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NEW QUESTION # 49
What is a result of effective production activity control (PAC)?
- A. Less scrap and rework on the shop floor
- B. Fewer machine hours are required for production
- C. Available capacity is increased
- D. Actual input/output matches planned input/output
Answer: D
Explanation:
Explanation
Production activity control (PAC) is the function of managing the flow of materials and work-in-progress in a manufacturing system. PAC is responsible for executing the master production schedule and the material requirements plan, as well as for planning, implementing, and monitoring the production activities. PAC aims to ensure that the required resources are available, that the production orders are released and completed on time, and that the quality and quantity standards are met. A result of effective PAC is that the actual input/output matches the planned input/output. This means that the actual amount and timing of materials, labor, and machines used for production are consistent with the planned amount and timing. This indicates that the production process is efficient, reliable, and synchronized with the demand. This also helps to reduce inventory, lead time, and waste.
The other options are not necessarily results of effective PAC. Less scrap and rework on the shop floor may be a result of effective quality control, which is a separate function from PAC. Quality control is concerned with inspecting and testing the products or services to ensure that they meet the specifications and standards. Fewer machine hours are required for production may be a result of effective process improvement, which is a separate function from PAC. Process improvement is concerned with analyzing and enhancing the production methods and techniques to increase productivity and performance. Available capacity is increased may be a result of effective capacity planning, which is a separate function from PAC. Capacity planning is concerned with determining and adjusting the optimal level of resources needed to meet the demand. References
Production Activity Control - Tutorial; Production Control: Process, Types and Best Practices - ProjectManager; Production control - Wikipedia.
NEW QUESTION # 50
The demonstrated capacity of equipment in a process flow is $1,200 per day. Due to a malfunction in a feeder line, utilization of the equipment is reduced by 25% on Day 6. If the efficiency remains unchanged at 110%, what would the output be on Day 6?
- A. $900
- B. $300
- C. $990
- D. $330
Answer: C
Explanation:
Explanation
The output of the equipment on Day 6 can be calculated by multiplying the demonstrated capacity, the utilization, and the efficiency. The demonstrated capacity is given as $1,200 per day. The utilization is the ratio of the actual time that the equipment is used to the available time that it could be used. Since the utilization is reduced by 25% on Day 6, it means that the equipment is used for 75% of the available time.
Therefore, the utilization is 0.75. The efficiency is the ratio of the actual output to the standard output. It is given as 110%, which means that the equipment produces 10% more than the standard output. Therefore, the efficiency is 1.1. The output on Day 6 can be found by multiplying these three factors:
Output = Demonstrated capacity x Utilization x Efficiency Output = $1,200 x 0.75 x 1.1 Output = $990 Therefore, the output on Day 6 is $990. References: CPIM Part 2 Exam Content Manual, Version 7.0, Domain
6: Plan, Manage, and Execute Detailed Schedules, Section A: Detailed Capacity Planning and Scheduling, Subsection 2: Capacity Management Concepts and Calculations, p. 37-38.
NEW QUESTION # 51
Work Center 1 has an available capacity of 1,200 hours per month. Which of the following amounts represents thecumulative differencebetweenthe required capacity and the available capacity of Months 1 through 37
- A. 1,250
- B. 0
- C. 3,750
- D. 1
Answer: B
Explanation:
Explanation
To find the cumulative difference between the required capacity and the available capacity of Months 1 through 37, we need to sum up the differences for each month. The difference for each month is calculated by subtracting the available capacity from the required capacity. The availablecapacity of Work Center 1 is given as 1,200 hours per month, while the required capacity for each month is given in the table below:
The difference for each month is then:
The cumulative difference is the sum of all the differences:
-200 -100 +0 +100 +200 +300 +400 + ... +1,700 = 150
NEW QUESTION # 52
Fishbone diagrams would help a service organization determine:
- A. the proper level of service for a customer segment.
- B. the source of aquality-of-serviceissue.
