CPIM EXAM PART 1 REVIEW QUESTIONS & ANSWERS GRADED A+
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CPIM EXAM PART 1 REVIEW QUESTIONS & ANSWERS GRADED A+
The most common sequence for processing products in a supply chain is:
A. supplier, manufacturer, customer.
B. manufacturer, customer, supplier.
C. distributor, retailer, supplier.
D. retailer, supplier, manufacturer.
A. supplier, manufa...
CPIM EXAM PART 1 REVIEW QUESTIONS &
ANSWERS GRADED A+
The most common sequence for processing products in a supply chain is:
A. supplier, manufacturer, customer.
B. manufacturer, customer, supplier.
C. distributor, retailer, supplier.
D. retailer, supplier, manufacturer.
A. supplier, manufacturer, customer.
Which of the following terms pertains to the design, planning, execution, control, and monitoring of
supply chain activities with the objective of creating net value, building a competitive infrastructure,
leveraging worldwide logistics, synchronizing supply with demand, and measuring performance
globally?
A. Strategic planning
B. Supplier partnership
C. Supplier relationship management
D. Supply chain management
D. Supply chain management
What is production activity control responsible for?
A. Creating the material requirements plan
B. Purchasing components
C. Running capacity requirements planning
D. Releasing work orders to manufacturing
D. Releasing work orders to manufacturing
Production activity control is the function of routing and dispatching the work to be accomplished
through the production facility.
The day 56 log for a work center shows planned input of 14 hours, actual input of 16 hours, and a
cumulative input variance of -2 hours. For the same day the planned output was 15 hours, the actual
output was 14 hours and the cumulative output variance was -5 hours. The day 55 log showed the
planned backlog was 7 hours and the actual backlog was 6 hours. What is the planned backlog for day
56?
A. 8 hours
B. 6 hours
C. 0 hours
D. -7 hours
B. 6 hours
Planned Backlog = Previous Planned Backlog + Planned Input - Planned Output = 7 hours + 14 hours -
15 hours = 6 hours.
Which financial document shows sources of revenue (sales in cash or as accounts receivable) followed
by various types of expenses incurred throughout the period?
A. General ledger
B. Cash flow statement
C. Income statement
D. Balance statement
C. Income statement
An income statement is a summary of management's performance as reflected in the profitability of
an organization over a certain period. It itemizes the revenues and expenses that led to the current
profit or loss and indicates what may be done to improve the results.
,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.
In a linear sequence of operations A, B, C, D, and E, each operation receives one unit from raw
materials or the prior operation and outputs one unit. Operation A produces 11 units a day, operation
B produces 6 units a day, operation C produces 10 units per day, operation D produces 9 units a day
and operation E, final assembly, produces 8 units a day. Operation E receives inputs from other parts
of the process that do not pass through the constraint and it sends its output to shipping. Demand is
for 8 units a day. Where is the drum?
A. At operation A
B. At operation B
C. Before operation A
D. Before operation B
B. At operation B
The drum is at operation B because the pace of the operation is set to match this constraint rate.
Which correctly identifies the following examples of costs as internal failure (I), external failure (E),
appraisal costs (A), and prevention costs (P)?
A. Scrap = I; product recalls and loss of customers = E; in-line inspections = A; machine maintenance
and operator training = P
B. Product recalls = I; scrap and in-line inspections = E; loss of customers = A; machine maintenance
and operator training = P
C. Operator training= I; product recalls and loss of customers = E; scrap and machine maintenance= A;
in-line inspection = P
D. Machine maintenance and in-line inspections = I; scrap and loss of customers = E; product recalls =
A; operator training = P
A. Scrap = I; product recalls and loss of customers = E; in-line inspections = A; machine maintenance
and operator training = P
Scrap is an internal failure cost because it occurs without the customer seeing it. Product recalls and
loss of customers are external failure costs because the first is directly experienced by customers and
the second is a direct customer reaction to poor quality. In-line inspections are an appraisal cost
because this is an example of a quality control activity. Machine maintenance and operator training
are examples of prevention costs because these are investments designed to reduce the chances of
quality problems occurring in the first place.
