APICS CPIM-8.0 Practice Test - Questions Answers, Page 7

A bill of distribution is the planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer. There may be one or more levels in the disbursement system. It is used to allocate inventory among different distribution centers based on demand, capacity, and costs. A bill of distribution is similar to a bill of materials, but for distribution planning instead of production planning. The other options are not correct, as they refer to different concepts in distribution management:

* A supply chain community is a network of organizations that collaborate to achieve common goals and objectives in the supply chain.

* Interplant demand is the demand for a product or component from one plant to another within the same company.

* Logistics data interchange (LDI) is the electronic exchange of information between logistics partners, such as suppliers, carriers, and customers.

Reference:

* [CPIM Part 2 - Section A - Topic 4 - Distribution Planning]

* Distribution Channel Design

* APICS Flashcards

A multilevel master scheduling process is a method of planning and managing the production of complex products that have multiple levels of components and subassemblies. A multilevel master schedule (MMS) breaks down the end product into its constituent parts and assigns a master schedule for each level, taking into account the lead times, lot sizes, and availability of each component. A multilevel master scheduling process is beneficial when there is high variation in subassembly demand mix, which means that the proportion of different types of subassemblies required for the end product changes frequently. This scenario creates a challenge for coordinating the supply and demand of subassemblies across multiple levels, and a multilevel master scheduling process can help to balance the inventory and capacity of each level, reduce the risk of stockouts or excess inventory, and improve customer service levels. Reference := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 23. CPIM Part 2 Learning System, Version 8.0, Module 2, Section B, Topic 3.

Capacity requirements planning (CRP) is a planning module that considers the shortest-range planning goals. CRP is a process of determining the amount of available capacity and comparing it with the required capacity to execute the planned orders in the master production schedule (MPS) and the material requirements planning (MRP). CRP is usually done at the work center level and for a time horizon of a few weeks or months. CRP helps to identify and resolve capacity issues, such as overloads or underloads, and to adjust the production plan accordingly. CRP is the most detailed and accurate method of capacity planning, as it considers the actual routings, lead times, and lot sizes of the orders. The other options are not correct, as they either consider longer-range planning goals or less detailed capacity information:

* Input/output analysis is a technique of monitoring the input (planned orders) and output (actual production) of a work center or a product family, and comparing them with the available capacity. Input/output analysis is usually done at the aggregate level and for a time horizon of a few months or quarters. Input/output analysis helps to measure the performance of the production plan and to identify and correct deviations from the plan.

* Resource planning is a process of determining the long-range capacity requirements for labor, equipment, facilities, and other resources, based on the sales and operations plan (S&OP). Resource planning is usually done at the aggregate level and for a time horizon of a few years. Resource planning helps to support the strategic decisions and investments related to the resource capacity.

* Rough-cut capacity planning (RCCP) is a process of verifying the feasibility of the master production schedule (MPS) in terms of the available capacity of critical resources, such as key machines or labor skills. RCCP is usually done at the product family level and for a time horizon of a few months or quarters. RCCP helps to validate the MPS and to identify and resolve potential capacity bottlenecks or gaps.

Reference:

* [CPIM Part 2 - Section A - Topic 2 - Capacity Planning]

* Capacity Requirements Planning (CRP)

* Input/Output Control

* Resource Planning

* Rough Cut Capacity Planning (RCCP)

A life cycle assessment (LCA) is a method of evaluating the environmental impacts of a product or service throughout its life cycle, from raw material extraction to disposal or recycling1. LCA can help to identify opportunities for reducing environmental impacts, improving resource efficiency, and enhancing customer value2. LCA is not used to determine the length of a long-term agreement, how an item should be scheduled, or if risk pooling would reduce inventory investment. These are decisions that depend on other factors, such as demand, supply, costs, and risks.

Reference:

* CPIM Part 2 Study Guide, Chapter 2: Supply Chain Strategy, Section 2.3: Sustainability and Corporate Social Responsibility

* ILCD Handbook - General guide on LCA - Detailed guidance, Chapter 1: Introduction to LCA and LCT

A pull system in distribution management is a method of inventory replenishment that is driven by the actual demand of the customers, rather than by forecasts or schedules. In a pull system, each warehouse makes its own replenishment decisions based on the inventory level and the customer orders. A pull system reduces the risk of overstocking or understocking inventory, as it responds to the real-time demand fluctuations. A pull system also improves the efficiency and flexibility of the distribution network, as it eliminates the need for centralized planning and coordination. A pull system is suitable for products that have high demand uncertainty, low holding costs, or short lead times12.

