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

Answer : C

The approved output of the distribution requirements planning (DRP) process is an input to the master production planning (MPS) process.The DRP process determines the quantity and timing of finished goods to be delivered to each distribution center or warehouse to meet customer demand1.The output of the DRP process is a distribution schedule that specifies the planned delivery dates and quantities of products2.The distribution schedule is then used as an input to the MPS process, which determines the quantity and timing of end items to be produced at each manufacturing facility3.The MPS process balances the demand from the distribution schedule with the available capacity and resources of the production system3.The output of the MPS process is a master production schedule that specifies the planned production dates and quantities of end items3.

Answer : B

Developing flexible operations is the best action that supports a company's strategic focus on delivery speed to improve competitive advantage.Flexible operations are the ability to adapt to changes in customer demand, product mix, quality standards, and delivery schedules1.Flexible operations can help a company achieve faster delivery speed by enabling it to respond quickly and efficiently to fluctuations in the market, reduce lead times, optimize resource utilization, and avoid bottlenecks2.Flexible operations can also help a company gain a competitive edge by offering a wider variety of products or services, different volumes or quantities, and varying delivery dates to meet customer needs and expectations3.

Some examples of flexible operations are:

Volume flexibility: the ability to produce different quantities or volumes of output3

Delivery flexibility: the ability to change the timings or modes of delivery3

Product flexibility: the ability to produce different types or variants of products or services4

Process flexibility: the ability to use different methods or technologies to perform a process4

Resource flexibility: the ability to use different inputs or resources for a process4

Some strategies for developing flexible operations are:

Using modular design: designing products or services that consist of interchangeable components or modules that can be easily assembled or disassembled5

Implementing automation: using machines or software to perform tasks that would otherwise require human labor6

Adopting lean principles: eliminating waste and non-value-added activities from processes, such as overproduction, inventory, defects, waiting, transportation, motion, and overprocessing7

Applying agile methods: using iterative and incremental approaches to deliver products or services that meet changing customer requirements and feedback

Cross-training workers: training workers to perform multiple tasks or roles within a process or organization

Answer : D

The inventory turns ratio is a financial metric that measures how efficiently a company manages its inventory. The inventory turns ratio is calculated by dividing the cost of goods sold (COGS) by the average inventory investment. The cost of goods sold is the direct cost of producing or purchasing the goods sold by the company. The average inventory investment is the average value of the inventory held by the company over a period of time. A higher inventory turns ratio indicates a higher inventory turnover and a lower inventory holding cost.

In this case, the company sold 8,400 units last year, and the unit cost is $207. Therefore, the cost of goods sold is:

COGS = Unit cost x Units sold = 207 x 8,400 = $1,738,800

The average inventory investment was $42,000. Therefore, the inventory turns ratio is:

Inventory turns ratio = COGS / Average inventory investment = 1,738,800 / 42,000 = 41.4

To express the inventory turns ratio as a whole number, we can round it to the nearest integer. Therefore, the inventory turns ratio is 5.

Answer : B

A 5S environment is a type of workplace organization method that uses a list of five Japanese words: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). The goal of 5S is to create a clean, uncluttered, safe, and well organized workplace that helps reduce waste and optimize productivity. A 5S environment should be maintained for the following reason:

To support standard work: Standard work is a set of documented procedures that define the best way to perform a task or process. Standard work helps to ensure quality, efficiency, safety, and consistency. A 5S environment supports standard work by providing a clear and visible layout of the work area, tools, materials, and instructions. A 5S environment also helps to maintain the condition and performance of the equipment and facilities. A 5S environment enables workers to follow standard work easily and effectively.

Answer : B

Mixed-model scheduling is a production technique that allows for the simultaneous production of different products or features on the same production line or system. Mixed-model scheduling can help reduce lead times, inventory levels, setup times, and material shortages by increasing the flexibility and responsiveness of the production process. One of the benefits of mixed-model scheduling is improved demand response, which means the ability to meet customer demand without delay or stockout. Improved demand response can enhance customer satisfaction and loyalty, as well as reduce the need for safety stock or buffer inventory. By using mixed-model scheduling, a company can produce products or features according to the actual or forecasted customer demand, rather than producing large batches of standardized products or features. This can help avoid overproduction or underproduction, which can result in excess inventory or lost sales. Mixed-model scheduling can also help adjust the production output quickly and easily when there are changes or fluctuations in demand, by using flexible automation, lean production techniques, or quick response methods.

The other options are not benefits of mixed-model scheduling. Increased inventory is not a benefit of mixed-model scheduling, but rather a drawback. Increased inventory can increase inventory costs, such as holding costs, transportation costs, or obsolescence costs. It can also reduce inventory visibility and control, as well as increase the risk of quality issues or spoilage. Mixed-model scheduling can help reduce inventory by producing products or features in small batches or single units that match customer demand. Fewer setups are not a benefit of mixed-model scheduling, but rather a requirement. Fewer setups mean less time and resources spent on changing or adjusting the production system to produce different products or features. Fewer setups can increase the efficiency and productivity of the production process, as well as reduce the setup costs and waste. Mixed-model scheduling requires fewer setups to enable the simultaneous production of different products or features on the same production line or system. Fewer material shortages are not a benefit of mixed-model scheduling, but rather an outcome. Fewer material shortages mean less disruption or delay in the production process due to the lack of materials or components needed for production. Fewer material shortages can improve the quality and reliability of the production process, as well as reduce the material costs and waste. Mixed-model scheduling can result in fewer material shortages by reducing the lead times and inventory levels of materials or components, as well as by improving the communication and coordination with suppliers.

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.

Answer : B

A company that has prioritized customers A, B, and C, filling orders in that sequence, will have an impact on the customer service levels for customers B and C. Customer service level is the percentage of orders that are fulfilled on time and in full. The higher the customer service level, the more satisfied the customer is with the company's performance. When a company prioritizes customers based on their importance, value, or profitability, it means that it allocates its resources and capacity to serve the most preferred customers first, and then the less preferred customers later. This can result in different customer service levels for different customer segments. In this case, customer A is the most preferred customer, followed by customer B and then customer C. Therefore, customer A will receive the highest customer service level, as the company will fill its orders first and ensure that they are delivered on time and in full. Customer B will receive the second highest customer service level, as the company will fill its orders after customer A's orders are fulfilled. Customer B may experience some delays or shortages if the company runs out of resources or capacity after serving customer A. Customer C will receive the lowest customer service level, as the company will fill its orders last, after customer A's and B's orders are completed. Customer C may face longer delays or higher shortages if the company has exhausted its resources or capacity after serving customer A and B. Therefore, the impact of prioritizing customers A, B, and C is that customer B has a higher service level than customer C.Reference:=How to Prioritize Customer Requests - Gladly,Support Ticket Prioritization - 6 Best Practices to follow, [Customer Service Level: Definition & Calculation]