APICS APICS Certifications CPIM Questions & Answers

• Question 91:

  A manufacturer has a primary assembly line supported by output from several subassembly lines. Which of the following scenarios would be the best argument for a multilevel master scheduling process?

  A. Low variation in aggregate subassembly demand

  B. High variation in aggregate subassembly demand

  C. Low variation in subassembly demand mix

  D. High variation in subassembly demand mix

  Correct Answer: D

  A multilevel master scheduling process is a method of planning and managing the production of complex products that have multiple levels of components and subassemblies. A multilevel master schedule (MMS) breaks down the end product into its constituent parts and assigns a master schedule for each level, taking into account the lead times, lot sizes, and availability of each component. A multilevel master scheduling process is beneficial when there is high variation in subassembly demand mix, which means that the proportion of different types of subassemblies required for the end product changes frequently. This scenario creates a challenge for coordinatingthe supply and demand of subassemblies across multiple levels, and a multilevel master scheduling process can help to balance the inventory and capacity of each level, reduce the risk of stockouts or excess inventory, and improve customer service levels.

• Question 92:

  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

  Correct Answer: C

  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 93:

  How would a master production schedule (MPS) be used In an assemble-to-order (ATO) manufacturing environment?

  A. The MPS is used to plan subassemblies and components; end items are only scheduled when a customer order is received.

  B. Subassemblies are scheduled in the MPS when the customer order is received, and production can start.

  C. Typically, the MPS is not used in companies using an ATO manufacturing strategy.

  D. Often In an ATO environment, the MPS is created once a year and only revised if a product is discontinued.

  Correct Answer: A

  In an assemble-to-order (ATO) manufacturing environment, the MPS is used to plan subassemblies and components that have long lead times or high demand variability. These subassemblies and components are produced and stocked in anticipation of customer orders. The end items are only scheduled in the MPS when a customer order is received, and they are assembled from the available subassemblies and components. This reduces the lead time and inventory for the end items, while increasing the flexibility and responsiveness to customer needs. ATO is a hybrid strategy between make-to-stock (MTS) and make-to-order (MTO).

  References: CPIM ontent Manual, Module 4: Supply, Section 4.1: Master Production Schedule, p. 14 Manufacturing Planning and Control for Supply Chain Management, Chapter 8: Master Production Scheduling, Section 8.3: Master Production Scheduling in Different Environments, pp. 191-192

• Question 94:

  In a make-to-stock (MTS) environment, the master production schedule (MPS) Is usually a schedule of which of the following types of items?

  A. Phantom items

  B. Finished goods items

  C. Component/subassembly items

  D. Raw material items

  Correct Answer: B

  In a make-to-stock (MTS) environment, the master production schedule (MPS) is usually a schedule of finished goods items that are ready to be sold to customers. Phantom items, component/subassembly items, and raw material items are not typically scheduled in the MPS, but rather in the material requirements planning (MRP) system, which is driven by the MPS.

  References: CPIM 8.0 ontent Manual Preview, page 10, section 4.1.1 CPIM Part 1 Study Guide, page 66, section 4.1.1 CPIM Part 1 Learning System, Module 4, Lesson 1, Topic 1: Master Production Schedule

• Question 95:

  The cost accountant has discovered a consistent overage in actual run time for one operation. This information should be sent first to the:

  A. product manager to increase the selling price of the product.

  B. quality manager to add a new quality measurement to the operation.

  C. production supervisor to review and explain the overage.

  D. the engineering manager to evaluate the run time for the routing.

  Correct Answer: C

  The production supervisor is the most appropriate person to send the information about the overage in actual run time for one operation. The production supervisor is responsible for overseeing the execution of the production plan and ensuring that the operations are performed efficiently and effectively. The production supervisor can review the actual run time data and compare it with the planned run time, identify the possible causes of the overage, and take corrective actions if needed. The production supervisor can also explain the overage to the cost accountant and other stakeholders, such as the product manager, the quality manager, and the engineering manager, and provide feedback for improving the planning and routing of the operation.

  References: APICS CPIM Part 2 ontent Manual, p. 30 [APICS CPIM Learning System Version 8.0], Module 4, Section D, p. 4-35

• Question 96:

  Which of the following measurements indicates there may be bias In the forecast model?

  A. Mean absolute deviation (MAD)

  B. Standard deviation

  C. Tracking signal

  D. Variance

  Correct Answer: C

  The tracking signal is a measurement that indicates there may be bias in the forecast model. The tracking signal is the ratio of the cumulative forecast error to the mean absolute deviation (MAD). It measures how well the forecast is tracking

  the actual demand over time. A tracking signal of zero means that the forecast is perfectly accurate. A tracking signal within the range of -4 to +4 is considered acceptable. A tracking signal outside this range indicates that the forecast is

  consistently overestimating or underestimating the demand, which implies that there is bias in the forecast model. Bias is the tendency of a forecast to be consistently higher or lower than the actual demand. Bias can be caused by factors

  such as inaccurate data, inappropriate forecasting methods, or changes in demand patterns.

  References :

  Managing Supply Chain Operations, Chapter 5: Demand Management and Forecasting, Section 5.2:

  Forecasting Methods, Subsection 5.2.3: Forecast Accuracy and Control

  CPIM ontent Manual, Module 3: Demand, Section 3.2: Forecasting, Subsection 3.2.2:

  Forecasting Methods, Subsubsection 3.2.2.3: Forecast Accuracy and Control

• Question 97:

  The question below is based on the following information:

  Beginning inventory = 43Week 1Week 2Week 3

  Forecast202020

  Customer orders221710

  Projected on-hand

  Master production schedule (MPS)80

  Available-to-promise (ATP)

  What is the largest customer order that could be accepted for delivery at the end of week 3 without making changes to the master production schedule (MPS)?

