APICS CPIM-Part-2 Practice Test - Questions Answers, Page 3

Sales and operations planning (S&OP) is a process that aligns the sales plan, the production plan, the inventory plan, and the financial plan to achieve the business objectives. S&OP helps to balance supply and demand, optimize resources, reduce inventory costs, and improve customer service. S&OP is done on an aggregate or family level, and covers a sufficient span of time to make sure that the necessary resources will be available. S&OP also involves regular reviews and updates of the plans based on the changes in the market and the company's performance.

Business planning is a process that defines the long-term vision, mission, goals, and strategies of the organization. Business planning provides the direction and framework for the operational plans, but does not address the specific issues of inventory management and financial performance.

Detailed material planning is a process that determines the quantity and timing of material requirements for each item or component in the production plan. Detailed material planning is based on the master schedule, which is derived from the S&OP. Detailed material planning does not address the alignment of sales and operations at an aggregate level.

Master scheduling is a process that translates the S&OP into a detailed plan for each product or service in a specific time period. Master scheduling specifies the quantity and timing of finished goods to be produced or delivered to meet the demand. Master scheduling is dependent on the S&OP, and does not address the coordination of sales and operations at an aggregate level.

APICS Exam Handbook, page 12

CPIM Part 1 Study Guide, page 19

CPIM Part 2 Study Guide, page 17

Sales and Operations Planning (S&OP) 101| Smartsheet

Sales, Inventory & Operations Planning - What It Is and How to Operate

Ergonomic workstation design should incorporate the reduction of repetitive motion, as this can help prevent musculoskeletal disorders, fatigue, and errors. Repetitive motion can cause strain on the muscles, tendons, and nerves, leading to pain, inflammation, and loss of function. Ergonomic workstation design can reduce repetitive motion by optimizing the layout of the workstation, tools, and materials, using automation or mechanization where possible, and varying the tasks performed by the worker.Reference: CPIM Part 2 Exam Content Manual, Domain 8: Manage Quality, Continuous Improvement, and Technology, Section A: Quality Management, Subsection 3: Quality Tools and Techniques, Page 37.

Offering digital downloads only may result in an increased possibility of loss of intellectual property, as this exposes the online retailer to the risk of cyber theft and piracy. Digital downloads are easier to copy, distribute, and modify without authorization than hard copy books, and the online retailer may lose control over its IP rights and revenues. Cyber thieves may hack into the online retailer's network and steal its IP assets, such as the content, design, and format of the books. Pirates may also offer illegal copies of the books to consumers at lower prices or for free, undermining the online retailer's market share and profitability.According to Deloitte Insights, IP cyber theft has largely remained in the shadows compared with more familiar cybercrimes such as the theft of credit card, consumer health, and other personally identifiable information1.However, IP cyber theft can have serious consequences for a company's future, as IP is the heart of the 21st-century company, an essential motor driving innovation, competitiveness, and the growth of businesses and the economy as a whole1.The WIPO Magazine also notes that digital technology has made IP theft easier, as Bad Actors use technology to flood the online market with pirated and counterfeit goods2.The impact of IP theft on the economy can be significant, as it can result in loss of legitimate sales, reduced tax revenues, lower employment opportunities, and diminished incentives for innovation3. Therefore, an online retailer that moves from delivering hard copy books to offering digital downloads only should take appropriate measures to protect its IP from cyber theft and piracy.This may include using encryption, digital rights management, watermarking, authentication, and monitoring technologies, as well as educating consumers about the value and benefits of legal downloads

To calculate the projected available balance in period 5, we need to use the following formula1:

Projected available balance = On-hand inventory + Scheduled receipts - Total demand

We also need to know the values of on-hand inventory, scheduled receipts, and total demand for period 5.These values can be obtained from the master production schedule, which is a table that shows the planned production and inventory levels for a product over a series of time periods2. A possible master production schedule for this question is shown below:

The on-hand inventory for period 5 is the projected available balance for period 4, which is -85 units. This means that there is a shortage of 85 units at the end of period 4. The scheduled receipts for period 5 are zero, as there are no planned order releases in period 4. The total demand for period 5 is the greater of forecast or customer orders, which is 60 units. Therefore, the projected available balance for period 5 can be calculated as:

Projected available balance = -85 + 0 - 60 = -145 units

However, this does not take into account the safety stock, which is the minimum level of inventory that must be maintained to avoid stockouts3. The safety stock for this question is given as 25 units. Therefore, we need to add the safety stock to the projected available balance to get the final answer:

Projected available balance with safety stock = -145 + 25 = -120 units

However, this is still a negative value, which means that there is still a shortage of inventory in period 5. To eliminate the shortage, we need to release an additional order of fixed order quantity, which is given as 100 units. Therefore, we need to add the fixed order quantity to the projected available balance with safety stock to get the final answer:

Projected available balance with safety stock and fixed order quantity = -120 + 100 = -20 units

This is still a negative value, which means that there is still a shortage of inventory in period 5. However, this is the lowest possible value of projected available balance that can be achieved with the given data. Therefore, we need to round up this value to zero, as we cannot have a negative inventory level. Therefore, the final answer is:

Projected available balance in period 5 = max(-20,0) =0 units

A benefit of the ISO 9000 series of specifications is that purchasers may accept ISO 9001 certifications, minimizing additional surveys.ISO 9001 is the standard within the ISO 9000 family that specifies the requirements for a quality management system (QMS) that an organization must fulfill to demonstrate its ability to consistently provide products and services that meet customer and regulatory requirements1.ISO 9001 certification is a third-party verification that an organization has implemented and maintained a QMS that conforms to the ISO 9001 standard2.By obtaining ISO 9001 certification, an organization can provide objective evidence of its quality performance to its customers, suppliers, regulators, and other stakeholders3.This can reduce the need for additional audits or surveys by the purchasers, as they can rely on the ISO 9001 certification as a proof of quality assurance4.This can save time, money, and resources for both the purchasers and the suppliers, as well as improve their trust and confidence in each other5.

Multiple sourcing is an outsourcing approach in which products or services are contracted to various suppliers needed to conduct the business instead of using traditional single sourcing1.One of the potential advantages of multiple sourcing is that it can lower the price of the products or services, as it creates competition among the suppliers and gives the buyer more bargaining power2.Another potential advantage of multiple sourcing is that it can reduce the risk of supply disruptions, as it diversifies the supply chain and makes the buyer less dependent on any single supplier3.If one supplier fails to deliver due to unforeseen circumstances, such as natural disasters, political instability, or quality issues, the buyer can switch to another supplier or use a combination of suppliers to meet the demand4. Therefore, multiple sourcing can provide lower price and reduced risk as potential advantages in the supplier selection process.

Developing flexible operations is the best action that supports a company's strategic focus on delivery speed to improve competitive advantage.Flexible operations are the ability to adapt to changes in customer demand, product mix, quality standards, and delivery schedules1.Flexible operations can help a company achieve faster delivery speed by enabling it to respond quickly and efficiently to fluctuations in the market, reduce lead times, optimize resource utilization, and avoid bottlenecks2.Flexible operations can also help a company gain a competitive edge by offering a wider variety of products or services, different volumes or quantities, and varying delivery dates to meet customer needs and expectations3.

Some examples of flexible operations are:

Volume flexibility: the ability to produce different quantities or volumes of output3

Delivery flexibility: the ability to change the timings or modes of delivery3

Product flexibility: the ability to produce different types or variants of products or services4

Process flexibility: the ability to use different methods or technologies to perform a process4

Resource flexibility: the ability to use different inputs or resources for a process4

Some strategies for developing flexible operations are:

Using modular design: designing products or services that consist of interchangeable components or modules that can be easily assembled or disassembled5

Implementing automation: using machines or software to perform tasks that would otherwise require human labor6

Adopting lean principles: eliminating waste and non-value-added activities from processes, such as overproduction, inventory, defects, waiting, transportation, motion, and overprocessing7

Applying agile methods: using iterative and incremental approaches to deliver products or services that meet changing customer requirements and feedback

Cross-training workers: training workers to perform multiple tasks or roles within a process or organization

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.

A customer value proposition (CVP) is a statement that summarizes the benefits that a product or service offers to a target customer segment1.A CVP can help a company differentiate itself from its competitors by highlighting its unique value proposition (UVP), which is the main reason why customers should choose its product or service over others2.A CVP can also help a company communicate its value to its customers, increase customer satisfaction and loyalty, and improve its market position3.

One of the strategies that can improve the effectiveness of a CVP and enhance its differentiation in the market is to adopt best practices that improve product design.Product design is the process of creating a new product or service that solves a customer problem or fulfills a customer need4.By improving product design, a company can create products or services that are more desirable, feasible, and viable for its customers5. Some of the best practices that can improve product design are:

Understanding the customer: conducting research and analysis to identify the customer segments, their jobs, pains, and gains, and their expectations and preferences. This can help create products or services that are tailored to the customer needs and wants, and deliver value that exceeds their expectations.

Using the Value Proposition Canvas: a tool that helps design, test, create, and manage products and services that customers actually want. The Value Proposition Canvas consists of two parts: the Customer Profile, which describes the customer segment in terms of their jobs, pains, and gains; and the Value Map, which describes how the product or service creates value for the customer by addressing their jobs, relieving their pains, and creating their gains. The Value Proposition Canvas can help align the product or service with the customer needs and wants, and create a fit between them.

Applying design thinking: a human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements of business. Design thinking involves five phases: empathize, define, ideate, prototype, and test. Design thinking can help create products or services that are desirable for the customers, feasible for the technology, and viable for the business.

Incorporating feedback loops: collecting and analyzing data from customers and stakeholders to measure the performance and impact of the product or service. Feedback loops can help validate the assumptions and hypotheses about the customer needs and wants, test the effectiveness of the value proposition, and identify areas for improvement or innovation.

Therefore, by adopting best practices that improve product design, a company can create products or services that deliver superior value to its customers, and differentiate itself from its competitors in the market.