cpim

Using ABC classification for cycle counting, A items are counted every week, B items are counted quarterly, and C items are counted annually. There are 2,000 A items, 5,000 B items, and 20,000 C items. How many items are counted each day in total if there are 50 working weeks in the year translating to 250 workdays in the year?

A. 574 units

B. 404 units

C. 395 units

D. 560 units

D. 560 units

To determine the total number of items to count, multiply the number of items by the number of times the item is counted for each class and then sum the results. A items are counted weekly, so this is 50 times per year: 2,000 units × 50 weeks = 100,000 counts. B items are counted quarterly, so this is 4 times per year: 5,000 × 4 = 20,000 counts. C items are counted once, so this is just 20,000 counts. Next, sum the counts: 100,000 counts + 20,000 counts + 20,000 counts = 140,000 counts. Then divide this sum by the number of manufacturing calendar days in the year: 140,000 counts/250 days = 560 counts per day.

With which of the following modes of transportation does the carrier typically have the highest fixed costs?

A. Rail

B. Air

C. Road

D. Water

A. Rail

In contrast to variable costs, fixed costs do not change with the volume of goods carried. Railways have large fixed costs, for example, tracks, terminals, and vehicles.

Senior management agrees to expedite a customer order. After being notified, what should operations managers do first?

A. Ignore the expediting if it is within the demand time fence.

B. Evaluate lateral and downstream operations for impact on schedules and costs.

C. Increase capacity to enable handling the normal schedule plus the increased load.

D. Add the expedited order to the top of the schedule and automatically reschedule everything else.

B. Evaluate lateral and downstream operations for impact on schedules and costs.

After detecting exceptions to plans, operations managers need to follow an exception management process, which includes evaluating lateral and downstream operations for their impact on schedules and costs. Since senior management has approved this expediting, it is not possible to just ignore it. Adding the expedited order to the top of the queue might be done, but it would be a later step after evaluating impact and feasibility.

In addition to customer orders, the master production schedule (MPS) might handle which of the following types of demand?

A. Dependent demand

B. Interplant orders

C. Parts list items

D. Bill-of-material items

B. Interplant orders

Interplant demand is usually handled by the master production scheduling system in a manner similar to customer orders.

An organization implements a dock-to-stock program with a key supplier. How will this impact the total cost of ownership (TCO) if the program is implemented correctly?

A. TCO will not be affected because passing costs on to the supplier cannot improve costs from a total supply chain perspective.

B. TCO will be lower due to no receiving and inspection without a higher average cost of poor quality.

C. TCO will initially be higher but will eventually be lower as the cost of poor quality goes down.

D. TCO will be higher because the costs of supplier relationship management will more than offset shorter lead times from such a program.

B. TCO will be lower due to no receiving and inspection without a higher average cost of poor quality.

The total cost of ownership in supply chain management speaks to the sum of all the costs associated with every activity of the supply stream. In this case, dock-to-stock is a program through which specific quality and packaging requirements are met before the product is released. Prequalified product is shipped directly into the customer's inventory. Dock-to-stock eliminates the costly handling of components, specifically in receiving and inspection, and enables product to move directly into production. If the program is implemented correctly, the costs of poor quality should not increase. Even from a total supply chain perspective, TCO will decrease because only one party is performing these quality steps rather than both parties doing the same task.

What is the best reason for closing the loop between master scheduling and sales and operations planning (S&OP)?

A. One is the plan, and one confirms execution of the plan.

B. One is the plan, and one shows where the plan is valid.

C. One is the plan, and one is the execution of the plan.

D. One is the plan, and one confirms resource availability.

C. One is the plan, and one is the execution of the plan.

S&OP is the plan, and master scheduling identifies how the plan will be executed.

Large-scale productivity software often experiences implementation delays or initially performs below expectations. What mitigation strategy could be used in this situation?

A. Budget for additional time and reduced performance after implementation.

B. Implement it in small pieces while keeping existing systems in place.

C. Keep the old system running in parallel until there is 100% functionality and user acceptance.

D. Hire a third party to implement it.

A. Budget for additional time and reduced performance after implementation.

With productivity software implementations, it is often the case that performance drops below existing and projected levels until the application "works as expected."

Which of the following statements is true of inventory when the final product design is continuously influenced by the customer?

