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Quiz Session - Attempts With Random Questions

APICS CPIM Exam Questions

Page 4 of 80

61.

Which of the following is the process of ensuring that critical resources are available to support the preliminary master production schedule?

  • Rough-cut capacity planning

  • Material requirements planning

  • Capacity requirements planning

  • Resource planning

Correct answer: Rough-cut capacity planning

Rough-Cut Capacity Planning (RCCP) is concerned with making sure that critical resources are available at the preliminary MPS stage before committing to the schedule. Critical resources include labor, long lead-time materials, and bottleneck operations.

Material requirements planning is concerned with making sure parts are not missing, while capacity requirements planning is concerned with meeting the capacity requirements. 

Resource planning is concerned with scheduling the necessary resources to meet production needs.

62.

Production activity control (PAC) serves as what type of structure?

  • Execution structure

  • Planning structure

  • Scheduling structure

  • Ordering structure

Correct answer: Execution structure

Production Activity Control (PAC) systems are execution structures and are responsible for executing both the material requirements plan and the master production schedule. PAC is responsible for releasing work orders for manufacturing, controlling work orders, and managing the day-to-day activity.

The material requirements plan is the planning structure. The master production schedule is the scheduling structure. The manufacturing planning and control is the ordering structure.

63.

Regarding lot size decision rules, which of the following BEST describes the fixed order quantity rule?

  • Order a set specific quantity each time

  • Order a fixed quantity for a given period of time

  • Order only the exact quantity needed

  • Order a forecasted quantity for a year’s time

Correct answer: Order a set specific quantity each time

The ASCM Supply Chain Dictionary defines fixed order quantity as "a lot-sizing technique in material requirements planning or inventory management that will always cause planned or actual orders to be generated for a predetermined fixed quantity, or multiples thereof, if net requirements for the period exceed the fixed order quantity." Hence, the fixed order quantity rule orders a set specific quantity each time.

The lot-for-lot rule orders only the exact quantity needed. The order in periods supply rule orders a fixed quantity for a given period of time. Ordering a forecasted quantity for a year’s time does not describe any of the lot-size decision rules.

64.

If the demand for a product is 200 units per week, the lead time for the product is 1 week, and the product’s safety stock is 50, what is the product’s order point?

  • 250

  • 300

  • 150

  • 400

Correct answer: 250

To find the order point for the product, you will use the following formula:

Order Point (OP) = Demand During the Lead Time (DDLT) + Safety Stock (SS)

OP = 200 x 1 + 50

OP = 200 + 50

OP = 250

65.

What is typically the largest part of distribution costs?

  • Transportation

  • Managing distribution inventory

  • Materials handling

  • Order administration

Correct answer: Transportation

Physical movement of goods around/through the network is typically the largest part of distribution costs, followed by the cost of managing distribution inventory. 

Materials handling and order administration are normally minor costs.

66.

Which of the following is a DISADVANTAGE of using a push system?

  • Higher (total) inventory carrying costs

  • Requires trained staff

  • Bullwhip effect

  • Inventory accuracy

Correct answer: Higher (total) inventory carrying costs

Disadvantages of using a push system include:

  • Higher (total) inventory carrying costs
  • Deficiencies in information flows

Requiring trained staff, bullwhip effect, and inventory accuracy are disadvantages of using a pull system.

67.

Using the following data and exponential smoothing, what is the new forecast?

Old forecast = 150 
Alpha = 0.30 
Demand = 195

  • 163.5

  • 183

  • 136.5

  • 103.5

Correct answer: 163.5

The new forecast can be determined by using the following formula:

New Forecast (NF) = alpha x actual demand + (1- alpha) x old forecast

NF = 0.30 x 195 + 0.7 x 150

NF = 58.50 + 105

NF = 163.50

68.

Determining when an order point has been reached can be done by using all EXCEPT which of the following systems?

