CPIM-Part-2 Exam Dumps - APICS CPIM Questions and Answers

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 capacityconstraints 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. References := 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)

Hedge is a risk management strategy that assumes that losses in one part of the supply chain will be offset by gains in another. Hedge is a method of reducing the exposure to price fluctuations, currency fluctuations, or other uncertainties by taking a position in a related market or asset that moves in the opposite direction. Hedge helps to protect the profitability and cash flow of the supply chain by locking in the prices or rates at a certain level. For example, a company that imports raw materials from another country may hedge against the exchange rate risk by buying a forward contract or an option that guarantees a fixed rate for the currency conversion.

The other options are not risk management strategies that assume that losses in one part of the supply chain will be offset by gains in another. Flexible is a risk management strategy that allows the supply chain to adapt to changing conditions and customer preferences by using multiple sources, modes, or routes. Fluctuation is not a risk management strategy, but a term that describes the variation or volatility of a market or asset over time. Speculative is not a risk management strategy, but a term that describes an activity or investment that involves a high degree of uncertainty or risk, with the expectation of earning a high return. References: CPIM Exam Content Manual Version 7.0, Domain 7: Plan and Manage Distribution, Section 7.1: Distribution Planning Concepts, p. 40; Hedging; Hedging Definition.

The change in level of work-in-process (WIP) inventory is the most appropriate indicator to evaluate the effectiveness of the detailed capacity planning processes for a firm that produces a moderate variety of products to stock in a single plant. Detailed capacity planning is the process of determining the quantity and timing of resources, such as labor, equipment, and materials, needed to execute the master production schedule (MPS) at the work center level1. The MPS is a plan that specifies the quantity and timing of end items to be produced in a given time period2. The change in level of WIP inventory is a measure of the difference between the amount of WIP inventory at the beginning and at the end of a period3. WIP inventory consists of partially completed products or components that are waiting for further processing or assembly.

The change in level of WIP inventory can indicate how well the detailed capacity planning processes are aligned with the MPS and the actual demand. A positive change in WIP inventory means that more products or components are being produced than consumed, which implies that there is excess capacity or insufficient demand. A negative change in WIP inventory means that more products or components are being consumed than produced, which implies that there is insufficient capacity or excess demand. A zero or minimal change in WIP inventory means that the production and consumption rates are balanced, which implies that there is optimal capacity and demand. Therefore, by monitoring the change in level of WIP inventory, the firm can evaluate whether its detailed capacity planning processes are effective in meeting customer needs and expectations, as well as minimizing inventory costs and maximizing resource utilization.

The other options are not as appropriate indicators to evaluate the effectiveness of the detailed capacity planning processes for a firm that produces a moderate variety of products to stock in a single plant. Units of output per direct labor hour is a measure of labor productivity, which indicates how efficiently labor is used to produce output. However, labor productivity does not reflect the effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as equipment, materials, quality, or demand. Percentage of master schedule attained is a measure of schedule performance, which indicates how well the actual production matches the planned production. However, schedule performance does not reflect the effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as capacity constraints, resource availability, or customer satisfaction. Level of finished goods inventory is a measure of inventory management, which indicates how much inventory is available to meet customer orders. However, finished goods inventory does not reflectthe effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as product variety, lead time, or quality.

References: Detail Capacity Planning - Capacity Planning - Gaebler.com Resources …; Master Production Schedule (MPS) Definition | Operations & Supply Chain Dictionary; Work-in-Process Inventory: Definition & Example - Video & Lesson Transcript | Study.com; [Work-in-Process (WIP) Definition - Investopedia]; [Labor Productivity Definition - Investopedia]; [Labor Productivity: Definition & Statistics - Video & Lesson Transcript | Study.com]; [Schedule Performance Index (SPI) Definition - Investopedia]; [Schedule Performance Index (SPI) & Cost Performance Index (CPI) in Project Cost Management]; [Finished Goods Inventory: Definition & Formula - Video & Lesson Transcript | Study.com]; [Finished Goods Inventory: Definition & Example - Video & Lesson Transcript | Study.com].

A capacity-leading strategy is a proactive approach that adds or subtracts capacity in anticipation of future market demand. It is an aggressive strategy with the objective of improving the service level and decreasing lead time1. An advantage of adopting a capacity-leading strategy is that there issufficient capacity to meet demand, which means that the organization can satisfy customer needs and expectations, as well as capture new market opportunities. A capacity-leading strategy can also help the organization gain a competitive edge by being the first to offer new products or services, or by lowering prices due to economies of scale2.

The other options are not advantages of adopting a capacity-leading strategy. There is not necessarily sufficient demand to consume capacity, which means that the organization may face overcapacity problems, such as high inventory costs, low utilization rates, and reduced profitability3. All demand is not satisfied, and profit is not maximized, because there may be other factors that affect customer satisfaction and profitability, such as quality, price, or service4. Overcapacity problems are not minimized, but rather increased, by adopting a capacity-leading strategy, because the organization may have more capacity than needed if demand does not increase as expected3.

References: CPIM Part 2 Exam Content Manual, Domain 4: Plan and Manage Supply, Section 4.1: Supply Management Concepts and Tools, p. 33-34; Capacity Planning Strategies: Types, Examples, Pros And Cons - Toggl; Lead Capacity Strategy, Lead Demand Strategy - UniversalTeacher.com; Capacity Planning Strategies For End-to-End Supply Chain Profitability; Capacity Planning Strategies: Types, Examples, Pros And Cons - Toggl.