Reference: Push vs. Pull Inventory Management Systems 2023 | Business.org, Push vs. pull: Inventory management for distribution businesses

Level production planning is a strategy that maintains a constant output rate, production rate, or workforce level over the planning horizon. It is suitable for products with stable demand or seasonal demand that can be smoothed by using inventory or backorders. Level production planning can help reduce labor costs, hiring and firing costs, and overtime costs. However, it may also result in high inventory costs or customer dissatisfaction due to long lead times or stockouts. To overcome these drawbacks, the company can investigate subcontracting to meet the extra demand during the peak season. Subcontracting is the process of outsourcing some or all of the production to another firm. It can help the company increase its capacity, flexibility, and responsiveness without investing in additional facilities or equipment. Subcontracting can also reduce the risk of obsolescence or spoilage of seasonal products.

Option B is not appropriate, because chase production planning is a strategy that adjusts the production rate to match the demand rate over the planning horizon. It is suitable for products with highly variable or uncertain demand that cannot be smoothed by using inventory or backorders. Chase production planning can help minimize inventory costs and avoid overproduction or underproduction. However, it may also result in high labor costs, hiring and firing costs, and overtime costs. Moreover, it may limit the company's ability to capture the market share and satisfy the customer demand during the high demand season.

Option C is not appropriate, because hybrid production planning is a strategy that combines the features of level production planning and chase production planning. It is suitable for products with moderate variability or uncertainty in demand that can be partially smoothed by using inventory or backorders. Hybrid production planning can help balance the trade-offs between inventory costs and labor costs. However, it may also increase the complexity and difficulty of coordinating the production and demand plans. Moreover, it may not address the company's financial constraints or capacity limitations.

Option D is not appropriate, because reducing the size of the customer base during the high demand season is a risky and counterproductive move. It may result in losing loyal customers, damaging the company's reputation, and forfeiting potential profits. It may also create an opportunity for competitors to gain market share and customer loyalty.

* Sales and Operations Planning: An Overview

* Sales and Operations Planning: Strategies and Techniques

* Sales and Operations Planning: Best Practices

Pareto analysis is a technique for separating input factors with the greatest impact on an outcome and prioritizing them based on their scores. It is based on the 80-20 rule, which states that 80% of a project's benefit or problems can be achieved by doing 20% of the work or fixing 20% of the causes. Pareto analysis helps to identify the top portion of causes that need to be addressed to resolve the majority of problems.Pareto Analysis - Overview, Limitations, Pareto DiagramReference:Pareto analysis - Wikipedia,What Is Pareto Analysis? How to Create a Pareto Chart and Example, APICS CPIM Part 1 Exam Content Manual (page 14)

The total landed cost is the sum of all the costs associated with buying a quantity larger than immediately needed, including the cost of the product, the custom fees, the freight, and the warehouse rent. Based on the table, the total landed cost can be calculated as follows:

Landed cost = material cost + custom fees + freight + warehouse rent Landed cost = $500 + $125 + $700 + $200 Landed cost = $1,525

Therefore, the correct answer is D. $1,525. The other options are not correct, as they either omit some of the costs or use incorrect values. The total landed cost reflects the direct costs only to move the product from the factory floor to the customer.It is an important supply chain KPI in inventory management, as it helps to determine the optimal order quantity, pricing, and profitability of the products12.Reference:

What is Landed Cost? | Calculation and Tips to Improve - ORBA Cloud CFO

What is Landed Cost & Why is it Important | Finale Inventory

Creating short-term wins is a useful element in the change process because it helps to build momentum, motivate the team, and overcome resistance. Short-term wins are concrete achievements that demonstrate the benefits of the change and provide evidence that the efforts are paying off. They also help to create a sense of urgency and alignment among the stakeholders involved in the change process. Calculating a break-even point, performing a SWOT analysis, and developing key performance indicators (KPIs) are all important tools for planning and evaluating the change process, but they are not as effective as creating short-term wins in generating support and commitment for the change.Reference:Change Management: The Kotter Model,APICS CPIM 8 Planning and Inventory Management | ASCM