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Which of the following risk management strategies assumes that losses in one part of the supply chain will be offset by gains in another?

A.
Flexible
A.
Flexible
Answers
B.
Fluctuation
B.
Fluctuation
Answers
C.
Hedge 5
C.
Hedge 5
Answers
D.
Speculative
D.
Speculative
Answers
Suggested answer: C

Explanation:

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.Reference: CPIM Exam Content Manual Version 7.0, Domain 7: Plan and Manage Distribution, Section 7.1: Distribution Planning Concepts, p. 40; Hedging; Hedging Definition.

Fishbone diagrams would help a service organization determine:

A.
the proper level of service for a customer segment.
A.
the proper level of service for a customer segment.
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B.
the source of a quality-of-service issue.
B.
the source of a quality-of-service issue.
Answers
C.
differences in the performance of employees.
C.
differences in the performance of employees.
Answers
D.
the decomposition of customer return rates with seasonality.
D.
the decomposition of customer return rates with seasonality.
Answers
Suggested answer: B

Explanation:

A fishbone diagram, also known as a cause-and-effect diagram or an Ishikawa diagram, is a tool for identifying and analyzing the possible causes of a problem or an effect. It is often used in quality management to find the root causes of defects or errors. A fishbone diagram has a main branch that represents the problem or effect, and several sub-branches that represent the categories of causes, such as people, processes, equipment, materials, environment, etc. Each category can have further sub-branches that represent more specific causes. A fishbone diagram would help a service organization determine the source of a quality-of-service issue by allowing them to visualize and organize the potential factors that contribute to the problem and identify the most likely cause.Reference: CPIM Part 2 Exam Content Manual, Domain 8: Manage Quality, Continuous Improvement, and Technology, Section 8.1: Quality Management Concepts and Tools, p. 59-60.

In a make-to-order (MTO) environment, inputs to sales and operations planning (S&0P) should include the:

A.
projected backlog of customer orders.
A.
projected backlog of customer orders.
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B.
work-in-process (WIP) inventory.
B.
work-in-process (WIP) inventory.
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C.
finished goods inventory.
C.
finished goods inventory.
Answers
D.
available-to-promise (ATP) data.
D.
available-to-promise (ATP) data.
Answers
Suggested answer: A

Explanation:

In a make-to-order (MTO) environment, the production process is triggered by customer orders, which means there is no finished goods inventory or work-in-process inventory to consider in the sales and operations planning (S&OP) process. The available-to-promise (ATP) data is not an input to the S&OP process, but rather an output that indicates the quantity and date of products that can be promised to customers based on the current supply plan. The projected backlog of customer orders, on the other hand, is an important input to the S&OP process, as it reflects the current and future demand for the products and services offered by the organization. The projected backlog can help the organization plan its capacity, resources, materials, and delivery schedules to meet customer expectations and optimize profitability.Reference: CPIM Part 2 Exam Content Manual, Domain 3: Plan and Manage Demand, Section 3.1: Demand Management Concepts and Tools, p. 27-28.

The approved output of the distribution requirements planning (DRP) process is an input to which of the following planning processes?

A.
Strategic
A.
Strategic
Answers
B.
Business
B.
Business
Answers
C.
Master production 0
C.
Master production 0
Answers
D.
Final assembly
D.
Final assembly
Answers
Suggested answer: C

Explanation:

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.

When developing a quantitative model to support sales and operations planning (S&OP), which of the following statements is most true?

A.
It is necessary to capture all of the detail in order to create a useful model.
A.
It is necessary to capture all of the detail in order to create a useful model.
Answers
B.
Aggregation will be necessary to develop an appropriate model.
B.
Aggregation will be necessary to develop an appropriate model.
Answers
C.
Clear objectives are not necessary to begin the modeling process.
C.
Clear objectives are not necessary to begin the modeling process.
Answers
D.
A minimal level of effort is required to develop a model.
D.
A minimal level of effort is required to develop a model.
Answers
Suggested answer: B

Explanation:

A quantitative model is a mathematical representation of a real-world situation that involves numbers, variables, equations, and logic. A quantitative model can be used to support sales and operations planning (S&OP), which is a process of aligning the demand and supply plans of an organization at an aggregate level. To develop a quantitative model for S&OP, the following statements are most true:

It isnotnecessary to capture all of the detail in order to create a useful model. In fact, too much detail can make the model complex, unrealistic, and difficult to solve.A useful model should capture the essential features of the situation and simplify the irrelevant or insignificant aspects1.