- C. differences in the performance of employees.
- D. the decomposition of customer return rates with seasonality.
Answer: B
Explanation:
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. References: 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.
NEW QUESTION # 53
Locating service facilities differs from locating manufacturing or distribution facilities primarily because service locationdecisions are:
- A. driven by competition, while manufacturing and distribution location decisions are not.
- B. driven by real estate costs, while manufacturing and distribution location decisions are driven by productcosts.
- C. driven by revenue concerns, while manufacturing and distribution location decisions are driven by costs.
- D. determined after surveying customers, while manufacturing and distribution location decisions are determined after surveying suppliers.
Answer: C
Explanation:
Explanation
Locating service facilities differs from locating manufacturing or distribution facilities primarily because service location decisions are driven by revenue concerns, while manufacturing and distribution location decisions are driven by costs. This is because service facilities are usually closer to the customers and depend on their demand and preferences. Service facilities need to consider factors such as customer convenience, accessibility, visibility, traffic, and competition when choosing a location, as these factors affect the revenue potential and market share of the service facility1. Manufacturing and distribution facilities, on the other hand, are usually farther from the customers and depend on their supply chain efficiency and effectiveness. Manufacturing and distribution facilities need to consider factors such as transportation, labor, utilities, taxes, and regulations when choosing a location, as these factors affect the cost structure and profitability of the facility2.
The other options are not correct. Competition is a factor that affects both service and manufacturing or distribution location decisions, as it influences the market attractiveness and strategic positioning of the facility3. Real estate costs are also a factor that affects both service and manufacturing or distribution location decisions, as they represent a significant portion of the fixed costs of the facility4. Surveying customers or suppliers is a method that can be used for both service and manufacturing or distribution location decisions, as it provides valuable information about the demand and supply characteristics of the market5.
References : Service Facility Location: A Review of Applications and Methods; Facility Location - Factors Influencing the Location; Competitive Environment: Definition, Examples & Factors - StudySmarter US; Facility Location | IntechOpen; Seven Key Factors to a Facility Location - Chron.com.
NEW QUESTION # 54
What priority control technique is most appropriate for a firm using a cellular production system?
- A. Push production activity control (PAC)
- B. Pull production activity control (PAC)
- C. Distribution requirements planning (DRP)
- D. Shortest processing time (SPT) rule
Answer: B
Explanation:
Explanation
A priority control technique is a method of determining the sequence and timing of production orders in a manufacturing system. A priority control technique can be either push or pull, depending on whether the production orders are initiated by the upstream or downstream processes. A cellular production system is a process of manufacturing that organizes the machines and workers into self-contained cells that can produce different products efficiently and flexibly. A cellular production system is usually based on the principles of lean manufacturing and group technology, which aim to eliminate waste and improve quality.
A pull production activity control (PAC) is a priority control technique that is most appropriate for a firm using a cellular production system. A pull PAC is a method of controlling the flow of materials and work-in-progress in a manufacturing system by using signals from the downstream processes to trigger the release of production orders from the upstream processes. A pull PAC helps to reduce inventory, lead time, and overproduction, as well as to synchronize the production with the customer demand. A pull PAC can be implemented using various techniques, such as kanban cards, containers, or electronic signals.
A shortest processing time (SPT) rule is a priority control technique that assigns the highest priority to the production order that has the shortest processing time at each workstation. An SPT rule helps to minimize the average waiting time and flow time of the production orders, as well as to increase the utilization of the machines and workers. However, an SPT rule does not consider the due dates or the customer demand of the production orders, and may result in poor customer service or low delivery performance.
A distribution requirements planning (DRP) is a priority control technique that determines the quantity and timing of finished goods to be delivered to various distribution centers or customers. A DRP is based on the forecasted demand, the inventory status, and the transportation lead time of the finished goods. A DRP helps to optimize the inventory level, reduce stockouts, and improve customer service. However, a DRP is not suitable for a cellular production system, as it does not control the flow of materials and work-in-progress within the manufacturing system.