  A. 74

  B. 63

  C. 61

  D. 31

  Correct Answer: C

  Available-to-promise (ATP) is the uncommitted portion of a company's inventory and planned production maintained in the master schedule to support customer-order promising. ATP is calculated by subtracting the customer orders and forecast from the projected on-hand inventory. The projected on-hand inventory is calculated by adding the beginning inventory and the master production schedule (MPS) and subtracting the customer orders.The largest customer order that could be accepted for delivery at the end of week 3 without making changes to the MPS is the ATP at the end of week 3. To calculate the ATP, we need to fill in the projected on-hand inventory for each week using the given information:

  Table Week Forecast Customer Orders MPS Projected On-Hand Inventory ATP 43 + 0 - 22 = 21 21 - 20 = 1 21 + 0 - 17 = 4 4 - 20 = -16 4 + 80 - 10 = 74 74 - 20 = 54

  The ATP at the end of week 3 is 54, which means that the company can promise 54 units of inventory to customers without changing the MPS. However, the question asks for the largest customer order that could be accepted, which means that we need to consider the existing customer orders as well. The customer orders for week 3 are 10, which means that the company has already committed 10 units of inventory to customers. Therefore, the largest customer order that could be accepted for delivery at the end of week 3 is 54 + 10 = 64 units. However, this is not one of the options given in the question. The closest option that is less than or equal to 64 is 61, which is option C12

• Question 98:

  Which of the following actions will result In lower inventory levels?

  A. Level load the master production schedule (MPS).

  B. Reduce replenishment lead times.

  C. Increase customer service level.

  D. Decentralize inventory locations.

  Correct Answer: B

  Reducing replenishment lead times will result in lower inventory levels because it means that the time between placing an order and receiving the goods is shorter. This reduces the need to hold excess inventory to cover the uncertainty and variability of demand and supply. Reducing replenishment lead times can also improve customer service levels, as orders can be fulfilled faster and more reliably. Level loading the master production schedule (MPS), increasing customer service level, and decentralizing inventory locations are all actions that will increase inventory levels, as they require more inventory to buffer against fluctuations in demand and supply, and to ensure availability at multiple locations. References: Inventory Management: Lead Time Reduction, APICS CPIM 8 Planning and Inventory Management | ASCM

• Question 99:

  A part is sold as a service part, and It is also used as a component In another part. Which of the following statements about the planning for this part is true?

  A. Its low-level code is zero.

  B. The material requirements for the part will be understated.

  C. The service part demand can be included In the gross requirements.

  D. It shouldn't have any safety stock.

  Correct Answer: C

  The service part demand can be included in the gross requirements for the part. Gross requirements are the total demand for an item derived from all sources, such as customer orders, dependent demand, forecast, or safety stock. Service part demand is the demand for an item that is used to replace or repair a product after it has been sold to the customer. Service part demand is independent of the production of other items, and it can be forecasted based on historical data, warranty information, or customer contracts. Service part demand can be added to the gross requirements for the part, along with the dependent demand from the other part that uses it as a component.

  Option A is not correct, because the low-level code of the part is not zero. Low-level code is the lowest level in the bill of material (BOM) at which an item appears as a component. An item that is not a component of any other item has a low-level code of zero. An item that is a component of another item has a low-level code equal to one plus the low-level code of the parent item. In this case, the part is a component of another part, so its low-level code is at least one.

  Option B is not correct, because the material requirements for the part will not be understated. Material requirements are the net requirements for an item after deducting the available inventory and scheduled receipts from the gross requirements. If the service part demand is included in the gross requirements, the material requirements will reflect the true demand for the part. If the service part demand is not included, the material requirements will be understated, and the part may face stockouts or backorders.

  Option D is not correct, because the part should have some safety stock. Safety stock is the extra inventory held to protect against uncertainties in demand, supply, or lead time. Safety stock can help reduce the risk of stockouts, improve customer service, and buffer against variability. The part should have some safety stock to account for the fluctuations in the service part demand, which may depend on factors such as product failure rate, customer behavior, or environmental conditions.

• Question 100:

  Which of the following is the fundamental difference between finite loading and other capacity planning approaches?

  A. It is highly dependent on advanced computer software to function effectively.

  B. It is only managed by shop floor supervisors.

  C. It can use historical information to drive decision-making processes.

  D. It considers adjustments to plans based on planned capacity utilization.

  Correct Answer: D

  Finite loading is a capacity planning approach that takes into account the available capacity of the resources and does not allow overloading. It considers adjustments to plans based on planned capacity utilization, which means that it can change the start or end dates of the operations to avoid exceeding the capacity limits. This way, finite loading ensures that the production schedule is realistic and feasible. Other capacity planning approaches, such as infinite loading, do not consider adjustments to plans based on planned capacity utilization. Infinite loading ignores the capacity constraints and schedules the operations based on the due dates and the lead times, regardless of the resource availability. This may result in overloading the resources and causing delays or disruptions in the production process. Therefore, the fundamental difference between finite loading and other capacity planning approaches is that finite loading considers adjustments to plans based on planned capacity utilization, while other approaches do not.