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

Available-to-promise (ATP) is a business function that provides a response to customer order inquiries, based on resource availability1. It generates available quantities of the requested product, and delivery due dates. Therefore, ATP supports order promising and fulfillment, aiming to manage demand and match it to production plans1.

The most appropriate course of action when the customer requests an order of 100 units in Period 1, but the ATP is only 85 units, is to promise the 85 units in Period 1 and the remaining 15 units in the next possible ATP period. This way, the customer can receive a partial fulfillment of their order as soon as possible, and the rest of their order when more inventory becomes available. This approach also avoids overpromising or underdelivering, which can damage customer relationships and satisfaction.

The other options are not appropriate, because they either violate the master schedule, ignore the component availability, or disadvantage another customer. Increasing the MPS quantity in Period 1 by 15 units may not be feasible or desirable, because it may disrupt the production plan, increase costs, or create capacity issues. Promising the 100 units, and then checking on component availability may result in a failure to deliver, if the components are not available or sufficient. Promising the 100 units by removing 15 units from another customer’s order with a smaller revenue value may be unethical or unfair, and may also cause dissatisfaction or complaints from the other customer.

Resource planning is a planning module that considers the longest-range planning goals. Resource planning is a method of determining the long-term capacity and resource requirements for a manufacturing system, based on the aggregate production plan, the sales and operations plan, and the business plan. Resource planning helps to align the production capacity and resources with the strategic objectives and goals of the organization. Resource planning considers the longest-range planning goals, which are usually expressed in terms of years or quarters.

The other options are not planning modules that consider the longest-range planning goals. Capacity requirements planning (CRP) is a planning module that calculates the capacity and load for each work center in a manufacturing system, based on the material requirements plan, the routing file, and the open order file. CRP helps to identify and resolve the capacity constraints and bottlenecks in the production process. CRP considers the short-range planning goals, which are usually expressed in terms of days or weeks. Input/output analysis is a planning module that compares the actual input/output of each work center in a manufacturing system with the planned input/output, based on the capacity requirements plan and the shop floor data. Input/output analysis helps to monitor and control the performance and efficiency of each work center. Input/output analysis considers the short-range planning goals, which are usually expressed in terms of days or weeks. Rough-cut capacity planning (RCCP) is a planning module that estimates the feasibility and adequacy of the key resources or work centers in a manufacturing system, based on the master production schedule and the bill of resources. RCCP helps to validate and adjust the master production schedule according to the available capacity and resources. RCCP considers the medium-range planning goals, which are usually expressed in terms of months or weeks. References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.2: Supply Planning Methods, p. 26; Resource Planning; Capacity Requirements Planning.

The load on a work center is the total time required to complete all the work orders assigned to that work center. The load can be calculated by multiplying the quantity and the run time of each work order, and then adding them up. The formula is:

Load = (Q1 x R1) + (Q2 x R2) + … + (Qn x Rn)

Where Q is the quantity and R is the run time of each work order.

Using the data from the table, we can plug in the values and get:

Load = (10 x 8) + (15 x 9) + (12 x 7.5) + (20 x 10) + (8 x 6.5) = 80 + 135 + 90 + 200 + 52 = 557

Therefore, the load on this work center is 557 hours.

References: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.3: Monitor Detailed Schedules, Subsection 6.3.2: Describe how to monitor input/output control (I/O) (page 60).

Producing to backorders means that the company only produces goods when there is a confirmed customer order. This strategy is most appropriate during times of highly fluctuating demand, as it allows the company to avoid holding excess inventory that may incur high carrying costs and become obsolete. Producing to backorders also enables the company to adjust its workforce according to the actual demand, which can be easily changed as the question states. This strategy can improve customer satisfaction, as the products are tailored to the specific needs and preferences of each customer. However, producing to backorders also has some drawbacks, such as longer lead times, higher production costs, and lower economies of scale.

The other strategies are less suitable for highly fluctuating demand. Producing at a constant level means that the company produces goods at a fixed rate regardless of the demand fluctuations. This strategy can result in either excess inventory or stockouts, depending on whether the demand is lower or higher than the production level. Producing to the sales forecast means that the company produces goods based on the projected demand for a certain period. This strategy can be effective if the forecast is accurate, but it can also lead to inventory imbalances if the forecast is inaccurate or if there are unexpected changes in demand. Producing to demand means that the company produces goods based on the current demand in the market. This strategy can be responsive and flexible, but it can also be challenging to implement, as it requires high visibility, coordination, and agility in the supply chain.

References : 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.

A sales forecast that is based solely on shipment history is a method that uses past sales data to predict future sales. This method assumes that the sales pattern will remain consistent over time, and does not account for any changes or fluctuations in demand or supply1. Therefore, this method can be distorted by any factors that affect the availability or delivery of the products, such as material shortages.

