD), we first need to find the mean of the actual demand:

Mean = (195 + 210 + 205 + 190 + 220 + 225) / 6 = 207.5

Next, we need to find the absolute deviation for each month:

| 195 - 207.5 | = 12.5
| 210 - 207.5 | = 2.5
| 205 - 207.5 | = 2.5
| 190 - 207.5 | = 17.5
| 220 - 207.5 | = 12.5
| 225 - 207.5 | = 17.5

Now we find the average of these absolute deviations by summing them up and dividing by 6:

MAD = (12.5 + 2.5 + 2.5 + 17.5 + 12.5 + 17.5) / 6 = 12.5

Therefore, the mean absolute deviation is 12.5, which corresponds to choice (B).

Question 8

In Quality Function Deployment, "competitive evaluation" refers to:

Accepted Answer

Competitive evaluation in Quality Function Deployment involves comparing the perceived quality of the company's product with those of its competitors. This helps to identify areas where the company can improve and gain a competitive edge. The other options (analyzing current financial health, considering global market potential, and ranking industry rivals' position) are not specifically related to competitive evaluation in QFD.

Question 9

An extreme change in demand in the supply position upstream generated by a small change in demand downstream in the supply chain is called the:

Accepted Answer

The bullwhip effect refers to the phenomenon where a small change in demand downstream can cause a much larger change in demand upstream in the supply chain. This can result in inefficient production, excess inventory, and increased costs throughout the supply chain.

Question 10

The primary advantage of process flexibility is the:

Accepted Answer

Process flexibility allows for changes in volume or mix, which can help a company adapt to market changes and customer demands. This can ultimately lead to increased efficiency and profitability. Options A, C, and D are not necessarily advantages of process flexibility.

Question 11

Firm planned orders in a material requirements planning (MRP) system are used to:

Accepted Answer

Firm planned orders are used to protect against computer rescheduling by fixing the order quantity and timing, preventing automatic changes by the MRP system.

Question 12

A product has a forecast of 200 units a month. The actual demand for the past 6 months has been 195, 210, 205, 190, 220, and 225. Calculate the tracking signal for this product's forecast.

Accepted Answer

The tracking signal is calculated as the cumulative sum of forecast errors divided by the mean absolute deviation (MAD). The forecast errors are -5, 10, 5, -10, 20, 25, which sum to 45. The MAD is the average of the absolute errors: (5+10+5+10+20+25)/6 = 12.5. The tracking signal is 45/12.5 = 3.6, which rounds to 6.

Question 13

A manufacturer's market is highly dependent upon customers selecting standard options at the time of placing an order. Which of the following manufacturing strategies is best suited to compete in this market?

Accepted Answer

Assemble-to-order strategy is best suited for a manufacturer's market that is highly dependent upon customers selecting standard options at the time of placing an order. This strategy allows the manufacturer to assemble a finished product from a set of pre-defined modules or components based on the customer's specific order. This ensures that the manufacturer can offer a range of standard options to the customer while maintaining a limited inventory of components.

Question 14

Which of the following documents specifies how an item is to be manufactured?

Accepted Answer

The routing document specifies the step-by-step instructions for how an item is to be manufactured. The bill of labor lists the required labor hours for each step in the routing, the dispatch list specifies the quantity of each item to be produced and when, and the item master contains information about the item such as its description, materials, and revisions.

Question 15

Which of the following processes converts the master production schedule into resource requirements that are then compared to the available resources?

Accepted Answer

Rough-cut capacity planning is the process that converts the master production schedule into resource requirements and compares them to available resources to ensure feasibility.

Question 16

The portion of a firm's inventory and planned production that is not already committed is referred to as:

Accepted Answer

Available-to-promise (ATP) refers to the portion of a firm's inventory and planned production that is not already committed to customers. It is a key concept in sales and operations planning (S&OP) and helps companies ensure they do not overpromise delivery dates to customers. Choices A, B, and C do not accurately describe the concept of ATP.

Question 17

The question below is based on the following illustration of product parts:  Which of the following items are components?

Accepted Answer

The answer of The question below is based on the...

Question 18

What is the output of sales and operations planning?

Accepted Answer

Sales and operations planning (S&OP) results in a production plan that balances supply and demand, aligning production with sales forecasts and business goals.

Question 19

If the quantity ordered equals the quantity required in a time bucket, which of the following lot-sizing rules has been used?

Accepted Answer

Lot-for-lot lot-sizing rule is used when the quantity ordered equals the quantity required in a time bucket. This means that each order placed is exactly equal to the demand in a given time period.

Question 20

Material requirements planning requires which of the following files to plan requirements?

Accepted Answer

Material requirements planning requires a bill of materials file to plan requirements. A bill of materials is a detailed list of the raw materials, components, and subassemblies needed to create a finished product. Standard cost, routing, and work center files may be used in other parts of the manufacturing process, but they are not required for material requirements planning.

Exam 2: CPIM - Basics of Supply Chain Management