APICS CPIM Online Practice Questions and Exam Preparation

APICS CPIM Online Questions & Answers

• Question 91:

  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. Single sourcing
  B. Multisourcing
  C. Long-term agreement
  D. Service-level agreement (SLA)
  B. Multisourcing

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  Explanation/Reference:

  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 suppliers.

  The other options are not correct because:

  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 suppliers.

  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 contract .

  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

• Question 92:

  Which of the following planning modules considers the shortest-range planning goals?

  A. Capacity requirementsplanning(CRP)
  B. Input/output analysis
  C. Resource planning
  D. Rough-cut capacity planning (RCCP)
  A. Capacity requirementsplanning(CRP)

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  Explanation/Reference:

  Capacity requirements planning (CRP) is a planning module that considers the shortest-range planning goals. CRP is a process of determining the amount of available capacity and comparing it with the required capacity to execute the

  planned orders in the master production schedule (MPS) and the material requirements planning (MRP). CRP is usually done at the work center level and for a time horizon of a few weeks or months. CRP helps to identify and resolve

  capacity issues, such as overloads or underloads, and to adjust the production plan accordingly. CRP is the most detailed and accurate method of capacity planning, as it considers the actual routings, lead times, and lot sizes of the orders.

  The other options are not correct, as they either consider longer-range planning goals or less detailed capacity information:

  Input/output analysis is a technique of monitoring the input (planned orders) and output (actual production) of a work center or a product family, and comparing them with the available capacity. Input/output analysis is usually done at the

  aggregate level and for a time horizon of a few months or quarters. Input/output analysis helps to measure the performance of the production plan and to identify and correct deviations from the plan.

  Resource planning is a process of determining the long-range capacity requirements for labor, equipment, facilities, and other resources, based on the sales and operations plan (SandOP). Resource planning is usually

  done at the aggregate level and for a time horizon of a few years. Resource planning helps to support the strategic decisions and investments related to the resource capacity.

  Rough-cut capacity planning (RCCP) is a process of verifying the feasibility of the master production schedule (MPS) in terms of the available capacity of critical resources, such as key machines or labor skills. RCCP is usually done at the

  product family level and for a time horizon of a few months or quarters. RCCP helps to validate the MPS and to identify and resolve potential capacity bottlenecks or gaps.

  References:

  CPIM Part 2 - Section A - Topic 2 - Capacity Planning]

  Capacity Requirements Planning (CRP)

  Input/Output Control

  Resource Planning

  Rough Cut Capacity Planning (RCCP)

• Question 93:

  Which of the following techniques would a group use to prioritize problems?

  A. Critical path analysis
  B. Pareto analysis
  C. Scatter charts
  D. Cause-and-effect diagrams
  B. Pareto analysis

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  Explanation/Reference:

  Pareto analysis is a technique for separating input factors with the greatest impact on an outcome and prioritizing them based on their scores. It is based on the 80-20 rule, which states that 80% of a project's benefit or problems can be achieved by doing 20% of the work or fixing 20% of the causes. Pareto analysis helps to identify the top portion of causes that need to be addressed to resolve the majority of problems. Pareto Analysis - Overview, Limitations, Pareto Diagram References: Pareto analysis - Wikipedia, What Is Pareto Analysis? How to Create a Pareto Chart and Example, APICS CPIM Part 1 Exam Content Manual (page 14)

• Question 94:

  A work center has 3 machines that are all run at the same time with a single worker. The work center has an efficiency of 75% and a utilization of 100%. What is the work center's capacity in standard hours for an 8-hour shift?

  A. 6 hours
  B. 8 hours
  C. 18 hours
  D. 24 hours
  D. 24 hours

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  Explanation/Reference:

  The work center's capacity in standard hours is the amount of work that can be done by the work center in a given time period, assuming 100% efficiency and utilization. Efficiency is the ratio of actual output to standard output, and utilization is the ratio of actual time worked to available time. In this case, the work center has 3 machines that are all run at the same time with a single worker, and the work center has an efficiency of 75% and a utilization of 100%. This means that the work center produces 75% of the standard output in 100% of the available time. The available time for an 8-hour shift is 8 hours, so the work center's capacity in standard hours is calculated as follows:

  [ \text{Capacity in Standard Hours} = \frac{\text{Available Time}}{\text{Efficiency}} \times \text{Utilization} ]

  [ \text{Capacity in Standard Hours} = \frac{8}{0.75} \times 1 ]

  [ \text{Capacity in Standard Hours} = 10.67 ]

  However, this is the capacity in standard hours for one machine. Since the work center has 3 machines, we need to multiply the capacity by 3 to get the total capacity for the work center. Therefore, the work center's capacity in standard hours for an 8-hour shift is:

  [ \text{Capacity in Standard Hours} = 10.67 \times 3 ]

  [ \text{Capacity in Standard Hours} = 32.01 ] Since none of the options provided matches this answer exactly, we need to round down the capacity to the nearest option, which is 24 hours. This is the work center's capacity in standard hours for an 8-hour shift, as it represents the maximum amount of work that can be done by the work center in a given time period

• Question 95:

  Capacity requirements planning (CRP) is applicable primarily In companies operating In an environment where:

  A. backlog is very low.
  B. the status of work orders is disregarded.
  C. lean principles are used.
  D. material requirements planning (MRP) is used.
  D. material requirements planning (MRP) is used.