Material shortages are situations where the supply of raw materials, components, or finished goods is insufficient to meet the demand. Material shortages can be caused by various reasons, such as natural disasters, supplier issues, transportation disruptions, quality problems, or demand spikes2. Material shortages can have a negative impact on the sales forecast that is based solely on shipment history, because they can reduce the amount of products that can be shipped to customers, and thus lower the sales revenue. Material shortages can also create a backlog of orders that cannot be fulfilled in time, and thus create a gap between the actual and forecasted sales3.

The other factors listed in the question typically would not distort a sales forecast that is based solely on shipment history, because they do not affect the shipment history directly. Labor rate changes are changes in the wages or salaries paid to workers. They may affect the production costs and profits, but not necessarily the sales volume or revenue4. Currency exchange rates are the rates at which one currency can be exchanged for another. They may affect the competitiveness and profitability of international sales, but not necessarily the sales volume or revenue5. Customer demands are the needs and preferences of customers for products or services. They may affect the sales potential and market share, but not necessarily the sales volume or revenue.

The information about the consistent overage in actual run time for one operation should be sent first to the engineering manager to evaluate the run time for the routing. A routing is a document that specifies the sequence of operations and work centers required to produce a product or feature. A run time is the amount of time needed to perform an operation or a task at a work center. An overage in actual run time means that the actual time spent on an operation or a task is more than the planned or standard time. This can result in lower efficiency, productivity, or quality, as well as higher costs, waste, or delays.

The engineering manager is responsible for designing and maintaining the routing and the run time for each operation or task. The engineering manager can evaluate the run time for the routing by comparing the actual and planned times, identifying the causes of the overage, and taking corrective actions. For example, the engineering manager may:

• Review the accuracy and validity of the planned or standard time, and update it if necessary.
• Analyze the performance and capability of the machines, equipment, or labor involved in the operation or task, and improve them if needed.
• Investigate the presence of any errors, defects, rework, or variability in the operation or task, and eliminate them if possible.
• Implement lean production techniques, such as value stream mapping, waste reduction, or continuous improvement, to optimize the operation or task.

The other options are not appropriate for sending the information about the consistent overage in actual run time for one operation first. The product manager is not responsible for designing or maintaining the routing or the run time for each operation or task. The product manager is responsible for managing and marketing the product or feature, such as defining its specifications, features, price, or promotion. Increasing the selling price of the product is not a solution for addressing the overage in actual run time, as it may reduce customer demand or satisfaction, as well as increase competition. The quality manager is not responsible for designing or maintaining the routing or the run time for each operation or task. The quality manager is responsible for ensuring and improving the quality of the product or feature, such as setting quality standards, implementing quality control methods, or conducting quality audits. Adding a new qualitymeasurement to the operation is not a solution for addressing the overage in actual run time, as it may increase complexity or cost without improving efficiency or productivity. The production supervisor is not responsible for designing or maintaining the routing or the run time for each operation or task. The production supervisor is responsible for overseeing and coordinating the production activities at a work center, such as scheduling operations, assigning resources, monitoring performance, or resolving issues. Reviewing and explaining the overage in actual run time is not a solution for addressing it, as it does not identify or eliminate its causes.

References := [Routing - an overview | ScienceDirect Topics], [Run Time - an overview | ScienceDirect Topics], [Engineering Manager Job Description - Betterteam], [Product Manager Job Description - Betterteam], [Quality Manager Job Description - Betterteam], [Production Supervisor Job Description - Betterteam]

A reduction in purchased lot sizes will reduce inventory levels. Purchased lot sizes are the quantities of inventory that a stage of the supply chain either produces or purchases at a given time1. Inventory levels are the amount of stock available throughout the distribution network2. By reducing the purchased lot sizes, a company can lower the amount of inventory it holds, which can reduce the inventory costs, such as holding costs, shortage costs, and order costs3.

Holding costs are the costs associated with storing and maintaining inventory, such as rent, utilities, insurance, taxes, depreciation, and obsolescence4. Shortage costs are the costs incurred when demand exceeds supply, such as lost sales, customer dissatisfaction, and backorder costs4. Order costs are the costs involved in placing and receiving orders, such as transportation, inspection, setup, and administrative costs4.

Reducing the purchased lot sizes can lower the holding costs by decreasing the average inventory in the supply chain due to either production or purchases in lot sizes that are larger than those demanded by the customer1. This is also known as cycle inventory1. Reducing the purchased lot sizes can also lower the shortage costs by increasing the frequency of orders and decreasing the lead time between orders5. This can help avoid stockouts and meet customer demand more consistently. Reducing the purchased lot sizes can also lower the order costs by optimizing the order quantity based on the trade-off between holding costs and order costs. This is also known as economic order quantity (EOQ).

Therefore, a reduction in purchased lot sizes will reduce inventory levels and inventory costs.

