APICS CSCP Practice Test - Questions Answers, Page 41

To determine the appropriate future load for a work center, it is crucial to use data that best represents the work center's long-term performance. The demonstrated capacity over the last 6 weeks (140 standard hours) provides a more stable and reliable measure because it includes a greater number of periods, reducing the impact of any anomalies or variations that might have occurred in a single week. While the last week's capacity (160 standard hours) reflects recent performance, it may not be representative of the typical output. Averaging the capacities of two different periods (option C) is less accurate than relying on the larger dataset. Therefore, the best number to use is 140 standard hours, as it offers a more consistent and comprehensive view of the work center's capabilities.

Reference: APICS Dictionary; APICS CPIM Exam Content Manual.

In an echelon logistics structure, the flow of products typically proceeds through a series of established arrangements or stages, from the origin to the final destination. This structure involves multiple layers, such as manufacturers, wholesalers, distributors, and retailers, each adding value and passing the product along the chain. This contrasts with direct logistics structures, where products move directly from the producer to the consumer without intermediaries, and combined or indirect structures, which involve a mix of direct and echelon methods.

Reference: APICS Dictionary; APICS CPIM Exam Content Manual.

Cash-to-cash conversion time is a key performance metric that measures the efficiency of a company's cash flow cycle:

Material Acquisition to Sales: It starts from the time cash is spent to acquire raw materials and ends when the company receives payment for the finished goods.

Inventory Management: Efficient inventory management reduces the time materials sit as inventory, speeding up the conversion cycle.

Production Efficiency: Streamlining production processes shortens the time products are manufactured and ready for sale.

Receivables Management: Effective receivables management ensures quick collection of payments, reducing the overall cash-to-cash cycle time.

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2016). Supply Chain Management: A Logistics Perspective. Cengage Learning.

Lambert, D. M., & Cooper, M. C. (2000). Issues in Supply Chain Management. Industrial Marketing Management, 29(1), 65-83.

Implementing Software-as-a-Service (SaaS) offers several benefits, with low installation and upgrade costs being a significant advantage:

Initial Cost Savings: SaaS solutions typically require lower upfront costs compared to traditional on-premise software, as they are subscription-based and hosted by the provider.

Maintenance and Upgrades: SaaS providers handle maintenance and upgrades, reducing the need for in-house IT resources and ensuring the software is always up-to-date with the latest features and security patches.

Scalability: SaaS allows companies to scale their usage and costs according to their needs, avoiding large capital expenditures on hardware and software.

Access and Deployment: SaaS applications can be accessed from anywhere with an internet connection, facilitating easy deployment and remote access for users.

Boillat, T., & Legner, C. (2013). Why do companies migrate towards cloud enterprise systems? A post-implementation perspective. Proceedings of the 21st European Conference on Information Systems (ECIS), Utrecht, Netherlands.

Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J., & Ghalsasi, A. (2011). Cloud computing - The business perspective. Decision Support Systems, 51(1), 176-189.

To handle disputes over damage to goods shipped between two countries, Incoterms (International Commercial Terms) should be applied:

Standardized Terms: Incoterms provide internationally recognized standard terms that define the responsibilities of buyers and sellers in international transactions.

Risk Management: They clarify at which point the risk and responsibility for the goods transfer from the seller to the buyer, helping to resolve disputes regarding damage during transit.

Legal Clarity: Using Incoterms ensures that both parties have a clear understanding of their obligations, reducing the potential for conflicts.

Global Acceptance: Incoterms are widely used and accepted across different countries and legal systems, making them a reliable reference in international trade disputes.

International Chamber of Commerce (2020). Incoterms 2020: ICC rules for the use of domestic and international trade terms. ICC Publication.

Schmitthoff, C. M., & Goode, R. (2007). Schmitthoff's Export Trade: The Law and Practice of International Trade. Sweet & Maxwell.

An adaptive supply chain community strategy involves creating a network of supply chain partners that can quickly adjust and respond to unexpected events or disruptions. This strategy focuses on flexibility, collaboration, and information sharing among all members of the supply chain to ensure rapid and effective responses to rare and unforeseen events. Unlike other strategies like revenue-sharing contracts, global optimization, or continuous replenishment, which are more suited for predictable and routine scenarios, an adaptive supply chain community is specifically designed to handle high-uncertainty situations by leveraging the collective agility and resilience of the network.

Reference: Christopher, M., & Holweg, M. (2011). 'Supply Chain 2.0: Managing supply chains in the era of turbulence.' International Journal of Physical Distribution & Logistics Management.

The ISO 31000 standard provides a set of principles, guidelines, and best practices for risk management that can be applied to any organization, regardless of its size, industry, or sector. It is designed to help organizations identify, assess, and mitigate risks in a systematic and consistent manner. The standard is not intended for certification purposes (option A) but rather for providing a comprehensive framework for managing risk. It can be used to compare risk management practices to some extent (option C) and to inform the creation of industry-specific practices (option D), but its primary purpose is to offer generic guidelines.

Reference: ISO 31000:2018 - Risk management -- Guidelines.

To achieve increased profits, a company must balance inventory investment with order-fill rates. High order-fill rates often require maintaining higher levels of inventory to meet customer demand promptly, which can increase inventory holding costs. Conversely, minimizing inventory investment might lead to stockouts and lower order-fill rates, resulting in lost sales and customer dissatisfaction. Therefore, effective supply chain management involves finding an optimal balance where inventory levels are sufficient to meet demand without incurring excessive costs, thus enhancing profitability. This balance does not directly conflict with plant capacity, sales volume, or lead times as critically as it does with order-fill rates.

Reference: Chopra, S., & Meindl, P. (2016). 'Supply Chain Management: Strategy, Planning, and Operation.'

Supply chain risk management typically addresses four main types of risks: supply risks, demand risks, process risks, and environmental risks. Supply risks pertain to disruptions in the supply of materials or components. Demand risks involve fluctuations or uncertainties in customer demand. Process risks are related to internal operations and processes, such as production or logistics failures. Environmental risks encompass external factors, such as natural disasters, regulatory changes, or economic shifts. These categories help organizations comprehensively identify and manage potential disruptions throughout the supply chain.

Reference: Tang, C. S. (2006). 'Perspectives in supply chain risk management.' International Journal of Production Economics.