A push production activity control (PAC) is a priority control technique that initiates the production orders based on the master production schedule or the forecasted demand from the upstream processes. A push PAC releases the production orders in batches or lots, regardless of the capacity or status of the downstream processes. A push PAC may result in high inventory, long lead time, and overproduction, as well as low flexibility and responsiveness to customer demand. A push PAC is not compatible with a cellular production system, as it contradicts the principles of lean manufacturing and group technology. References: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.1: Detailed Scheduling Concepts, p. 36; Cellular manufacturing; [Production Activity Control].
NEW QUESTION # 55
An example of a cradle-to-cradle sustainability model would be:
- A. a coffee shop collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier.
- B. A a laundry service collects dirty baby clothes from families; cleans the clothes inlarge, efficient batches;and thensorts and delivers the clothes back to each family.
- C. a bank offers the lowest interest rates on loans to firms that are committed to using recycled materials andimplementing zero-waste initiatives in their processes.
- D. a company uses wood that has been gathered from multiple sources to construct items, such as beds andtoys for babies and young children.
Answer: A
Explanation:
Explanation
A cradle-to-cradle sustainability model is a design approach that seeks to reuse all materials and components and eliminate waste. It is based on the concept of circular economy, which aims to keep materials in use for as long as possible and regenerate natural systems12. A cradle-to-cradle sustainability model follows the principle of a potentially infinite circular economy, where all products are designed to be either biodegradable or recyclable3.
An example of a cradle-to-cradle sustainability model would be a coffee shop that collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier. This example shows how the coffee shop closes theloop of the paper material cycle, by reusing the paper waste as an input for new paper products. This way, the coffee shop reduces its environmental impact, saves resources, and supports the circular economy.
The other options are not examples of a cradle-to-cradle sustainability model, because they do not reuse all materials and components and eliminate waste. A laundry service that collects dirty baby clothes from families, cleans them in large, efficient batches, and then sorts and delivers them back to each family is an example of a service-based business model, which reduces the need for owning products and extends their lifespan, but does not necessarily reuse or recycle the materials4. A company that uses wood that has been gathered from multiple sources to construct items, such as beds and toys for babies and young children is an example of a product-based business model, which may use renewable or recycled materials, but does not guarantee that the products are biodegradable or recyclable5. A bank that offers the lowest interest rates on loans to firms that are committed to using recycled materials and implementing zero-waste initiatives in their processes is an example of a financial incentive scheme, which encourages sustainable practices, but does not directly reuse or recycle materials6.
NEW QUESTION # 56
When developing a quantitative model to support sales and operations planning (S&OP), which of the following statementsis most true?
- A. Aggregation will be necessary to develop an appropriate model.
- B. Clear objectives are not necessary to begin the modeling process.
- C. It is necessary to capture all of the detail in order to create a useful model.
- D. A minimal level of effort is required to develop a model.
Answer: A
Explanation:
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 is not necessary 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 be necessary to 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 are necessary to 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.
A significant level 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.
References: CPIM Part 2 Exam Content Manual, Domain 3: Plan and Manage Demand, Section 3.1: Demand Management Concepts and Tools, p. 27-28; Quantitative Techniques Used in Sales & Operations Planning; Sales and Operations Planning (S&OP) 101| Smartsheet; Chapter 13 - Aggregate Planning - KSU; What is Sales and Operations Planning (S&OP) | Oracle; Aggregation and Disaggregation | SAP Help Portal.
NEW QUESTION # 57
Which of the following techniques would be most appropriate to use to develop a forecast?
