Download CPIM Practice Exam with Solutions: Production and Inventory Management and more Exams Advanced Education in PDF only on Docsity!
CPIM Practice Exam with Complete
Solutions
A work center is receiving enough work, but it is not performing to plan. To detect problems in this work center, the planner should compare: - ANSWER-actual output to planned output. A company is experiencing a change in demand from steady to sporadic. It currently uses economic order quantity (EOQ) to determine purchase quantities for a key component. Which of the following models should it use in the future? - ANSWER- Period order quantity Which of the following roles of a finished goods warehouse deals with the grouping of different items into an order? - ANSWER-Product mixing Which of the following definitions best describes capacity planning? - ANSWER- Process of determining the amount of capacity required for production in the future The term genchi genbutsu is synonymous with: - ANSWER-management by walking around. The term "demand management" is defined as: - ANSWER-the function of recognizing all demands for goods and services to support the marketplace. What is the term for a continual process of reviewing the strategic business plan and revising and coordinating the plans of various departments? - ANSWER-Sales and operations planning What is replenishment lead time? - ANSWER-Total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use What is earliest job due date an example of? - ANSWER-dispatching Which of the following manufacturing processes would most likely be characterized by a narrow range of standard products, low direct labor costs, and a high level of technical support for manufacturing? - ANSWER-Line With a holiday season fast approaching, a factory's capacity is deemed insufficient to meet the orders placed by a highly valued customer. The orders cannot be changed,
nor can the load be rebalanced. What step(s) can the company take in the current time frame that would allow them to meet the customer demand as requested? - ANSWER- Scheduling more overtime A firm offers products configured from a large number of stocked options and subassemblies. Which of the following production environments is the firm most likely to use? - ANSWER-ATO Which of the following time periods will result in a smoother forecast that is less swayed by random variability when using the moving average forecast technique? - ANSWER- 12 months In a planning bill for an updated configuration of a cellphone, the total percentages for the amounts required for the three possible memory chips used equal 115. What does this indicate? - ANSWER-The manufacturer is making a hedge against higher demand. Based on the information below, in what week would a planned order release be generated to satisfy the net requirement? Lead time: 3 weeks Order quantity: 100 Net requirement exists in: week 6 Net requirement quantity: 150 - ANSWER-Week 3 EXPLANATION: Because the net requirement exists in week 6, the planned order release is offset by the lead time of three weeks. Thus, the planned order release will be generated in week 6 - 3 weeks = week 3. What is a benefits of setup reduction is most immediate? - ANSWER-Reduced product cost In production and inventory control, it is important to know whether demand is independent or dependent because the distinction: - ANSWER-determines the selection of appropriate replenishment methods. What is the term for an array of inventory broken out into different categories based on Pareto's law? - ANSWER-ABC Classification Which managed inventory strategy would best suit a lean manufacturer that is unable to provide consistent order sizes due to fluctuations in demand for the various products it produces? - ANSWER-Continuous replenishment Which technology can assist a company in detecting and identifying potential fraud across the supply chain? - ANSWER-Artificial intelligence and machine learning
Which of the following statements best describes flow manufacturing? - ANSWER- Production is performed on a small range of products using the same sequence of operations. A production process is an I-type process from a VATI analysis where operations 1, 2, 3, and 4 operate sequentially and operations 1 through 3 require one unit as input for each one unit of output, but operation 4 requires two units as input to produce one unit of output. Unit processing times are 200 per hour for operation 1, 220 per hour for operation 2, 180 per hour for operation 3, and 100 per hour for operation 4. If demand is 110 per hour, which is true? - ANSWER-Operation 3 is the constraint. EXPLANATION: Operation 3 is the constraint because operation 4 requires two units from it to make one unit of output. Therefore, operations 1 through 3 need to operate at twice the rate of operation 4 to match its production, but it operates at only 1.8 times the rate of operation 4. The market is also not the constraint because demand is higher than the output of operation 4. Which of the following definitions best describes capacity planning? - ANSWER- Process of determining the amount of capacity required for production in the future The term genchi genbutsu is synonymous with: - ANSWER-management by walking around. The term "demand management" is defined as: - ANSWER-the function of recognizing all demands for goods and services to support the marketplace. What is the term for a continual process of reviewing the strategic business plan and revising and coordinating the plans of various departments? - ANSWER-Sales and operations planning What is replenishment lead time? - ANSWER-Total period of time that elapses from the moment it is determined that a product should be reordered until the product is back on the shelf available for use What is earliest job due date an example of? - ANSWER-dispatching Which of the following manufacturing processes would most likely be characterized by a narrow range of standard products, low direct labor costs, and a high level of technical support for manufacturing? - ANSWER-Line With a holiday season fast approaching, a factory's capacity is deemed insufficient to meet the orders placed by a highly valued customer. The orders cannot be changed, nor can the load be rebalanced. What step(s) can the company take in the current time
