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CPIM Part 1

Certified in Production and Inventory Management v.8 Part 1 (ASCM)


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Question: 546


of the following forecasting methods would be least suitable for a product that has a highly demand pattern, and why?


usal forecasting, which can incorporate external variables. me series analysis, as it requires a stable pattern for accuracy. gmental forecasting, which relies on expert opinions.

ponential smoothing, as it adapts to recent changes effectively.


er: B


nation: Time series analysis is least suitable for products with erratic demand patterns, as it orical data trends, which are not present in erratic demand situations.


ion: 547


company opts to prioritize delivery speed, what type of operational investments would bes this focus without significantly increasing costs?


eamlining logistics and supply chain processes for efficiency. esting heavily in premium raw materials.

reasing workforce size to handle more orders. panding product lines to attract new customers.

Which erratic


  1. Ca

  2. Ti

  3. Jud

  4. Ex


Answ


Expla relies

on hist


Quest


When a t

support


  1. Str

  2. Inv

  3. Inc

  4. Ex


Answer: A


Explanation: Streamlining logistics and supply chain processes is the best operational investment for supporting a focus on delivery speed while managing costs effectively.


Question: 548

A company has historically experienced a 10% increase in demand each year. If the current year's forecasted demand is 1,000 units, what will the forecast be for the following year?


A. 900

B. 1,200

C. 1,150

D. 1,100


Answer: D


st_next_year = Current_forecast × (1 + Percentage_increase) st_next_year = 1,000 × (1 + 0.10) = 1,000 × 1.10 = 1,100.


ion: 549


anufacturing environment, a manager is reviewing the demand for a product over the next m tal quantity required is identified as gross requirements. To determine how much of this de tually be fulfilled, which calculation must the manager perform?


culate net requirements

safety stock to gross requirements ust for scheduled receipts

btract current on-hand inventory from gross requirements


er: A


nation: Net requirements are calculated by adjusting gross requirements for on-hand invento uled receipts to determine the actual amount needed to meet demand.


ion: 550

Explanation: The forecast for the next year is calculated as: Foreca

Foreca


Quest


In a m onth.

The to mand

can ac


  1. Cal

  2. Add

  3. Adj

  4. Su


Answ


Expla ry and

sched


Quest


Which of the following is a common challenge that distributors face when managing inventory in a dynamic market environment?


  1. Maintaining high fill rates

  2. Reducing costs associated with warehousing

  3. Increasing supplier lead times

  4. Predicting changes in customer preferences

Answer: D


Explanation: Predicting changes in customer preferences is challenging for distributors as market dynamics can shift rapidly, impacting inventory management and product offerings.


Question: 551


ng strategies would best enable it to maintain service levels?


ying solely on overtime to meet peak demand intaining a fixed workforce year-round

veloping flexible capacity options through subcontracting ducing production during off-peak periods


er: C


nation: Developing flexible capacity options through subcontracting allows the company to duction capabilities in response to seasonal fluctuations while maintaining service levels.


ion: 552


hance delivery performance, organizations often adopt specific metrics. Which of the followi are most critical for monitoring and improving delivery effectiveness? (Select All That Ap


cle time from order to delivery of inventory obsolescence

centage of orders shipped on time

erage customer complaint resolution time


er: A, C

In a scenario where a company faces fluctuating seasonal demand, which of the following capacity planni


  1. Rel

  2. Ma

  3. De

  4. Re


Answ


Expla adjust

its pro


Quest


To en ng

metrics ply)


  1. Cy

  2. Rate

  3. Per

  4. Av


Answ


Explanation: Cycle time directly measures delivery speed, while the on-time shipping percentage quantifies reliability. While obsolescence and complaint resolution are important, they are indirect measures of delivery performance.


Question: 553


In a supply chain context, what does the term "bullwhip effect" refer to, and why is it a significant concern for companies aiming to align operations with business goals?

  1. The relationship between inventory levels and customer satisfaction

  2. The effect of global competition on local supply chains

  3. The impact of technology on supply chain efficiency

  4. The tendency for demand fluctuations to increase as one moves up the supply chain


Answer: D



ion: 554


ealm of production and inventory management, which of the following measures can be em ance delivery performance while ensuring customer satisfaction? (Select All That Apply)


ducing production run sizes to increase responsiveness esting in automated warehousing systems

plementing strict penalties for late deliveries nitoring customer satisfaction metrics continuously


er: A, B, D


nation: Reducing run sizes increases responsiveness to demand changes, automated systems ce efficiency and accuracy in order fulfillment, and continuous monitoring of satisfaction me

that customer needs are met effectively.


ion: 555


rganization experiencing high variability in customer demand, the supply chain manager is eveloping a strategy to improve responsiveness. Which approach is most effective in manag mand variability?

Explanation: The bullwhip effect results in amplified demand fluctuations, which can lead to inefficiencies and misalignment with business goals.


Quest


In the r ployed

to enh


  1. Re

  2. Inv

  3. Im

  4. Mo

Answ Expla

enhan trics

ensures


Quest


In an o tasked

with d ing

this de


  1. Implementing a Just-In-Time (JIT) strategy

  2. Increasing safety stock levels across the board

  3. Using a hybrid strategy that combines forecasting and responsive supply

  4. Relying solely on historical data for future demand


Answer: C


Explanation: A hybrid strategy allows for flexibility and responsiveness by balancing forecasts with real-time data, thus effectively managing demand variability.