- A. Moving average
- B. Exponentialsmoothing
- C. Delphi method
- D. Time series decomposition
Answer: B
Explanation:
Explanation
Exponential smoothing is a forecasting technique that uses a weighted average of past and present data to predict future values. It is suitable for time series data that have a stable or slowly changing trend and no significant seasonal variations. Exponential smoothing assigns more weight to the most recent data, giving it a higher influence on the forecast. This makes it more responsive to changes in demand patterns than other techniques, such as moving average or time series decomposition, which use fixed weights or historical data.
The Delphi method is a qualitative technique that involves a panel of experts who provide their opinions and feedback on a topic through multiple rounds of surveys. It is not based on historical data or mathematical formulas, but rather on human judgment and consensus. Therefore, it is not appropriate for developing a forecast. References: CPIM Part 2 Exam Content Manual, Version 7.0, Domain 3: Plan and Manage Demand, Section A: Demand Management, Subsection 2: Forecasting Techniques and Methods, p. 14-15.
NEW QUESTION # 58
The production plan relates to a firm's financial planning because it is used to:
- A. project payroll costs.
- B. identify future cash needs.
- C. determine variable costs.
- D. calculate standard product costs.
Answer: B
Explanation:
Explanation
The production plan is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The production plan is the output of the supply planning step in the sales and operations planning (S&OP) process. The production plan relates to a firm's financial planning because it is used to identify future cash needs. Cash needs are the amount of money that a firm requires to operate and grow its business. Cash needs can be influenced by various factors, such as sales revenue, cost of goods sold, operating expenses, capital expenditures, inventory levels, accounts receivable, accounts payable, and taxes. The production plan can help to estimate the cash inflows and outflows associated with these factors, and to determine the optimal balance between them. The production plan can also help to identify the potential sources and uses of cash, such as borrowing, investing, or paying dividends. By identifying future cash needs, the production plan can help to improve the firm's liquidity, profitability, and solvency.
References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1:
Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).
NEW QUESTION # 59
Which of the following approaches is most effective in communicating operational performance?
- A. Quality performance measures
- B. Reviewing conformance to schedule
- C. Visual control boards at several locations
- D. Monthly meetings with employees
Answer: C
Explanation:
Explanation
Visual control boards are tools that display the key performance indicators (KPIs) and metrics of a production system in a graphical and easy-to-understand format. Visual control boards are usually located at several locations within the production facility, such as the work centers, the shop floor, or the management office.
Visual control boards help to communicate operational performance by providing real-time and relevant information, enabling quick feedback and corrective actions, and promoting transparency and accountability.
The other options are not the most effective approaches in communicating operational performance. Quality performance measures are indicators that evaluate the degree to which the products or services meet or exceed the specifications and standards. Quality performance measures are important for communicating operational performance, but they are not sufficient, as they do not cover other aspects of performance, such as cost, time, or customer satisfaction. Reviewing conformance to schedule is a method of comparing the actual production output with the planned production output, based on the master production schedule or the material requirements plan. Reviewing conformance to schedule is useful for communicating operational performance, but it is not timely, as it is usually done after the production is completed, and it does not provide enough details or explanations for the deviations or variances. Monthly meetings with employees are events that involve discussing and reviewing the operational performance with the staff members who are involved in the production process. Monthly meetings with employees are beneficial for communicating operational performance, but they are not frequent, as they are only held once a month, and they may not be effective, as they may lack participation or engagement from the employees.
NEW QUESTION # 60
Which of the following tools shows process changes and random variation over time?
- A. Control chart
- B. Pareto analysis
- C. Histogram
- D. Check sheet
Answer: A
Explanation:
Explanation
A control chart is a tool that shows process changes and random variation over time. A control chart is a graph that plots data points over time and shows the mean and the upper and lower control limits of the process. The mean is the average value of the data, and the control limits are the boundaries of the normal variation of the process. A control chart can help monitor the stability and performance of a process by detecting any unusual or non-random patterns in the data, such as trends, cycles, or shifts. A control chart can also help identify the sources of variation in the process, whether they are common causes (inherent to the process) or special causes (external factors). A control chart can be used for both variable data (measured on a continuous scale) and attribute data (counted or categorized).