  • Periodic review system

  • Two-bin system

  • Kanban system

  • Perpetual inventory record system

Correct answer: Periodic review system

The periodic review system is not a system used to determine when an order point has been reached. It is a system used to determine when orders should be placed.

The systems used to determine when an order point has been reached are the two-bin system, the Kanban system, and the perpetual inventory record system.

69.

A purchasing strategy for materials that have low supply risk and high profit impact (leverage items) would include which of the following?

  • Focus on cost reduction

  • Development of long-term supplier relationships

  • Development of long-term contracts to secure inventory

  • Automated purchasing activity

Correct answer: Focus on cost reduction

Components that have high profit impact and low supply risk are considered leverage items. The strategy would be to use the organization's influence to negotiate and focus on cost-reduction activities. A small savings on these types of items can have a significant impact on overall profitability.

Given the supply risk is low, developing long-term relationships and contracts to secure inventory is not necessary. Purchasing may be decentralized with minimal benefit from automated purchasing activities.

70.

Which selection is NOT one of the six main supply chain processes?

  • Plan return

  • Deliver

  • Make

  • Plan source

Correct answer: Plan return

The six main supply chain processes upon which to base an integrated supply chain blueprint are Source, Plan Source, Make, Plan Make, Deliver, and Plan Deliver. Plan return is a secondary consideration, although many companies have made it a competitive advantage.

71.

Which of the following is NOT included in green manufacturing?

  • Design for manufacture and assembly (DFMA)

  • Design for disassembly

  • Design for remanufacture

  • Design for reuse

Correct answer: Design for manufacture and assembly (DFMA)

Design For Manufacture and Assembly (DFMA) is a product design concept that attempts to involve the manufacturing function early on to ensure ease of manufacturing and assembly.

Green manufacturing includes designing for reuse, disassembly, and remanufacturing. 

72.

In a brainstorming meeting, what is the BEST way a meeting facilitator can help ensure each meeting attendee has an opportunity to provide input rather than one or two dominant people?

  • Assign a gatekeeper to request input from all attendees

  • Ask a new employee attending the meeting to take notes

  • Ask the dominant attendees to leave the meeting

  • Ask the managers of the dominant personalities to reprimand them

Correct answer: Assign a gatekeeper to request input from all attendees

In a meeting, a gatekeeper will help with facilitation by observing communications and encouraging participation of all attendees.

Asking a new employee to take notes may help document what is said but will not impact overall participation. The other answers are less desirable options and probably too extreme.

73.

In most organizations, inventory is categorized according to the ABC classification method. What principle is used to categorize the stock units?

  • Pareto's law

  • Peter's principle

  • Principle of relativity

  • Principle of less action

Correct answer: Pareto's law

The ABC classification method is based on Pareto's law. According to the classification, Category A items comprise 20% SKU and contribute 80% of the money spent. B Category comprises 30% SKU for 15% spent, and C Category comprises 50% SKU for 5% spent. Selective inventory controls are done according to the categories where A will be subject to very tight control and accurate records, B items will be less tightly controlled and good records will be kept, and C items will be controlled with the simplest method possible with minimal records.

The other choices are incorrect because inventory that is categorized according to the ABC classification method is based on the Pareto law, not Peter's principle, the principle of relativity, or the principle of less action.

74.

Which of the following options BEST portrays the main concern of aggregate inventory management?

  • The cost and benefit of carrying different classes of inventory

  • When an order should be placed

  • The amount that should be ordered at one time

  • What inventory items are vital

Correct answer: The cost and benefit of carrying different classes of inventory

Aggregate inventory management is most concerned with the cost and benefit of carrying different classes of inventory: raw materials, WIP, and finished goods inventory. It is primarily centered around financials.

When an order should be placed, the amount that should be ordered at one time and what inventory items are vital are all focuses of item inventory management, not aggregate inventory management.

75.

In period eight, an order is required. The order has a manufacturing lead time of one period and a procurement lead time of three periods. Using this scenario, when should an order for purchased materials be placed?