In a scenario where a customer orders a product that is currently out of stock, which supply chain component is responsible for determining the best course of action to fulfill the order?


  1. Supplier

  2. Distributor

    nufacturer


    er: C


    nation: The customer service team is responsible for determining how to fulfill customer or ing options like backordering, suggesting alternative products, or expediting production.


    ion: 557


    of the following statements about safety stock in inventory management is true, particularly to demand variability and service level requirements?


    ety stock is unnecessary if demand is steady and predictable.

    ety stock levels should be decreased as service level requirements increase.

    ety stock can serve as a buffer against demand variability and lead time fluctuations. ety stock levels are fixed and should not change over time.


    er: C


    nation: Safety stock acts as a buffer against demand variability and lead time fluctuations, h ntain service levels during uncertain conditions.

    Customer service team

  3. Ma


Answ


Expla ders,

includ


Quest


Which in

relation


  1. Saf

  2. Saf

  3. Saf

  4. Saf


Answ


Expla elping

to mai


Question: 558


A company is planning to introduce a new product line and is updating its MRP system. What key input must be defined to ensure accurate planning?


  1. Bill of Materials (BOM) for the new product

  2. Supplier lead times for materials

  3. Historical sales data for similar products

  4. Employee availability


Answer: A


Explanation: The Bill of Materials (BOM) for the new product is crucial for determining material requirements and planning production.



pply chain environment, what is the key advantage of utilizing technology for real-time data among suppliers, manufacturers, and distributors?


reased complexity in data management

her costs associated with technology implementation hanced visibility leading to quicker decision-making duced need for communication between parties


er: C


nation: Real-time data sharing enhances visibility across the supply chain, enabling quicker nformed decision-making, which can improve overall efficiency and responsiveness.


ion: 560


pany’s average lead time is 5 weeks, and it anticipates a weekly demand of 120 units. If the ny desires a service level of 98%, what is the safety stock if the standard deviation of deman lead time is 25 units?


units

Question: 559


In a su sharing


  1. Inc

  2. Hig

  3. En

  4. Re


Answ


Expla and

more i


Quest


A com

compa d

during


  1. 651

  2. 455 units

  3. 320 units

  4. 390 units


Answer: A


Explanation: For a 98% service level, the z-score is approximately 2.06. Safety_stock = Z × Standard_deviation_demand = 2.06 × 25 = 51.5 units.

Total_lead_time_demand = 120 × 5 = 600 units, total inventory = 600 + 51.5 = 651.5 units.


A company has a total annual demand of 12,000 units and an average lead time of 4 weeks. If the company operates 52 weeks a year, what is the average weekly demand?


  1. 250 units

  2. 230 units

    units


    er: B


    nation: Average_weekly_demand = Total_annual_demand / Number_of_weeks = 12,000 / 52 ximately 230.77 units, rounded to 300 units.


    ion: 562


    mpany is looking to streamline its supply chain by minimizing the number of suppliers, whi lowing risks might they face?


    reased flexibility in sourcing materials hanced innovation through collaboration duced negotiation power with suppliers

    gher dependency on fewer suppliers leading to potential disruptions


    er: D


    nation: Reducing the number of suppliers increases dependency on those remaining, which can vulnerabilities if any of those suppliers face disruptions.

    300 units

  3. 400


Answ


Expla =

appro


Quest


If a co ch of

the fol


  1. Inc

  2. En

  3. Re

  4. Hi

Answ Expla

lead to


Question: 563


In an effort to enhance capacity control, a manager decides to implement a new scheduling software. What should be the primary consideration when selecting this software?


  1. The cost of the software compared to competitors

  2. The recommendations from other departments

  3. The number of features available regardless of relevance

  4. The ability of the software to integrate with existing systems


Answer: D


Explanation: The ability of the scheduling software to integrate with existing systems is crucial for ensuring seamless operations and maximizing the effectiveness of capacity control efforts.



of the following statements regarding the impact of lead times on customer order fulfillment te, particularly in the context of just-in-time (JIT) inventory practices?


nger lead times are preferable in JIT systems to ensure product availability.

practices require minimizing lead times to enhance responsiveness to customer demands. d times have no significant effect on JIT inventory strategies.

eliminates the need for lead time management.


er: B


nation: JIT practices emphasize minimizing lead times to enhance responsiveness to custom ds, ensuring that products are available when needed without excessive inventory.


ion: 565


pany is planning to launch a new product and needs to develop an accurate demand forecast combination of methods should they use to maximize forecast reliability for this new produ


ely quantitative methods

alitative methods paired with market research

Question: 564


Which is

accura


  1. Lo

  2. JIT

  3. Lea

  4. JIT


Answ


Expla er

deman


Quest


A com .

Which ct?


  1. Sol

  2. Qu

  3. A combination of qualitative and quantitative forecasting methods

  4. Historical sales data from similar products


Answer: C


Explanation: A combination of qualitative and quantitative forecasting methods leverages historical data and expert insights, maximizing reliability in forecasting demand for new products.