A check sheet is a tool that collects and summarizes data in a structured way. A check sheet is a simple form that records the frequency or occurrence of specific events or problems during a process. A check sheet can help organize and analyze data by showing patterns, trends, or relationships among the data. A check sheet can also help identify potential causes of problems or areas for improvement.
A histogram is a tool that displays the distribution of data in a graphical way. A histogram is a type of bar chart that shows how many times each value or range of values occurs in a data set. A histogram can help describe and compare data by showing the shape, center, spread, and variation of the distribution. A histogram can also help identify outliers, gaps, or clusters in the data.
A Pareto analysis is a tool that prioritizes problems or causes based on their frequency or impact. A Pareto analysis is based on the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. A Pareto analysis uses a combination of a bar chart and a line graph to show the relative importance of different factors in a process. The bars represent the frequency ormagnitude of each factor, and the line represents the cumulative percentage of the total effect. A Pareto analysis can help focus on the most significant problems or causes and allocate resources accordingly.
References := Control Chart - Statistical Process Control Charts | ASQ, A Guide to Control Charts - iSixSigma, 2 Tools to Understand Variation in Your Improvement Journey, Understanding variation | Turas | Learn
NEW QUESTION # 61
The cost accountant has discovered a consistent overage in actual run time for one operation. This informationshould besent first to the:
- A. product manager to increase the selling price of the product.
- B. quality manager to add a new quality measurement to the operation.
- C. production supervisor to review and explain the overage.
- D. the engineering manager to evaluate the run time for the routing.
Answer: D
Explanation:
Explanation
The information about the consistent overage in actual run time for one operation should be sent first to the engineering manager to evaluate the run time for the routing. A routing is a document that specifies the sequence of operations and work centers required to produce a product or feature. A run time is the amount of time needed to perform an operation or a task at a work center. An overage in actual run time means that the actual time spent on an operation or a task is more than the planned or standard time. This can result in lower efficiency, productivity, or quality, as well as higher costs, waste, or delays.
The engineering manager is responsible for designing and maintaining the routing and the run time for each operation or task. The engineering manager can evaluate the run time for the routing by comparing the actual and planned times, identifying the causes of the overage, and taking corrective actions. For example, the engineering manager may:
Review the accuracy and validity of the planned or standard time, and update it if necessary.
Analyze the performance and capability of the machines, equipment, or labor involved in the operation or task, and improve them if needed.
Investigate the presence of any errors, defects, rework, or variability in the operation or task, and eliminate them if possible.
Implement lean production techniques, such as value stream mapping, waste reduction, or continuous improvement, to optimize the operation or task.
The other options are not appropriate for sending the information about the consistent overage in actual run time for one operation first. The product manager is not responsible for designing or maintaining the routing or the run time for each operation or task. The product manager is responsible for managing and marketing the product or feature, such as defining its specifications, features, price, or promotion. Increasing the selling price of the product is not a solution for addressing the overage in actual run time, as it may reduce customer demand or satisfaction, as well as increase competition. The quality manager is not responsible for designing or maintaining the routing or the run time for each operation or task. The quality manager is responsible for ensuring and improving the quality of the product or feature, such as setting quality standards, implementing quality control methods, or conducting quality audits. Adding a new qualitymeasurement to the operation is not a solution for addressing the overage in actual run time, as it may increase complexity or cost without improving efficiency or productivity. The production supervisor is not responsible for designing or maintaining the routing or the run time for each operation or task. The production supervisor is responsible for overseeing and coordinating the production activities at a work center, such as scheduling operations, assigning resources, monitoring performance, or resolving issues. Reviewing and explaining the overage in actual run time is not a solution for addressing it, as it does not identify or eliminate its causes.