Aggregation will benecessaryto develop an appropriate model. Aggregation is the process of combining data or information into higher-level categories or groups. For example, products can be aggregated into product families, customers can be aggregated into market segments, and time periods can be aggregated into months or quarters.Aggregation can help reduce the size and complexity of the model, as well as improve its accuracy and reliability2.

Clear objectives arenecessaryto begin the modeling process. Objectives are the desired outcomes or goals that the model aims to achieve or optimize. For example, an objective of S&OP could be to maximize profit, minimize cost, or balance inventory.Clear objectives can help define the scope, structure, and criteria of the model3.

Asignificantlevel of effort is required to develop a model. Developing a model involves several steps, such as defining the problem, collecting and analyzing data, formulating and testing the model, implementing and validating the solution, and evaluating and improving the results.Each step requires careful planning, execution, and evaluation4.

Staging in a manual system corresponds to which of the following functions in a computer system?

A.
Order release
A.
Order release
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B.
Allocation
B.
Allocation
Answers
C.
Dispatching
C.
Dispatching
Answers
D.
Bill-of-material explosion
D.
Bill-of-material explosion
Answers
Suggested answer: C

Explanation:

Staging in a manual system corresponds to dispatching in a computer system.Staging is the process of preparing and moving materials or components to the point of use or consumption in a production system1.Staging can be done manually by workers who physically move the items from storage areas to workstations, or automatically by conveyors, robots, or other devices2.Dispatching is the process of authorizing and releasing work orders or tasks to the production system3.Dispatching can be done manually by supervisors who assign work to workers, or automatically by computer systems that use algorithms or rules to prioritize and schedule work4. Both staging and dispatching are functions that facilitate the flow of materials and information in a production system and ensure that the right items are available at the right time and place.

Which of the following observations in a manufacturing plant best illustrates the poka-yoke technique of process design?

A.
The number of types of fasteners is reduced from 25 to 5.
A.
The number of types of fasteners is reduced from 25 to 5.
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B.
Customized containers hold mixed sets of parts.
B.
Customized containers hold mixed sets of parts.
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C.
An andon is installed.
C.
An andon is installed.
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D.
A part attribute defines correct orientation.
D.
A part attribute defines correct orientation.
Answers
Suggested answer: D

Explanation:

The poka-yoke technique of process design is a method for preventing or detecting errors and defects in the manufacturing process.Poka-yoke means ''mistake-proofing'' in Japanese, and it aims to eliminate human errors by creating systems that either make it impossible for a mistake to occur or make the mistake immediately obvious once it has occurred1.One way to implement poka-yoke is to use part attributes, which are physical features of a part that ensure it can only be assembled or used in the correct way2. For example, a part attribute can define the correct orientation of a part, such as a notch, a hole, a shape, or a color, so that it can only fit into the matching component. This prevents the operator from inserting the part incorrectly or using the wrong part.

The other options do not illustrate the poka-yoke technique of process design.Reducing the number of types of fasteners is an example of standardization, which is a method for simplifying and streamlining the production process by minimizing variation and complexity3.Customized containers that hold mixed sets of parts are an example of kitting, which is a method for organizing and delivering parts or materials to the point of use or consumption in the production process4.An andon is a visual or audible signal that indicates the status of a machine or process, such as normal, abnormal, or emergency5. An andon can be used to alert operators or supervisors of problems or issues, but it does not prevent or detect errors by itself.

Which of the following situations is most likely to occur when using a push system?