frame that would allow them to meet the customer demand as requested? - ANSWER- Scheduling more overtime A firm offers products configured from a large number of stocked options and subassemblies. Which of the following production environments is the firm most likely to use? - ANSWER-ATO Which of the following statements is true for a company that uses the first-in, first-out method of evaluating inventory in a market where prices are decreasing? - ANSWER- The replacement value of products will be overstated. Which of the following inventory evaluation methods best measures falling costs? - ANSWER-Standard cost Which of the following considerations is primary when contracting with a supplier in a lean environment? - ANSWER-Product quality A firm's marketing strategy directly impacts the production plan by which of the following actions? - ANSWER-Increasing demand Which of the following warehouse activities involves bringing goods together and checking for omissions or errors in the order? - ANSWER-Marshalling the shipment In a market where customers accept a standardized product offering, which of the following situations is characteristic of the production environment? - ANSWER-The master schedule typically is stated for the finished product level. After an order is released, it turns out that not all of the resources needed are available. What will happen next? - ANSWER-There will be idle capacity at some work centers unless rescheduled. Using ABC classification for cycle counting, A items are counted every week, B items are counted quarterly, and C items are counted annually. There are 2,000 A items, 5,000 B items, and 20,000 C items. How many items are counted each day in total if there are 50 working weeks in the year translating to 250 workdays in the year? - ANSWER-560 units EXPLANATION: To determine the total number of items to count, multiply the number of items by the number of times the item is counted for each class and then sum the results. A items are counted weekly, so this is 50 times per year: 2,000 units × 50 weeks = 100, counts. B items are counted quarterly, so this is 4 times per year: 5,000 × 4 = 20, counts. C items are counted once, so this is just 20,000 counts. Next, sum the counts: 100,000 counts + 20,000 counts + 20,000 counts = 140,000 counts. Then divide this sum by the number of manufacturing calendar days in the year: 140,000 counts/ days = 560 counts per day.
Which type of specification requirement for supplier selection includes quality requirements? - ANSWER-Functional Using reusable packaging, such as bins or racks, rather than corrugated containers is an example of: - ANSWER-Green reverse logistics The optimal way to avoid a constraint downstream is by: - ANSWER-establishing a space buffer. What three pieces of information should agree before payment is made on a supplier's invoice? - ANSWER-Purchase order, receiving report, and invoice Which of the following describes the break-even point? - ANSWER-Total revenue equals total cost. When using throughput (theory of constraints) accounting, what is an important question to ask marketing and/or production professionals related to the throughput component of the analysis? - ANSWER-Will higher output be converted to cash quickly or sit in inventory? What is the best way for a company to reduce the cost of quality and improve customer satisfaction? - ANSWER-Reduce process variability. Which of the following outcomes is a result of sales and operations planning? - ANSWER-Formal balancing of supply and demand Which is an inventory rule that is often applied to C items in ABC classification? - ANSWER-Keep ample safety stock What would likely be the result if an organization wanted to reduce material prices for material requirements planning (MRP) ordered materials that are commodities by requiring use of the standard purchasing cycle rather than relying on contract buying? Answers - ANSWER-Much higher ordering cost On the balance sheet, if owners' equity is $5,000 and liabilities are $3,000, what are the assets? - ANSWER-$8, Which of the following statements is true about inventory in an engineer-to-order (ETO) environment? - ANSWER-Buffer inventory should be held closer to the raw material stage. What is typically prepared after receipt of a customer order to schedule the operations required to complete the product? - ANSWER-Final assembly schedule
A stockkeeping unit in a distribution system describes: - ANSWER-an item at a particular geographic location. Which of the following is typically a production activity control (PAC) responsibility in a flow manufacturing environment? - ANSWER-Monitoring the output of each production line How can lead time offset be described? - ANSWER-Establishing planned order release dates by the duration of the lead time The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization is known as: - ANSWER- transportation. Based on the information below, what is the number of days of supply for this item closest to? On-hand inventory: 9,600 units Annual usage: 130, Reorder point: 1,200 units Reorder quantity: 3,600 units Working days per year: 260 - ANSWER- EXPLANATION: Days of supply equals inventory on hand divided by the average daily usage. The average daily usage is the annual usage divided by the working days per year. For this problem, average daily usage is calculated as 130,000/260 = 500. Days of supply is calculated as 9,600/500 = 19.2, rounded here to 19. A supply chain handles used automobile computers, which are sent to a remanufacturer that repairs and reprograms them. The computers are then returned to the market. This is an example of: - ANSWER-reverse logistics Global competition is increasing primarily because of which of the following factors? - ANSWER-Transportation and communication cost less and are more effective. Forecasts are more accurate for: - ANSWER-nearer time periods. Which of the following factors has the greatest impact on reducing transportation inventory? - ANSWER-Transit time Which of the following factors are believed to have the most strategic impact on a business's operating environment? - ANSWER-Government, economy, competition, customer expectations, quality Which cost will decrease if order quantity decreases? - ANSWER-Annual cost of carrying inventory