The sales and operations planning (S&OP) process is a cross-functional process that aligns the demand and supply plans of an organization. The S&OP process consists of several steps, such as data gathering, demand planning, supply planning, pre-S&OP meeting, executive S&OP meeting, and S&OP implementation. The output of the S&OP process is the production plan, which is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The production plan can be stated in different units of measure depending on the type of manufacturing environment. In a repetitive manufacturing environment, where the same or similar products are produced continuously or at regular intervals, the production plan can be stated in terms of the number of products planned for shipment. This unit of measure reflects the volume and mix of products that are expected to be sold and delivered to the customers. The number of products planned for shipment can also be used to calculate the capacity requirements, material requirements, and inventory levels for each product family.

References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1: Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).

Scrap allowance is a percentage or quantity of material that is expected to be lost or wasted during the production process. Scrap allowance is usually applied to the component items in a bill of materials (BOM), which is a document that lists the materials, quantities, and relationships required to produce an end item. An increase in the scrap allowance in an assembled item will result in replanning of the component items in material requirements planning (MRP), which is a system that calculates the timing and quantity of materials and resources needed to meet the production plan. Replanning of the component items in MRP means that the system will adjust the planned order releases, order quantities, and due dates of the component items to account for the increased scrap allowance. Replanning of the component items in MRP will ensure that enough material is available to meet the demand for the assembled item, and to avoid shortages or excess inventory.

References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.2: Implement Supply Plans, Subsection 4.2.1: Describe how to implement material requirements planning (MRP) (page 38).

Visual control boards are tools that display the key performance indicators (KPIs) and metrics of a production system in a graphical and easy-to-understand format. Visual control boards are usually located at several locations within the production facility, such as the work centers, the shop floor, or the management office. Visual control boards help to communicate operational performance by providing real-time and relevant information, enabling quick feedback and corrective actions, and promoting transparency and accountability.

The other options are not the most effective approaches in communicating operational performance. Quality performance measures are indicators that evaluate the degree to which the products or services meet or exceed the specifications and standards. Quality performance measures are important for communicating operational performance, but they are not sufficient, as they do not cover other aspects of performance, such as cost, time, or customer satisfaction. Reviewing conformance to schedule is a method of comparing the actual production output with the planned production output, based on the master production schedule or the material requirements plan. Reviewing conformance to schedule is useful for communicating operational performance, but it is not timely, as it is usually done after the production is completed, and it does not provide enough details or explanations for the deviations or variances. Monthly meetings with employees are events that involve discussing and reviewing the operational performance with the staff members who are involved in the production process. Monthly meetings with employees are beneficial for communicating operational performance, but they are not frequent, as they are only held once a month, and they may not be effective, as they may lack participation or engagement from the employees.

A part that is sold as a service part and also used as a component in another part is called a dual-sourced item. A dual-sourced item has two sources of demand: the external demand from the customers who buy the service part, and the internal demand from the parent part that uses the component. The planning for a dual-sourced item should include both sources of demand in the gross requirements, so that the net requirements can be calculated correctly. The service part demand can be included in the gross requirements by using a planning bill of material, which is a special bill of material that shows the relationship between a parent item and its service parts. A planning bill of material allows the system to explode the service part demand to the component level and generate planned orders for both the service part and the component.

The other statements about the planning for this part are false. Its low-level code is not zero, because it is not an independent item. It has a higher low-level code than its parent item, because it is a component of another item. The material requirements for the part will not be understated, if both sources of demand are included in the gross requirements. It should have some safety stock, to protect against demand and supply uncertainties. References: CPIM Part 2 Exam Content Manual, Domain 4: Plan and Manage Supply, Section 4.2: Material Requirements Planning (MRP), p. 22-23.

A two-bin system is a type of inventory management technique that uses two containers or bins to store and replenish items. When the first bin is empty, the second bin is used to supply the demand while the first bin is reordered. A two-bin system is most responsive to changes in demand levels because it triggers replenishment orders based on actual consumption rather than fixed time intervals or reorder points. A two-bin system can reduce stockouts, improve service levels, and lower inventory costs. References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2: Implement Inventory Plans, Subsection 5.2.3: Describe how to implement inventory replenishment techniques (page 46).

A control chart is a tool that shows process changes and random variation over time. A control chart is a graph that plots data points over time and shows the mean and the upper and lower control limits of the process. The mean is the average value of the data, and the control limits are the boundaries of the normal variation of the process. A control chart can help monitor the stability and performance of a process by detecting any unusual or non-random patterns in the data, such as trends, cycles, or shifts. A control chart can also help identify the sources of variation in the process, whether they are common causes (inherent to the process) or special causes (external factors). A control chart can be used for both variable data (measured on a continuous scale) and attribute data (counted or categorized).

A check sheet is a tool that collects and summarizes data in a structured way. A check sheet is a simple form that records the frequency or occurrence of specific events or problems during a process. A check sheet can help organize and analyze data by showing patterns, trends, or relationships among the data. A check sheet can also help identify potential causes of problems or areas for improvement.

A histogram is a tool that displays the distribution of data in a graphical way. A histogram is a type of bar chart that shows how many times each value or range of values occurs in a data set. A histogram can help describe and compare data by showing the shape, center, spread, and variation of the distribution. A histogram can also help identify outliers, gaps, or clusters in the data.

A Pareto analysis is a tool that prioritizes problems or causes based on their frequency or impact. A Pareto analysis is based on the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. A Pareto analysis uses a combination of a bar chart and a line graph to show the relative importance of different factors in a process. The bars represent the frequency ormagnitude of each factor, and the line represents the cumulative percentage of the total effect. A Pareto analysis can help focus on the most significant problems or causes and allocate resources accordingly.

References := Control Chart - Statistical Process Control Charts | ASQ, A Guide to Control Charts - iSixSigma, 2 Tools to Understand Variation in Your Improvement Journey, Understanding variation | Turas | Learn