A. Large safety stocks must be maintained.

B. Lot-size inventory increases to the finished goods level.

C. Buffer inventory should be held closer to the raw material stage.

D. Customer influence on the product design should not affect inventory levels.

C. Buffer inventory should be held closer to the raw material stage.

Because the final configured item is often not determined until the actual customer order, leaving materials and components in an unfinished state significantly reduces stocked finished goods. The materials and components are then made- or assembled-to-order based on customer specifications. Increasing the lot-size inventory to the finished goods level will only build inventory as the company waits for a customer order with pre-designed configurations. Large safety stocks further increase the amount of finished goods maintained in inventory. Unless the customer requires only off-the-shelf products, the production and inventory functions must be flexible to build any customer configuration.

Which of the following is a voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anti-corruption?

A. United Nations Police

B. United Nations Global Education First Initiative

C. United Nations Global Compact

D. United Nations Global Initiative to Fight Human Trafficking

C. United Nations Global Compact

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, the environment, and anti-corruption.

Which of the following can be identified and adjusted at the rough-cut capacity planning level?

A. Excessive queues at suppliers

B. Underloads at all work centers

C. Overloads at all work centers

D. Total hours of load in excess of plant capacity

D. Total hours of load in excess of plant capacity

Rough-cut capacity planning provides planners with the ability to easily identify overloads and underloads at key bottlenecks or critical work centers (not all work centers) in the plant.

If a make-to-stock (MTS) company shifts its manufacturing operations to make-to-order (MTO), what will be the effect on annual setup costs and delivery lead time?

A. Annual setup costs will decrease and delivery lead time will decrease.

B. Annual setup costs will decrease and delivery lead time will increase.

C. Annual setup costs will increase and delivery lead time will decrease.

D. Annual setup costs will increase and delivery lead time will increase.

D. Annual setup costs will increase and delivery lead time will increase.

Moving to an MTO environment means that smaller-volume orders will be created. This will increase the overall factory setup costs. Delivery lead times will also increase.

Which of the following objectives often conflicts with providing the best customer service?

A. Building special customer order configurations

B. Creating an extensive and costly distribution system

C. Reducing inventory to keep inventory carrying costs at a minimum

D. Interrupting production runs so a shortage can be manufactured

C. Reducing inventory to keep inventory carrying costs at a minimum

Production's objective of keeping inventory investment to a minimum is in conflict with marketing's objective of always having goods available for the customer. A complex distribution system assists in providing the best customer service and is not in conflict. Disrupting the production schedule for shortage runs decreases manufacturing productivity. Building special customer order configurations decreases production's objectives of making long runs of a small number of standardized products.

When allocated on the basis of historical direct labor hours, overhead will be properly absorbed if:

A. total volume increases.

B. total volume decreases.

C. total volume remains unchanged.

D. fixed costs decrease.

C. total volume remains unchanged.

If production volume remains stable, then the standard overhead that was originally calculated will also remain stable.

What is the primary difference between enterprise resources planning (ERP) and manufacturing resource planning (MRP II)?

A. ERP provides a balance between production, marketing, and information technology.

B. ERP includes manufacturing information only.

C. ERP integrates additional business functions, including human resources, research and development, logistics, and others.

D. ERP is computer-based, but MRP II is no

C. ERP integrates additional business functions, including human resources, research and development, logistics, and others.

ERP provides more than just manufacturing information; it integrates business functions like human resources, research and development, and logistics. MRP II and ERP are both computer-based, and both provide a balance between production, marketing, and information technology.

Which of the following is more characteristic of a general business contract than a customer-supplier partnership?

A. Supplier dedicates a portion of its capacity over a long-term basis to the customer.

B. Distributor provides all of the company's hardware and standard electrical components.

C. Customer establishes a single-source relationship with the supplier for certain products.

D. Customer and supplier perform concurrent engineering on the design of a new product.

B. Distributor provides all of the company's hardware and standard electrical components.

This would be a contractual purchase agreement that does not involve the mutual commitment of a partnership.

Under the group technology concept, which of the following is true?

A. Machines should be grouped to produce parts of similar form.

B. Like machines should be grouped in clusters.

C. Labor is highly specialized.

D. Manufacturing departments should be laid out according to function.

A. Machines should be grouped to produce parts of similar form.

Group technologies seek to group machines to facilitate the production of like products.

Distribution requirements planning (DRP) should directly interface with:

A. master scheduling.

B. purchasing planning.

C. capacity requirements planning.