  • Period four

  • Period one

  • Period two

  • Period three

Correct answer: Period four

Given no inventory is on hand, the components need to be purchased (three periods) prior to manufacture (one period). Cumulative lead time = 3 + 1 = 4.

Purchase order release with lead-time offset will be required date - cumulative lead time = 8 - 4 = 4.

76.

In distribution, which type of warehouse would a company use to increase flexibility and reduce capital investment requirements?

  • Public warehouse

  • Private warehouse

  • In-transit warehouse

  • Distribution center

Correct answer: Public warehouse

A public warehouse is rented or leased from a third party that provides a variety of logistics-related services. Given the financial arrangement, minimal capital investment is required to start the operations, and overall, the flexibility to expand or contract should be better than owning a private warehouse. However, over time, as volumes grow, owning and managing the private warehouse may be more cost-effective and result in more control over logistics.

In-transit warehouse (or storage) is a term used to indicate inventory is being stored in containers, rail-cars, or trucks for extended periods. 

Distribution center is a reference to the actual storage facility and processes. A distribution center can be either public or private.

77.

Move time is BEST described as which of the following?

  • Time spent to move a job from one operation to the next

  • Time spent to deliver the final product to the customer

  • Hardware wait time

  • Warehouse material handling time

Correct answer: Time spent to move a job from one operation to the next

The ASCM Supply Chain Dictionary defines move time as "the time that a job spends in transit from one operation to another in the plant." An example of move time is moving work in process around a manufacturing cell. 

The time spent to deliver the final product to the customer is shipping time. Hardware wait time might count as setup time. Warehouse material handling time is a form of move time but is not part of production, as in a job at a plant.

78.

One of the seven rights of customer service is the right time or on-time delivery. What does on-time delivery measure?

  • Production and distribution speed and dependability

  • Selection of the most cost-effective mode of transportation

  • Supplier performance

  • Forecast error

Correct answer: Production and distribution speed and dependability

For most companies, the measurement of on-time delivery is an evaluation of production and distribution speed and dependability. While the measure is not singular for manufacturing or distribution performance, it is significant in ensuring customer satisfaction.

Measurements of on-time delivery would not be used to determine forecast error or to select the most cost-effective mode of transportation. 

Evaluation of suppliers is also not immediately related to the measure; although, as a supplier metric, on-time delivery would be measured at some point.

79.

Which of the following BEST describes the purpose of a distribution warehouse?

  • To break down large lots into smaller lots for shipment

  • To store goods for long periods of time

  • To serve as regional storage

  • To exclusively house floor stock consumables

Correct answer: To break down large lots into smaller lots for shipment

The ASCM Supply Chain Dictionary defines a distribution warehouse as follows: "A facility where goods are received in large-volume uniform lots, stored briefly, and then broken down into smaller orders of different items required by the customer. Emphasis is on expeditious movement and handling." The value of Distribution Warehouses (DCs) is the focus on the cost-effective fulfillment of customer orders. By focusing inventory on one location, duplicative order fulfillment efforts are minimized and customer orders are fulfilled with higher accuracy and predictability. 

Storing inventory for a long time is not financially desirable. A DC may or may not serve as a regional center or be an exclusive center for house floor stock.

80.

A pharmacy uses a card that contains the medication’s order number, NDC number, and the quantity that must be maintained within the pharmacy to alert the inventory tech when the medication should be reordered. What type of order point system is the pharmacy using?

  • Kanban system

  • Perpetual inventory record system

  • Periodic review system

  • Two-bin system

Correct answer: Kanban system

The order point card system that the pharmacy is using is a variation of the Kanban system. A Kanban system is used to signal when there is a need for more product by using cards that have the item’s information and order points printed on it.

A perpetual inventory record system is an electronic record system that accounts for inventory transactions as they occur and automatically identifies when an order point has been reached. 

The periodic review system determines when orders should be placed, not when order points have been reached. 

The two-bin system is a simple order point system used to keep track of low-cost items by using bins or cards to signify when a manual order needs to be placed.

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