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Question 1

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Work Center 1 has an available capacity of 1,200 hours per month. Which of the following amounts represents the cumulative difference between the required capacity and the available capacity of Mont

Question 2

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A customer requests an order of 100 units in Period 1. The master schedule for the item indicates an available-to-promise (ATP) of 85 units for Period 1. Which of the following approaches is the mo

Question 3

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Which of the following factors typically would distort a sales forecast that is based solely on shipment history?

Question 4

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A vendor-managed inventory (\VMI) program provides a benefit to the buying company in which of the following ways?

Question 5

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What is the purpose of a buffer in the theory of constraints (TOC)?

Question 6

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Which of the following tools is used for monitoring a capacity plan?

Question 7

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The primary consideration in maintenance, repair, and operating (MRO) supply systems typically is:

Question 8

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A factory work center has the following work orders. What is the load on this work center?

Question 9

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The horizon for forecasts that are input to the sales and operations planning (S&O0P) process should be long enough that:

Question 10

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Rivalry among competing sellers is generally weaker when:

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Related questions

In an assemble-to-order (ATO) environment, option overplanning is used to:

Providing a realistic basis for setting internal performance targets can be accomplished through:

In which of the following environments is capable-to-promise (CTP) more appropriate than available-to-promise (ATP)?

Fixed order quantity = 100 units Lead time = 2 weeks Safety stock = 25 units What is the projected available balance in period 5?

When designing a production cell, which of the following items would be the most important consideration?

What is the main negative effect of changing the due dates of open orders?

Product X sells for $20 each, and it has a variable cost of $5 per unit. The company sells 10,000 units per year and has a fixed cost of $120,000. What is the break-even point in units for Product X?

Sales and operations planning (S&0P) in a make-to-stock (MTS) environment is concerned with projecting:

Collaborative planning, forecasting, and replenishment (CPFR) typically would be most effective for a:

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

Question 16 - CPIM-Part-2 discussion

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An advantage of applying ABC classification to a firm's replenishment items is that:

A.

it distinguishes independent demand from dependent demand.

B.

it allows planners to focus on critical products.

C.

it provides better order quantities than the economic order quantity (EOQ]).

D.

it allows the firm to utilize time-phased order point (TPOP).

Suggested answer: B

Explanation:

ABC classification is an inventory categorization technique that divides items into three classes based on their usage value, which is the product of the number of units sold and the cost per unit. Class A items have the highest usage value and account for a large proportion of the total inventory value, but a small percentage of the number of items. Class B items have a moderate usage value and account for a moderate proportion of the total inventory value and the number of items.Class C items have the lowest usage value and account for a small proportion of the total inventory value, but a large percentage of the number of items1.

An advantage of applying ABC classification to a firm's replenishment items is that it allows planners to focus on critical products. Replenishment items are items that are regularly ordered or produced to maintain a certain level of inventory. By using ABC classification, planners can prioritize the replenishment of class A items, which have the highest impact on the firm's profitability and customer satisfaction.Planners can also apply different inventory management techniques and policies for each class of items, such as more frequent reviews, tighter controls, lower safety stocks, and higher service levels for class A items, and less frequent reviews, simpler controls, higher safety stocks, and lower service levels for class C items234. This way, ABC classification can help planners optimize the replenishment process and reduce costs, waste, and stockouts.

The other options are not advantages of applying ABC classification to a firm's replenishment items, because they are either irrelevant or incorrect.ABC classification does not distinguish independent demand from dependent demand, which are two types of demand that depend on whether the item is sold to customers or used as a component in another item5.ABC classification does not provide better order quantities than the economic order quantity (EOQ), which is a formula that calculates the optimal order quantity that minimizes the total inventory costs6.ABC classification does not allow the firm to utilize time-phased order point (TPOP), which is a method that determines when to place an order based on the projected inventory position and the lead time7.

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asked 16/09/2024

Hamid Assimi

38 questions

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Your answer: A B C D

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