A.
Work centers receive work even if capacity is not available.
A.
Work centers receive work even if capacity is not available.
Answers
B.
Work centers are scheduled using finite capacity planning.
B.
Work centers are scheduled using finite capacity planning.
Answers
C.
Work centers operate using decentralized control.
C.
Work centers operate using decentralized control.
Answers
D.
Work centers signal previous work centers when they are ready for more work.
D.
Work centers signal previous work centers when they are ready for more work.
Answers
Suggested answer: A

Explanation:

A push system is a production system that operates based on planned or forecasted demand, rather than actual or current demand. In a push system, work orders or tasks are released to the work centers according to a predetermined schedule, regardless of the availability of capacity or resources at the work centers.This means that work centers may receive work even if they are already overloaded or have no idle time, which can result in long lead times, high inventory levels, and poor customer service1.

The other options are more likely to occur when using a pull system, which is a production system that operates based on actual or current demand, rather than planned or forecasted demand. In a pull system, work orders or tasks are released to the work centers only when there is a need or a request from the downstream work centers or customers.This means that work centers are scheduled using finite capacity planning, which is a method of allocating capacity and resources based on the actual availability and constraints of the work centers2.Work centers also operate using decentralized control, which means that each work center has the autonomy and authority to make decisions based on the local conditions and signals from the environment3.Work centers also signal previous work centers when they are ready for more work, which is a way of synchronizing the flow of materials and information along the production process4.

To successfully empower individuals to drive change, an organization should:

A.
ensure everyone can clearly articulate the business's vision and strategy.
A.
ensure everyone can clearly articulate the business's vision and strategy.
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B.
conduct thorough training programs for all levels of employees.
B.
conduct thorough training programs for all levels of employees.
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C.
align performance appraisals with the business's vision.
C.
align performance appraisals with the business's vision.
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D.
establish and track broad change metrics on a quarterly basis.
D.
establish and track broad change metrics on a quarterly basis.
Answers
Suggested answer: A

Explanation:

To successfully empower individuals to drive change, an organization should ensure everyone can clearly articulate the business's vision and strategy. According to various sources, such asForbes,Mercuri Urval, andLSA Global, one of the key factors for effective change leadership is to communicate a powerful and compelling change vision that inspires and motivates employees to support the change.A change vision is a statement that describes the desired future state of the organization after the change is implemented, and how it aligns with the overall business vision and strategy1.A clear and consistent change vision can help employees understand the purpose and benefits of the change, as well as their roles and responsibilities in the change process2.A change vision can also help create a sense of urgency, direction, and alignment among employees, as well as foster a culture of empowerment and participation3.

The other options are not sufficient or necessary to successfully empower individuals to drive change. Conducting thorough training programs for all levels of employees is important, but not enough to empower them to drive change.Training can help employees acquire the skills and knowledge needed to perform their tasks in the new situation, but it does not necessarily influence their attitudes, beliefs, or behaviors toward the change1. Aligning performance appraisals with the business's vision is also helpful, but not essential to empower individuals to drive change.Performance appraisals can provide feedback, recognition, and incentives for employees who demonstrate the desired behaviors and outcomes related to the change, but they do not address the underlying motivations, emotions, or barriers that may affect employees' willingness or ability to change4. Establishing and tracking broad change metrics on a quarterly basis is also useful, but not critical to empower individuals to drive change.Change metrics can help measure the progress and impact of the change initiatives, but they do not necessarily engage or involve employees in the change process or give them a sense of ownership or autonomy over the change5.

An advantage of adopting a capacity-leading strategy is that:

A.
there is sufficient capacity to meet demand.
A.
there is sufficient capacity to meet demand.
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B.
there is sufficient demand to consume capacity.
B.
there is sufficient demand to consume capacity.
Answers
C.
all demand is satisfied, and profit is maximized.
C.
all demand is satisfied, and profit is maximized.
Answers
D.
overcapacity problems are minimized.
D.
overcapacity problems are minimized.
Answers
Suggested answer: A

Explanation:

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 is sufficient 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.

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