References := [Routing - an overview | ScienceDirect Topics], [Run Time - an overview | ScienceDirect Topics], [Engineering Manager Job Description - Betterteam], [Product Manager Job Description - Betterteam], [Quality Manager Job Description - Betterteam], [Production Supervisor Job Description - Betterteam]
NEW QUESTION # 62
When procuring for innovative products, the focus should be on:
- A. lead times.
- B. total landed cost.
- C. unit cost.
- D. lot sizes.
Answer: B
Explanation:
Explanation
When procuring for innovative products, the focus should be on the total landed cost, which is the sum of all costs associated with making and delivering products to the point where they are used. This includes not only the unit cost, but also the transportation, handling, inventory, taxes, duties, and other fees associated with the procurement process. By focusing on the total landed cost, procurement can evaluate the true value of innovative products and compare them with alternative solutions. Focusing on unit cost alone may overlook the potential benefits of innovation, such as improved quality, performance, or sustainability. Lead times and lot sizes are also important factors to consider, but they are not the main focus when procuring for innovation. References : CPIM Part 2 Exam Content Manual, Domain 4: Plan and Manage Supply, Section A:
Supply Management Concepts and Approaches, Subsection 2: Procurement Strategies and Techniques, Page
17.
NEW QUESTION # 63
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.
- B. Work centers signal previous work centers when they are ready for more work.
- C. Work centers operate using decentralized control.
- D. Work centers are scheduled using finite capacity planning.
Answer: A
Explanation:
Explanation
Apush 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.
References: Push System vs. Pull System: Adopting A Hybrid Approach To MRP; Push Systems vs. Pull System: Definitions and Differences; JUST-IN-TIME MANUFACTURING | SpringerLink; 9 Just-In-Time and Lean Systems - Seneca College.
NEW QUESTION # 64
When deciding what to report externally regarding sustainability performance, a company should disclose:
- A. results of acceptable performance.
- B. past results and future strategies.
- C. results of poor performance.
- D. why current regulations are too costly.
Answer: B
Explanation:
Explanation
When deciding what to report externally regarding sustainability performance, a company should disclose its past results and future strategies. This will help the company to demonstrate its progress, achievements, challenges, and commitments in relation to its environmental, social, and governance (ESG) goals. Disclosing past results and future strategies will also enhance the company's transparency, accountability, and credibility with its stakeholders, such as investors, customers, employees, regulators, and the public.
Disclosing results of poor performance or acceptable performance alone is not sufficient, as it does not provide a complete picture of the company's sustainability performance. Moreover, disclosing only poor performance may damage the company's reputation and trust, while disclosing onlyacceptable performance may raise doubts about the company's honesty and reliability. Disclosing why current regulations are too costly is irrelevant and inappropriate, as it does not reflect the company's sustainability performance or efforts. It may also imply that the company is not willing or able to comply with the regulations or improve its sustainability practices.
References : A Comprehensive Guide on How to Write a Sustainability Report; Designing Your Company's Sustainability Report; What to Include in a Sustainability Report.
NEW QUESTION # 65
Which of the following factors is considered a carrying cost?
- A. Scrap rate
- B. Setup
- C. Transportation
- D. Obsolescence
Answer: D
Explanation:
Explanation
Obsolescence is the loss of value or usefulness of an item due to changes in technology, fashion, customer preferences, or other factors. Obsolescence is considered a carrying cost, because it is an expense associated with holding inventory over a period of time1. Carrying costs are the various costs a business pays for holding inventory in stock, such as warehousing, insurance, taxes, depreciation, and opportunity costs2. Obsolescence can increase the carrying costs of inventory,because it can reduce the demand and sales potential of the item, and may require the item to be written off or sold at a lower price3.
The other options are not considered carrying costs, because they are not related to holding inventory in stock.
Setup is the cost of preparing a machine or a process for production. Transportation is the cost of moving goods from one place to another. Scrap rate is the percentage of defective or unusable units produced in a process. These costs are more related to production or distribution activities than inventory holding activities.
