APICS Certified in Planning and Inventory Management (Part 2) CPIM-Part-2 Exam Practice Test

Page: 1 / 14
Total 151 questions
Question 1

Which of the following conditions is required for an effective single-sourcing relationship?



Answer : C

An effective single-sourcing relationship requires that the organizations must be mutually dependent. This means that both the customer and the supplier rely on each other for their success and benefit from the partnership. Mutual dependence can foster trust, collaboration, communication, innovation, and problem-solving between the parties. It can also reduce the risks of supply disruptions, quality issues, price fluctuations, and contract breaches. Mutual dependence can be achieved by aligning the goals, values, and strategies of the organizations, as well as by sharing information, resources, and risks. Demand for the customer's products does not have to be stable for a single-sourcing relationship to work. In fact, single sourcing can help the customer cope with demand variability by ensuring a consistent supply of goods or services from the supplier. The supplier does not have to offer the lowest price per unit for a single-sourcing relationship to be effective. The customer may choose a single supplier based on other factors, such as quality, delivery, innovation, or reputation. The price per unit may not reflect the total cost of ownership, which includes other costs such as transportation, inventory, maintenance, and warranty. The organizations do not have to be located close to each other for a single-sourcing relationship to be successful. With advances in technology and logistics, distance is not a major barrier for communication and coordination between the customer and the supplier. Moreover, single sourcing can reduce the complexity of managing multiple suppliers across different locations.Reference:=What Is Single Sourcing? (Plus Benefits and 7 Examples),Single Sourcing Vs Sole Sourcing Sourcing | CIPS,What Is Single Sourcing In Procurement And Why Is It Important?


Question 2

Compared to traditional supplier relationships, a more strategic view of supplier relationships would require:



Answer : A

Compared to traditional supplier relationships, a more strategic view of supplier relationships would require maintaining communication based on trust.Trust is a key factor that enables effective collaboration, information sharing, problem solving, and innovation between supply chain partners12.Trust can also reduce transaction costs, conflicts, and opportunism, and increase commitment, loyalty, and performance34. Therefore, maintaining communication based on trust is essential for developing and sustaining strategic supplier relationships that can create value and competitive advantage for both parties.

The other options are not necessarily required for a more strategic view of supplier relationships, because they are either insufficient or irrelevant. Offering the supplier more business may increase the volume or frequency of transactions, but it does not guarantee a more strategic or long-term relationship. Adopting electronic data interchange (EDI) may improve the efficiency or accuracy of information exchange, but it does not ensure a more collaborative or innovative relationship. Implementing concurrent engineering may enhance the product design or development process, but it does not address the other aspects of a strategic relationship, such as quality, delivery, or risk management.


Question 3

The sales and operations planning (S&OP) process in an assemble-to-order (ATO) production environment focuses on control of:



Answer : C

The S&OP process in an ATO production environment focuses on control of key intermediate part inventory, which are the components or subassemblies that are produced in advance and assembled to order when the customer order is received. By controlling the key intermediate part inventory, the S&OP process can balance the demand and supply of the final products, while reducing the lead time and inventory costs. The key intermediate part inventory is also known as the decoupling point, where the production process switches from MTS to MTO mode. The S&OP process can determine the optimal level of key intermediate part inventory based on the forecast and backlog of customer orders, as well as the production capacity and costs.

The other options are less relevant for the S&OP process in an ATO production environment. End product backlog refers to the customer orders that have not been fulfilled yet. Finished goods inventory refers to the final products that are ready for sale. Raw material inventory refers to the basic materials that are used to produce the components or subassemblies. These types of inventory are more applicable for MTS or MTO production environments, where the production process is either entirely based on forecast or entirely based on sales order. In an ATO production environment, the S&OP process does not need to control these types of inventory, as they are either minimal or nonexistent.Reference: CPIM Part 2 Exam Content Manual, Domain 4: Plan and Manage Supply, Section B: Production Planning and Control, Subsection 1: Production Strategies and Techniques, Page 19;Demand management process in assemble to order (ATO) environment;Assemble-to-Order (ATO): Overview, Examples, Pros and Cons.


Question 4

Safety capacity in lean environments is:



Answer : B

Safety capacity in lean environments is where take time is greater than cycle time.Take time is the average time between the start of production of one unit and the start of production of the next unit1.Cycle time is the average time it takes to complete one unit of a product or service2.Safety capacity is the amount of capacity that is reserved to deal with unexpected events or fluctuations in demand or supply3.

In lean environments, the goal is to minimize waste and maximize value by producing only what the customer wants, when the customer wants it, and in the exact amount4. This means that the production system should be synchronized with the customer demand, and the take time should match the cycle time. However, in reality, there may be variations or uncertainties in the demand or supply, such as changes in customer preferences, seasonal patterns, quality issues, equipment breakdowns, or supplier delays.These variations or uncertainties can cause disruptions or imbalances in the production system, leading to stockouts, overproduction, waiting, defects, or rework5.

To cope with these variations or uncertainties, lean environments may use safety capacity as a buffer or contingency plan. Safety capacity is where take time is greater than cycle time, meaning that the production system has some extra capacity to produce more than what the customer currently demands.This extra capacity can be used to absorb the variations or uncertainties and maintain a smooth and stable production flow6. However, safety capacity should not be confused with excess capacity, which is where take time is much greater than cycle time, meaning that the production system has a lot of idle or underutilized resources.Excess capacity is a waste that should be eliminated or reduced in lean environments7.

Therefore, safety capacity in lean environments is where take time is greater than cycle time.


Question 5

A vendor-managed inventory (\VMI) program provides a benefit to the buying company in which of the following ways?



Answer : C


Question 6

Return on investment (ROI) is decreased by which of the following activities?



Answer : C

Return on investment (ROI) is a financial ratio that measures the profitability of an investment relative to its cost. ROI is calculated by dividing the net income (or profit) generated by the investment by the total cost of the investment. ROI is decreased by any activity that reduces the net income or increases the cost of the investment. Increasing cost of sales is an activity that decreases ROI because it reduces the net income generated by the sales revenue. Cost of sales (or cost of goods sold) is the direct cost of producing or purchasing the goods or services sold by an organization. Cost of sales includes materials, labor, and overhead costs. Increasing cost of sales means that the organization spends more money to produce or acquire the same amount of goods or services, which lowers its profit margin and ROI.


Question 7

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



Answer : D

Finite loading is a capacity planning approach that considers adjustments to plans based on planned capacity utilization. It does not allow overloading of resources and schedules operations only when there is enough capacity available. Finite loading creates a more realistic schedule for the production processes than other approaches, such as infinite loading, that ignore the capacity constraints and assume that the due dates of orders are absolute. Finite loading is not highly dependent on advanced computer software, although it can benefit from it. It is not only managed by shop floor supervisors, but also by planners and schedulers. It can use historical information, but it is not the only approach that can do so. Therefore, the fundamental difference between finite loading and other capacity planning approaches is that it considers adjustments to plans based on planned capacity utilization.Reference:= CPIM Part 2 Exam Content Manual, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section B: Schedule Production Activities, Subsection 1: Develop a detailed production schedule (p. 28)


Page:    1 / 14   
Total 151 questions