APICS APICS Certifications CPIM Questions & Answers

• Question 51:

  Up-to-date Information about production order status is required to do which of the followingtasks?

  A. Calculate current takt time.

  B. Determine planned orders.

  C. Replenish kanban quantities.

  D. Calculate the cost of work in process (WIP).

  Correct Answer: D

• Question 52:

  The primary purpose for engaging in cycle count activities is to:

  A. eliminate the need for a traditional physical inventory count.

  B. more frequently reconcile the actual on-hand and system on-hand for items.

  C. smooth out the tasks of counting inventory throughout the fiscal year.

  D. improve material handling processes and reduce or eliminate errors.

  Correct Answer: B

  regular basis, usually based on some sampling criteria. The primary purpose of cycle count is to more frequently reconcile the actual on-hand and system on-hand for items, which helps to ensure inventory accuracy, identify and correct errors, and avoid stockouts or overstocking. Cycle count does not eliminate the need for a traditional physical inventory count, but it can reduce its frequency and disruption. Cycle count also does not smooth out the tasks of counting inventory throughout the fiscal year, but rather distributes them according to a predetermined schedule. Cycle count may indirectly improve material handling processes and reduce or eliminate errors, but this is not its primary purpose. References: What is cycle count in inventory management? Inventory Cycle Counting 101: Best Practices and Benefits Understanding The Cycle Count In Inventory Management What is Inventory Cycle Counting?: A 2023 Guide Cycle Count: Everything A Warehouse Manager Should Know CPIM Part 2 ontent Manual, p. 40

• Question 53:

  A company can easily change Its workforce, but inventory carrying costs are high. Which of the following strategies would be most appropriate during times of highly fluctuating demand?

  A. Produceto backorders

  B. Produceat a constant level

  C. Produceto the sales forecast

  D. Produceto demand

  Correct Answer: D

  Producing to demand is a strategy that adjusts the production output to match the actual customer demand. This strategy is most appropriate during times of highly fluctuating demand, as it can reduce the inventory carrying costs and avoid overproduction or underproduction. Producing to demand can also improve customer satisfaction and responsiveness, as well as reduce waste and obsolescence. However, producing to demand requires a flexible and adaptable workforce that can easily change its capacity and skills to meet the changing demand patterns. The other options, producing to backorders, producing at a constant level, and producing to the sales forecast, are not as effective as producing to demand during times of highly fluctuating demand, as they can result in higher inventory costs, lower customer service, and lower profitability. References: Demand-Driven Manufacturing: What It Is and Why You Need It Demand-Driven Manufacturing: How to Optimize Your Production Process Demand-Driven Manufacturing: A Guide for Modern Manufacturers

• Question 54:

  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)

  Correct Answer: B

  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 55:

  One way to mitigate liability risk in the supply chain is to:

  A. negotiate lower component cost.

  B. require traceability for components.

  C. push inventory to supplier locations.

  D. use less-than-truckload (LTL) shipments more frequently.

  Correct Answer: B

  One way to mitigate liability risk in the supply chain is to require traceability for components. Liability risk is the risk that a party may be held responsible for certain types of losses caused by its actions or products to third parties. Traceability is the ability to track the origin, history, location, and movement of a product or a component through the supply chain. Requiring traceability for components can help to mitigate liability risk in the supply chain by enabling the identification and verification of the quality, safety, and compliance of the components, as well as the detection and prevention of counterfeit, defective, or hazardous components. Traceability can also facilitate the recall, repair, or replacement of faulty components, and the allocation of responsibility and accountability among the supply chain partners in case of a liability claim. References: What is a Liability Risk? - Definition from Insuranceopedia 5 2 Traceability - Wikipedia 6 3 Supply Chain Liability in the Corporate Sustainability Due Diligence ... 7 4 CPIM Exam References - Association for Supply Chain Management 8

• Question 56:

  Which of the following production activity control (PAC) techniques focuses on optimizing output?

  A. Gantt chart

  B. Priority sequencing rules

  C. Theory of constraints (TOC) scheduling

  D. Critical path management (CPM)

  Correct Answer: C

  Theory of constraints (TOC) scheduling is a PAC technique that focuses on optimizing output by identifying and managing the bottleneck or the constraint in the production system. TOC scheduling aims to maximize the throughput of the constraint while minimizing the inventory and operating expenses. Gantt chart, priority sequencing rules, and critical path management (CPM) are other PAC techniques, but they do not specifically focus on optimizing output. Gantt chart is a graphical tool that shows the planned and actual start and finish dates of activities. Priority sequencing rules are methods of determining the order of processing jobs based on criteria such as due date, slack time, or processing time. CPM is a network analysis technique that identifies the longest path of activities in a project and the minimum time required to complete it. References: APICS CPIM Part 2 ontent Manual, p. 29 [APICS CPIM Learning System Version 8.0], Module 4, Section C, p. 4-25

• Question 57:

  In Company XYZ, transaction-costing capability has been Integrated into the shop floor reporting system. A batch of 20 units was started in production. At the fourth operation, 20 units are reported as complete. At the fifth operation, 25 units are reported as complete. When all operations are complete, 20 units are checked into the stockroom. If the error at the fifth operation is undetected, which of the following conditions will be true?