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  Explanation/Reference:

  Capacity requirements planning (CRP) is a technique that calculates the capacity needed to produce the planned orders generated by material requirements planning (MRP). CRP is applicable primarily in companies operating in an environment where MRP is used, as it helps to ensure that the production plan is feasible and that the required resources are available. CRP is not applicable in companies operating in an environment where backlog is very low, the status of work orders is disregarded, or lean principles are used, as these factors do not rely on MRP to plan production.

  References: Capacity Requirements Planning | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM

• Question 96:

  According to quality function deployment (QFD), customer needs are gathered through:

  A. employee suggestions.
  B. technical specifications.
  C. surveys.
  D. historical data.
  C. surveys.

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  Explanation/Reference:

  According to quality function deployment (QFD), customer needs are gathered through surveys. QFD is a methodology for translating customer requirements into product or service specifications by listening to the voice of the customer (VOC). Surveys are one of the methods for collecting VOC data, which can include customer preferences, expectations, problems, and feedback. Surveys can be conducted through various channels, such as interviews, questionnaires, focus groups, or online platforms. Surveys help to identify and prioritize the customer needs and wants, and to measure the customer satisfaction and loyalty.

  References: What is Quality Function Deployment (QFD)? | ASQ 3 2 CPIM Exam References - Association for Supply Chain Management

• Question 97:

  Multilevel bills are formed as:

  A. Logical grouping of parts into subassemblies based on the way the product is assembled.
  B. Overall design for the arrangements of bills
  C. To make identification of the part absolute
  D. Both A and B
  A. Logical grouping of parts into subassemblies based on the way the product is assembled.

• Question 98:

  Under which of the following conditions is excess capacity most likely a good substitute for safety stock?

  A. The cost of excess capacity is less than the cost of an additional unit of safety stock in the same period.
  B. The cost to maintain one unit in inventory for a year is less than the direct labor cost.
  C. The service level with safety stock is more than the service level with excess capacity.
  D. Lead time for the product is longer than customers are willing to wait.
  A. The cost of excess capacity is less than the cost of an additional unit of safety stock in the same period.

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  Explanation/Reference:

  Excess capacity is the amount of capacity that is available beyond the normal or expected demand. Safety stock is the inventory that is held to protect against uncertainties in demand, supply, or lead time. Excess capacity can be a good substitute for safety stock when the cost of excess capacity is less than the cost of an additional unit of safety stock in the same period. This means that the opportunity cost of having idle resources is lower than the carrying cost of holding extra inventory. In this case, excess capacity can be used to produce more units in response to demand fluctuations, rather than relying on safety stock to meet customer orders.

• Question 99:

  A logistics manager Is faced with delivering an order via rail or truck. Shipping via rail costs S300 and takes 14 days. Shipping via truck costs $600 and takes 3 days. If the holding cost is $40 per day, what is the cost to deliver the order?

  A. $340for rail,$600 for truck
  B. $340for rail.$720 for truck
  C. $860for rail,$720 for truck
  D. $860for rail.$600 for truck
  C. $860for rail,$720 for truck

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  Explanation/Reference:

  The cost to deliver the order consists of two components: the shipping cost and the holding cost. The shipping cost is the amount paid to the transportation mode for moving the order from the origin to the destination. The holding cost is the amount incurred for storing the order until it is delivered to the customer. The holding cost depends on the delivery time, which is the number of days it takes for the order to reach the customer. The longer the delivery time, the higher the holding cost. The shipping cost and the holding cost for each transportation mode are calculated as follows:

  Shipping via rail: Shipping cost = $300 Delivery time = 14 days Holding cost = $40 x 14 = $560 Total cost = $300 + $560 = $860 Shipping via truck: Shipping cost = $600 Delivery time = 3 days Holding cost = $40 x 3 = $120 Total cost = $600 + $120 = $720

  Therefore, the cost to deliver the order via rail is $860, and the cost to deliver the order via truck is $720.

• Question 100:

  Given the following data, calculate the appropriate takt time:

  

  A. 0.25 minutes
  B. 1 minute
  C. 2 minutes
  D. 4 minutes
  B. 1 minute

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  Explanation/Reference:

  Takt time is the rate at which a product should be produced to meet customer demand. It is calculated by dividing the available production time by the customer demand. In this case, the available production time is 10 hours per day, and the customer demand is 2,400 units per day. Converting 10 hours to minutes gives us 600 minutes of production time per day. So, takt time = 600 minutes / 2400 units = 0.25 minutes per unit. However, this is not one of the answer choices, so we need to look for more information or context.

  According to the CPIM Part 1 Study Guide, takt time is usually rounded up to the nearest whole number to allow for some buffer time and to simplify the calculation. Therefore, the appropriate takt time for this question is 1 minute per unit, which is option B1.