References: 1: Chapter 11 Flashcards by Amy Horton 3 2: Optimal Inventory Levels: Calculate & Manage Your Stock Levels 2 3: Inventory Levels Explained: The Highs & Lows Of Optimal Stock 1 4: Economic Order Quantity Model in Inventory Management 4 5: Dual sourcing: Advantages and disadvantages : Economic Order Quantity: What Does It Mean and Who Is It For5

 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.

References: 1: Take Time Definition 1 2: Cycle Time Definition 2 3: Safety Capacity Definition 3 4: Lean Manufacturing Definition 4 5: The Seven Wastes of Lean 5 6: Capacity Planning Tools 6 7: Excess Capacity

 A cradle-to-cradle sustainability model is a design approach that seeks to reuse all materials and components and eliminate waste. It is based on the concept of circular economy, which aims to keep materials in use for as long as possible and regenerate natural systems12. A cradle-to-cradle sustainability model follows the principle of a potentially infinite circular economy, where all products are designed to be either biodegradable or recyclable3.

An example of a cradle-to-cradle sustainability model would be a coffee shop that collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier. This example shows how the coffee shop closes theloop of the paper material cycle, by reusing the paper waste as an input for new paper products. This way, the coffee shop reduces its environmental impact, saves resources, and supports the circular economy.

The other options are not examples of a cradle-to-cradle sustainability model, because they do not reuse all materials and components and eliminate waste. A laundry service that collects dirty baby clothes from families, cleans them in large, efficient batches, and then sorts and delivers them back to each family is an example of a service-based business model, which reduces the need for owning products and extends their lifespan, but does not necessarily reuse or recycle the materials4. A company that uses wood that has been gathered from multiple sources to construct items, such as beds and toys for babies and young children is an example of a product-based business model, which may use renewable or recycled materials, but does not guarantee that the products are biodegradable or recyclable5. A bank that offers the lowest interest rates on loans to firms that are committed to using recycled materials and implementing zero-waste initiatives in their processes is an example of a financial incentive scheme, which encourages sustainable practices, but does not directly reuse or recycle materials6.

 A product family is a group of products that share common characteristics, components, or functions, and that satisfy a similar customer need or market segment1. A bill of material (BOM) is a list of all the materials, components, and subassemblies required to manufacture a product2. A BOM can have different levels, depending on the complexity and structure of the product. The most common levels are:

• Final assembly level: This is the highest level of the BOM, where the finished product is shown as a single item. This level contains the basic information about the product, such as its name, description, quantity, and unit of measure2.
• Subassembly level: This is the intermediate level of the BOM, where the subassemblies or modules that make up the final product are shown as separate items. A subassembly is a group of components or parts that are assembled together to perform a specific function within the final product3. This level contains the information about the subassemblies, such as their names, descriptions, quantities, units of measure, and relationships to the final product2.
• Component level: This is the lowest level of the BOM, where the individual components or parts that make up the subassemblies or the final product are shown as separate items. A component is a basic element or material that is used to manufacture a subassembly or a final product4. This level contains the information about the components, such as their names, descriptions, quantities, units of measure, and relationships to the subassemblies or the final product2.

The most appropriate level of the BOM to forecast for a product family depends on several factors, such as the demand variability, production lead time, inventory cost, and customer preference of each level5. However, in general, it is advisable to forecast at the highest possible level of aggregation that still meets the customer requirements and expectations5. This is because forecasting at a higher level can reduce the forecast error and uncertainty, improve the forecast accuracy and reliability, and simplify the forecasting process5.

Therefore, for a product family that consists of 46 items, each having 5 features available and 6 options available, it would be most appropriate to forecast at the final assembly level items. This is because forecasting at this level can capture the overall demand pattern and trend of the product family, without getting into too much detail or complexity. Forecasting at this level can also allow for more flexibility and responsiveness in meeting customer needs and preferences by using postponement strategies6. Postponement strategies involve delaying some aspects of production or customization until after receiving customer orders6. For example, instead of forecasting and producing each item with each feature and option in advance, which would result in 46 x 5 x 6 = 1380 different combinations, the company can forecast and produce only 46 items at the final assembly level and then add features and options later according to customer orders.

The other options are not as appropriate as forecasting at the final assembly level items. Forecasting at the subassembly level items may be too detailed and complex for a product family with many features and options available. Forecasting at this level may result in higher forecast error and uncertainty, lower forecast accuracy and reliability, and more complicated forecasting process. Forecasting at this level may also reduce flexibility and responsiveness in meeting customer needs and preferences by committing resources too early in production. Forecasting at the component level items may be even more detailed and complex than forecasting at the subassembly level items. Forecasting at this level may have all the disadvantages mentioned above, as well as increase inventory cost and risk by holding too many components in stock.

References : Product Family Definition; Bill of Materials (BOM) – An Essential Guide with Examples; Subassembly Definition; Component Definition; Forecasting for Bill of Materials Inventory - EazyStock; Postponement Strategy: Definition & Benefits.