  A. Stockroom inventory balance will be incorrect.

  B. Operator efficiency for the fifth operation will be overstated.

  C. Units in process will be understated.

  D. Work-in-process (WIP) cost will be understated.

  Correct Answer: D

  Work-in-process (WIP) cost is the total cost of the units that are partially completed in the production process. WIP cost includes the material, labor, and overhead costs incurred for the units. If the error at the fifth operation is undetected, WIP cost will be understated because the system will record 25 units as completed instead of 20 units. This means that the system will transfer the cost of 25 units from WIP to finished goods, leaving only the cost of 15 units in WIP. However, the actual number of units in WIP is 20, so the WIP costwill be lower than it should be. The other conditions will not be true if the error is undetected. Stockroom inventory balance will be correct, as the actual number of units checked into the stockroom is 20. Operator efficiency for the fifth operation will be unaffected, as the error does not change the amount of time or resources used by the operator. Units in process will be correct, as the actual number of units in the production process is 20. References: Work in Process (WIP) | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM

• Question 58:

  A reduction In purchased lot sizes will reduce which of the following items?

  A. Inventory levels

  B. Frequency of orders

  C. Reorder points (ROPs)

  D. Setuptimes

  Correct Answer: A

  A reduction in purchased lot sizes means ordering smaller quantities of materials more frequently. This reduces the average inventory level and the carrying cost of inventory. However, it also increases the frequency of orders and the

  ordering cost. The reorder point (ROP) is the level of inventory that triggers a new order, and it depends on the demand rate, the lead time, and the safety stock. The ROP is not affected by the lot size, unless the demand or the lead time

  changes. The setup time is the time required to prepare a machine or a process for production, and it is not related to the purchased lot size.

  References: EXAM CONTENT MANUAL PREVIEW, page 14, section 6.1.2. Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, page 433, section 12.4.

• Question 59:

  Which of the following statements best characterizes enterprise resources planning (ERP) systems?

  A. They track activity from customer order through payment.

  B. They are expensive but easy to implement.

  C. They provide real-time planning and scheduling, decision support, available-to-promise (ATP), and capable-to-promise (CTP) capabilities.

  D. They are used for strategic reporting requirements.

  Correct Answer: C

  Enterprise resource planning (ERP) systems are software platforms that help organizations manage and integrate the essential parts of their businesses, such as finance, supply chain, operations, human resources, and more. ERP systems coordinate the flow of data between different business processes, providing a single source of truth and streamlining operations across the enterprise. ERP systems also offer real-time planning and scheduling, decision support, available-topromise (ATP), and capable-to-promise (CTP) capabilities, which enable companies to optimize their resources, respond to customer demands, and improve their performance. This aligns with CPIM's focus on aligning the supply chain to support the business strategy and conducting sales and operations planning (SandOP) to support strategy. References: The concepts are covered indetail in Module 1: Business Planning and Strategy (1 and Module 2: Demand Management

  (2. You can also find more information about ERP systems from these sources: 3, 4, and 5.

• Question 60:

  Which of the following product design approaches are likely to reduce time to market for a global supply chain?

  A. Concurrent engineering

  B. Design for manufacture

  C. Design for logistics

  D. Quality function deployment (QFD)

  Correct Answer: A

  Concurrent engineering is a product design approach that involves the simultaneous and collaborative involvement of different functional areas, such as engineering, marketing, manufacturing, and suppliers, in the product development

  process. Concurrent engineering aims to reduce time to market, improve quality, lower costs, and enhance customer satisfaction by integrating and coordinating the inputs and feedback of all the stakeholders from the early stages of design.

  Concurrent engineering can also facilitate the standardization and modularization of product components, which can improve the flexibility and responsiveness of a global supply chain.

  References :

  Managing Supply Chain Operations, Chapter 3: Product Design and Development, Section 3.2:

  Concurrent Engineering

  CPIM ontent Manual, Module 1: Supply Chains and Strategy, Section 1.3: Product and Process Design, Subsection 1.3.1: Product and Process Design Concepts