Question 1

Which of the following plans generally includes an organization's explicit mission, goals, and objectives, along with the specific actions needed to achieve those goals and objectives?

Accepted Answer

Strategic plans typically include an organization's mission statement, as well as specific goals and objectives to help achieve that mission. The plan also includes details about the actions needed to reach those goals and objectives. Marketing plans primarily focus on the promotion and sale of products or services, while business plans usually outline the overall strategy for the organization. Financial plans may focus on budgeting, investing, and other financial management strategies, but do not typically include the detailed mission, goals, and objectives of the organization.

Question 2

Which of the following measures should a company focus on to reduce variation in the product?

Accepted Answer

The standard deviation measures the amount of variation or dispersion of a set of data values from the mean. Therefore, by focusing on reducing the standard deviation, a company can reduce the variation in the product.  The mode, mean, and median are measures of central tendency and do not directly address variation.

Question 3

Which of the following is an input to capacity requirements planning (CRP)?

Accepted Answer

Open shop orders are the inputs to capacity requirements planning (CRP) as they provide information about the demand for products in specific periods. Bills of material (BOM) and lot-sizing rules are inputs to material requirements planning (MRP), and standard cost is an input to cost accounting systems.

Question 4

At which of the following levels does sales and operations planning take place?

Accepted Answer

Sales and operations planning takes place at the product family level, where strategic decisions are made about production and sales in relation to demand forecasting, inventory management, and capacity planning. This level allows for a more comprehensive and coordinated approach to managing resources and meeting customer demand. The other options (component, finished goods, and market) are more focused on specific aspects of the supply chain and do not provide the full picture needed for effective sales and operations planning.

Question 5

Material requirements planning provides recommendations for which of the following processes?

Accepted Answer

Material requirements planning (MRP) provides recommendations for purchase orders and shop orders, as it calculates the required materials and quantities for production, and recommends when to order them to ensure they are available when needed for production. MRP does not typically provide recommendations for capacity or routing and lead times, as those are typically managed by separate systems or processes.

Question 6

Which of the following statements describes the difference between capacity requirements planning and material requirements planning?

Accepted Answer

Material requirements planning (MRP) focuses on ensuring that materials are available for production and does not consider capacity constraints, whereas capacity requirements planning (CRP) focuses on ensuring that the production capacity is sufficient to meet the production schedule.

Question 7

When determining a make or buy decision, reasons to buy out would include:

Accepted Answer

The answer of When determining a make or buy decision,...

Question 8

Which of the following circumstances will cause a decrease in a work center's utilization?

Accepted Answer

Lack of materials will cause a decrease in a work center's utilization because the work center will not be able to produce as many units as it could if it had the necessary materials.

Question 9

Backward scheduling begins with which of the following dates?

Accepted Answer

Backward scheduling starts with the order due date and works backwards to determine the necessary start date and intermediate processes to meet the deadline.

Question 10

Effective inventory management should lead to which of the following?

Accepted Answer

Effective inventory management should lead to higher inventory turns, which means a higher rate of sales relative to the amount of inventory held, leading to lower storage costs, reduced inventory obsolescence, and improved cash flow. Higher product quality and lower cost of capital are also important goals of inventory management, but they may not necessarily be achieved solely through inventory management. Elimination of inventory cycle counting is not necessarily a desirable goal, as cycle counting is a key tool for ensuring accuracy and visibility in inventory management.

Question 11

In which of the following environments is order-fill rate of primary importance to customer delivery expectations?

Accepted Answer

In a make-to-stock environment, the products are already produced and stocked in inventory, and therefore customers expect fast and reliable delivery. It is important to maintain a high order-fill rate to meet these expectations. Design-to-order, assemble-to-order, and make-to-order environments involve customization, and therefore delivery time may not be the primary concern.

Question 12

Which of the following plans is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance, and cash flow statement?

Accepted Answer

A business plan is a statement of long-range strategy and revenue, cost, and profit objectives usually accompanied by budgets, a projected balance, and cash flow statement. Strategic plans outline high-level goals and objectives, sales and operations plans outline production and capacity goals, and budgets are a detailed financial plan for a specific period of time.

Question 13

Which of the following terms refers to a sequence of end items to produce for specific customers' orders in a make-to-order or assemble-to-order environment?

Accepted Answer

Final assembly schedule refers to a sequence of end items to produce for specific customers' orders in a make-to-order or assemble-to-order environment. Master schedule is a broader schedule that includes all production activities, regardless of customer orders. Dispatch list and input/output control are related to the release and tracking of production orders and do not specifically refer to the sequence of end items for specific customer orders.

Question 14

Which of the following factors can negatively influence indirect costs such as production planning, purchasing, and inventory management?

Accepted Answer

The answer of Which of the following factors can negatively...

Question 15

Which of the following considerations should be included in product design?

Accepted Answer

The answer of Which of the following considerations should be...

Question 16

Which of the following variables best represents a strategic performance measure?

Accepted Answer

Revenue growth is a strategic performance measure as it directly impacts the overall success and sustainability of the organization. It reflects the ability of the company to increase sales, which is a key objective for any business. Machine utilization, work center capacity, and cycle time are operational performance measures that contribute to the overall efficiency of the organization, but they do not necessarily reflect the company's strategic goals.

Question 17

The primary purpose of sales and operations planning is to:

Accepted Answer

The primary purpose of sales and operations planning is to link strategic and tactical plans across the organization. This involves coordinating and aligning the sales and marketing plans with the production and inventory plans to ensure that resources and capacity are available to meet customer demand. It also involves balancing supply and demand to achieve organizational goals and objectives. By linking these plans, organizations can improve decision-making, increase collaboration, and ensure that everyone is working towards the same goals.

Question 18

The ratio of actual output to standard output is defined as:

Accepted Answer

The ratio of actual output to standard output is known as efficiency. Efficiency is a measure of how well resources are used to achieve output compared to a standard level of output.

Question 19

Which of the following plans is translated into synchronized functional plans through the sales and operations planning process?

Accepted Answer

The sales and operations planning process translates the business plan into synchronized functional plans, aligning various departments to ensure cohesive operations.

Question 20

Production activity control receives authorization to release work orders from:

Accepted Answer

The material requirements plan (MRP) provides the necessary information and authorization for production activity control to release work orders, as it details what materials are needed and when.

Exam 2: CPIM - Basics of Supply Chain Management