APICS CPIM Online Practice Questions and Exam Preparation

APICS CPIM Online Questions & Answers

• Question 131:

  Price negotiation is most appropriate when purchasing which of the following product categories?

  A. Commodities
  B. Standard products
  C. Items of small value
  D. Made-to-order (MTO) items
  A. Commodities

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  Explanation/Reference:

  Price negotiation is most appropriate when purchasing commodities. Commodities are products or materials that are standardized, widely available, and have low differentiation. Examples of commodities include metals, grains, oil, gas, etc. Price negotiation is a process of bargaining with the supplier to obtain the best possible price for the purchase. Price negotiation is suitable for commodities because they have high price volatility, meaning that their prices fluctuate frequently and unpredictably due to changes in supply and demand, market conditions, and other factors. Price negotiation can help the buyer to take advantage of the price fluctuations and secure a lower price or a better contract term with the supplier. Price negotiation can also help the buyer to reduce the total cost of ownership, which includes not only the purchase price but also the costs of transportation, storage, quality, and risk.

• Question 132:

  If the total part failure rate of a machine is 0.00055 failures per hour, what would be the mean time between failures (MTBF) in hours?

  A. 1,818.2
  B. 59.99945
  C. 1.98
  D. 0.99945
  A. 1,818.2

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  Explanation/Reference:

  The mean time between failures (MTBF) is the inverse of the failure rate. The failure rate is givenas 0.00055 failures per hour, so the MTBF is 1/0.00055 = 1,818.2 hours. This means that the average time the machine operates without failing is 1,818.2 hours.

• Question 133:

  Which of the following are the major objectives of Material Requirement Planning?

  A. Determine requirements and keep priorities current.
  B. Determine requirements and support production activities
  C. Control and monitoring material demands
  D. Control the performance of the order
  A. Determine requirements and keep priorities current.

• Question 134:

  The emphasis in just-in-time is on achieving the plan, no more, no less, this is called:

  A. modularity
  B. linearity
  C. consistency
  D. uniformity
  B. linearity

• Question 135:

  In the design and development of a manufacturing process, process engineers would most likely be responsible for decisions relating to:

  A. lead times.
  B. production capacity.
  C. product reliability.
  D. routing sequences.
  D. routing sequences.

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  Explanation/Reference:

  Process engineers are responsible for designing, implementing, controlling, and optimizing industrial processes, especially continuous ones such as the production of petrochemicals. One of the decisions that process engineers would most likely make is the routing sequence, which is the order of operations or activities that are performed on a product or material as it moves through the production process. The routing sequence affects the process performance, efficiency, quality, and cost, and it requires careful planning and analysis by the process engineers. Option A is not correct, because lead times are the time intervals between the initiation and completion of a process or a project. Lead times are influenced by many factors, such as demand, capacity, inventory, scheduling, and supply chain management, and they are not solely determined by the process engineers. Option B is not correct, because production capacity is the maximum amount of output that a process or a system can produce within a given period of time4. Production capacity depends on the availability and utilization of resources, such as materials, labor, equipment, and facilities, and it is not only decided by the process engineers. Option C is not correct, because product reliability is the probability that a product will perform its intended function without failure for a specified period of time under specified conditions5. Product reliability is affected by many aspects, such as product design, quality control, testing, maintenance, and customer feedback, and it is not the sole responsibility of the process engineers. References: Process engineering - Wikipedia 6 2 Routing (production) - Wikipedia 7 3 Lead Time: Definition, Formula, and Examples 8 4 Production Capacity: Definition, Calculation, and Examples 9 5 Product Reliability: Definition, Measurement, and Improvement

• Question 136:

  Which of the following methods places a replenishment order when the quantity on hand falls below a predetermined level?

  A. Min-max system
  B. Fixed order quantity
  C. Periodic review
  D. Available-to-promlse (ATP)
  B. Fixed order quantity

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  Explanation/Reference:

  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. 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

• Question 137:

  Which of the following are those of space and materials handling equipment?

  A. Capital costs
  B. Material costs
  C. Variance costs
  D. Equipment costs
  A. Capital costs

• Question 138:

  Check sheets can be used to:

  A. determine the frequency of a defect and the time period between occurrences.
  B. provide a quick method to identify if possible defects exist.
  C. allow improvement teams to see if action items are being completed on time.
  D. provide an indication of correlation between defects.
  A. determine the frequency of a defect and the time period between occurrences.

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  Explanation/Reference:

  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

• Question 139:

  A firm that currently produces all items to stock is implementing the concept of postponement in all new product designs. Which of the following outcomes is most likely to result?

  A. Product variety will decrease.
  B. Sales volume per product family will increase.
  C. Number of finished items stocked will decrease.
  D. Number of component items stocked will increase.
  C. Number of finished items stocked will decrease.

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  Explanation/Reference:

  Postponement is a strategy whereby the final configuration of a product is delayed as much as possible, usually until a customer order is received. Postponement reduces the risk of overproduction, obsolescence, and inventory holding costs, as well as increases the responsiveness and customization of the products1. A firm that currently produces all items to stock is implementing the concept of postponement in all new product designs. This means that the firm will produce generic or family products that can be differentiated into specific end-products later. This will result in a decrease in the number of finished items stocked, as the firm will only stock the generic or family products and not the final products. The firm will also be able to offer more product variety and flexibility to the customers, as it can customize the products according to the customer orders. Therefore, the most likely outcome of implementing postponement in all new product designs is a decrease in the number of finished items stocked.

• Question 140:

  Establish the acceptable limits and are usually expressed as the amount of allowable variation about the desired amount is called:

  A. Tolerances
  B. Acceptability
  C. Charity Act
  D. Minority
  A. Tolerances