In addition to customer orders, the master production schedule (MPS) might handle which of the
following types of demand?
A. Interplant orders
B. Dependent demand
,C. Parts list items
D. Bill-of-material items
A. 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 initially be higher but will eventually be lower as the cost of poor quality goes down.
B. TCO will be lower due to no receiving and inspection without a higher average cost of poor quality.
C. TCO will be higher because the costs of supplier relationship management will more than offset
shorter lead times from such a program.
D. 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.
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.
Given the following, what is the work center backlog?
Average input: 100 units/week
Average output: 100 units/week
Current work in process: 160 units
A. 63 weeks
B. 1 week
C. 1.6 weeks
D. 2.6 weeks
C. 1.6 weeks
To calculate the load that is backlog at a work center, divide the current number of units (or hours)
currently at the work center by the average output, or 160 units/100 units of output per week = 1.6
weeks of load.
A shipment of remote control components is delivered to a factory and immediately taken to a
workstation ready to begin assembly. What is the name of this inventory management technique?
A. Efficient
B. Lot-for-lot
C. Wall-to-wall inventory
D. Lot control
C. Wall-to-wall inventory
In wall-to-wall inventory management, materials enter a plant and are processed right away, as
opposed to being logged in an inventory store until a later date.
Accountants use the first-in, first-out valuation method for determining the value of inventory on the
financial statements. In a period of rising costs, which will occur in relation to the recorded versus
actual cost of goods sold (COGS)?
A. The recorded COGS will be an average of historical and current prices, so inventory value will be
close but not exact.
INCORRECT
, B. The recorded COGS will be greater than the current COGS, so COGS will be overvalued.
C. The recorded COGS will match the current COGS, so inventory will be fairly stated.
D. The recorded COGS will be less than the current COGS, so COGS will be undervalued.
D. The recorded COGS will be less than the current COGS, so COGS will be undervalued.
The cost of goods made a month ago will be less than for those made today. The inventory
replacement costs of these goods will be higher than their assumed costs were a month ago.
Therefore, the inventory will be undervalued.
Sales and operations planning (S&OP) is typically performed at which of the following levels?
A. Raw material
B. Semi-finished goods
C. Product family
D. End item (finished goods)
C. Product family
S&OP is typically performed at the product family level. End items are typically planned at the master
schedule level, while raw material and semi-finished goods are typically planned at the MRP level.
For the past six months, a manufacturer has experienced monthly forecast deviations of 15, -6, 12, 8, -
18, and -4 units. What is the mean absolute deviation for these months?
A. 1.16
B. 9.33
C. 10.5
D. 11.67
C. 10.5
To calculate the mean absolute deviation, first make each deviation positive and sum these absolute
values: 15 + 6 + 12 + 8 + 18 + 4 = 63 units. Next, divide by the number of periods (6): 63/6 = 10.5.
The economic order quantity (EOQ) for a manufactured part is the quantity at which:
A. the ordering costs are lowest.
B. the replenishment lead time is shortest.
C. the costs of changing capacity are lowest.
D. the ordering and carrying costs are equal.
D. the ordering and carrying costs are equal.
The EOQ is a type of fixed order quantity model intended to minimize the combined costs of acquiring
and carrying inventory. It is based on certain assumptions, including that demand is constant and
known, the item is produced or purchased in batches continuously, order preparation and inventory
carrying costs are constant and known, and replacement occurs all at once. Given these assumptions,
the EOQ occurs when the ordering cost equals the carrying cost.
How should a forecast for snowmobile sales for the coming year be constructed?
A. In the same schedule as production
B. In the same schedule as shipping
C. In the same schedule as customer orders
D. In weeks
C. In the same schedule as customer orders
The forecast should be constructed in the same schedule as that in which sales from customer orders
are expected for the coming year. Note that the forecast will probably need a seasonality component
due to the nature of the product. The production schedule will be influenced by the expected lead
time required to produce the snowmobiles, and it will precede the shipping schedule for the
snowmobiles. The shipping schedule will be influenced by the arrivals from production and the lead
times required to deliver the snowmobiles through the delivery supply chain to finally reach the
customer who placed the order. The schedules throughout the supply chain will be in the time
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