NEW QUESTION # 66
Ergonomic workstation design should incorporate:
- A. reduction of repetitive motion.
- B. an andon board.
- C. visual systems.
- D. bending so as to reduce monotony of work.
Answer: A
Explanation:
Explanation
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. References: 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.
NEW QUESTION # 67
In the design and development of a manufacturing process, process engineers wouldmost likely be responsible fordecisions relating to:
- A. production capacity.
- B. routing sequences.
- C. lead times.
- D. product reliability.
Answer: B
NEW QUESTION # 68
Shop backlogs remain constant when:
- A. forecasts are updated on the basis of the longest lead time item.
- B. capacity is assumed to be infinite.
- C. shop orders are released at a steady rate.
- D. work input equals work output,
Answer: D
Explanation:
Explanation
Shop backlogs are the amount of work that has been ordered but not yet completed by a production facility1. Shop backlogs remain constant when the work input, which is the rate of incoming orders, equals the work output, which is the rate of finished products2. This means that the production facility is able to match the demand and supply of its products, and maintain a steady level of backlog. This can indicate that the production facility is operating efficiently and effectively, and has a stable market position.
The other options are not correct. Forecasts are updated on the basis of the longest lead time item means that the production facility uses the item that takes the longest time to produce as a reference for planning its future production3. This may help the production facility to avoid underestimating its capacity or overcommitting its resources, but it does not guarantee that the shop backlogs will remain constant, as it depends on the actual demand and supply of its products. Capacity is assumed to be infinite means that the production facility does not consider anylimitations or constraints on its ability to produce its products. This may help the production facility to simplify its production planning and scheduling, but it does not reflect the reality of its operations, and may lead to unrealistic expectations or poor performance. Shop orders are released at a steady rate means that the production facility releases a fixed number of orders to its shop floor at regular intervals. This may help the production facility to smooth out its production flow and reduce variability, but it does not ensure that the shop backlogs will remain constant, as it depends on the actual work input and output.
References : Backlog Definition, Implications, and Real-World Examples - Investopedia; Production Planning
- an overview | ScienceDirect Topics; [Production Planning: Definition & Types | Study.com]; [Production Planning: Definition & Types | Study.com]; What is a Sprint Backlog? Create With Examples [2023] * Asana.
NEW QUESTION # 69
The horizon for forecasts that are input to the sales and operations planning (S&O0P) process should be long enough that:
- A. planned product launches can be incorporated.
- B. supply constraints can be resolved.
- C. cumulative forecast deviation approaches zero.
- D. required resources can be properly planned.
Answer: D
Explanation:
Explanation
The horizon for forecasts that are input to the sales and operations planning (S&OP) process should be long enough that required resources can be properly planned. The S&OP process is a cross-functional process that aligns the demand and supply plans of an organization. The S&OP process consists of several steps, such as data gathering, demand planning, supply planning, pre-S&OP meeting, executive S&OP meeting, and S&OP implementation. The output of the S&OP process is the production plan, which is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The production plan can be stated in different units of measure depending on the type of manufacturing environment, such as hours, units, tons, or dollars. The horizon for forecasts that are input to the S&OP process should be long enough that required resources can be properly planned, meaning that the organization can anticipate and allocate the necessary capacity, materials, labor, equipment, and facilities to meet the expected demand. The horizon for forecasts should also match the lead time for acquiring or changing the resources, as well as the planning cycle for updating the production plan.
References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1:
Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).
NEW QUESTION # 70
Which of the following actions will result in lower inventory levels?
- A. Level load the master production schedule (MPS).
- B. Decentralize inventory locations.
- C. Increase customer service level.
- D. Reduce replenishment lead times.
Answer: D
Explanation:
Explanation
Replenishment lead time is the time between placing an order and receiving the goods1. Reducing replenishment lead time will result in lower inventory levels, as it will allow the company to order less frequently and in smaller quantities, while still meeting customer demand. This will reduce the safety stock, cycle stock, and pipeline stock that the company needs to hold, and thus lower the inventory carrying costs and risks.
The other options will not result in lower inventory levels. Level loading the MPS means producing at a constant rate regardless of demand fluctuations2. This will result in higher inventory levels, as the company will need to build up inventory during periods of low demand and draw down inventory during periods of high demand. Increasing customer service level means improving the ability to meet customer expectations and requirements3. This will also result in higher inventory levels, as the company will need to hold more safety stock to avoid stockouts and ensure high fill rates. Decentralizing inventory locations means distributing inventory across multiple warehouses or facilities4. This will also result in higher inventory levels, as the company will need to maintain more safety stock at each location to account for demand variability and uncertainty.
References : What is Replenishment Lead Time?; Level Loading Definition; Customer Service Level; Centralized vs Decentralized Inventory Management.
NEW QUESTION # 71
Return on investment (ROI) is decreased by which of the following activities?
- A. Increasing cost of sales
- B. Increasing prices
- C. Reducing inventory levels
- D. Increasing sales volume
Answer: A
Explanation:
Explanation
Return on investment (ROI) is a financial ratio that measures the profitability of an investment relative to its cost. ROI is calculated by dividing the net income (or profit) generated by the investment by the total cost of the investment. ROI is decreased by any activity that reduces the net income or increases the cost of the investment. Increasing cost of sales is an activity that decreases ROI because it reduces the net income generated by the sales revenue. Cost of sales (or cost of goods sold) is the direct cost of producing or purchasing the goods or services sold by an organization. Cost of sales includes materials, labor, and overhead costs. Increasing cost of sales means that the organization spends more money to produce or acquire the same amount of goods or services, which lowers its profit margin and ROI.
References: CPIM Exam Content Manual Version 7.0, Domain 8: Manage Quality, Continuous Improvement, and Technology, Section 8.1: Develop Quality and Continuous Improvement Plans, Subsection 8.1.2: Describe how to develop a business case for quality and continuous improvement initiatives (page 74).
NEW QUESTION # 72
An effective process to create meaningful change begins with:
- A. refreshing corporate strategy to align with current marketplace realities for your industry.
- B. identifying and discussing a past crisis, a potential crisis, or major opportunities.
- C. reviewing financial outcomes and metrics over the last 4 quarters year-over-year.
- D. using consultants to provide in-depth analysis of current management opportunities.
Answer: B
Explanation:
Explanation
An effective process to create meaningful change begins with identifying and discussing a past crisis, a potential crisis, or major opportunities. This step is important because it helps to create a sense of urgency and motivation for the change, as well as to clarify the vision and goals of the change1. A past crisis can be used as a learning opportunity to analyze what went wrong and how to prevent it from happening again. A potential crisis can be used as a warning signal to anticipate and prepare for the possible challenges and risks. A major opportunity can be used as a catalyst to seize the competitive advantage and create value for the organization and its stakeholders2.
The other options are not the best ways to start an effective process to create meaningful change. Reviewing financial outcomes and metrics over the last 4 quarters year-over-year may provide some insights into the performance and profitability of the organization, but it may not reveal the underlying causes or drivers of the change, or the future trends and scenarios that may affect the organization3. Refreshing corporate strategy to align with current marketplace realities for your industry may be a necessary step in the change process, but it may not be sufficient to generate buy-in and commitment from the people who are involved in or affected by the change4. Using consultants to provide in-depth analysis of current management opportunities may be a helpful way to obtain external perspectives and expertise, but it may not ensure that the change is aligned with the organization's culture, values, and capabilities5.
References : How To Create A Sense Of Urgency For Change; How To Use Crisis As A Catalyst For Change; Why Financial Metrics Alone Won't Drive Change; How To Align Your Strategy With Your Organization's Culture; How To Choose The Right Consultant For Your Change Project.
NEW QUESTION # 73
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