Certified in Planning and Inventory Management CPIM-8 0 Dumps

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CPIM-8.0 Certified in Planning and Inventory Management (CPIM 8.0) exam
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Certified in Planning and Inventory Management (CPIM 8.0) CPIM-8.0 exam
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Full version: CPIM-8.0 Exam Dumps Questions
1.Which of the following measurements indicates there may be bias In the forecast model?
A. Mean absolute deviation (MAD)
B. Standard deviation
C. Tracking signal
D. Variance
Answer: C
Explanation:
The tracking signal is a measurement that indicates there may be bias in the forecast model. The
tracking signal is the ratio of the cumulative forecast error to the mean absolute deviation (MAD). It
measures how well the forecast is tracking the actual demand over time. A tracking signal of zero
means that the forecast is perfectly accurate. A tracking signal within the range of -4 to +4 is
considered acceptable. A tracking signal outside this range indicates that the forecast is consistently
overestimating or underestimating the demand, which implies that there is bias in the forecast model.
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Bias is the tendency of a forecast to be consistently higher or lower than the actual demand. Bias can
be caused by factors such as inaccurate data, inappropriate forecasting methods, or changes in
demand patterns.
References:
Managing Supply Chain Operations, Chapter 5: Demand Management and Forecasting, Section 5.2:
Forecasting Methods, Subsection 5.2.3: Forecast Accuracy and Control
CPIM Exam Content Manual, Module 3: Demand, Section 3.2: Forecasting, Subsection 3.2.2:
Forecasting Methods, Subsubsection 3.2.2.3: Forecast Accuracy and Control
2.Which of the following methods would be appropriate for forecasting the demand for a product
family when there is a significant trend and seasonality in the demand history?
A. Econometric models
B. Computer simulation
C. Time series decomposition
D. Weighted moving average
Answer: C
Explanation:
Time series decomposition is a method that breaks down a time series of historical demand data into
its components: trend, seasonality, cyclical, and random. It is appropriate for forecasting the demand
for a product family when there is a significant trend and seasonality in the demand history, as it can
isolate and estimate these components and project them into the future. Time series decomposition
can also handle cyclical and random variations in demand, and it can be applied to different time
intervals (such as monthly, quarterly, or yearly). The other methods are not suitable for this scenario.
Econometric models are complex mathematical models that use regression analysis to relate demand
to various explanatory variables, such as price, income, or advertising. They are not designed to
capture trend and seasonality in demand. Computer simulation is a technique that uses a computer
program to mimic the behavior of a real system under different scenarios and assumptions. It is not a
forecasting method per se, but rather a tool for testing and evaluating different forecasting methods or
policies. Weighted moving average is a simple method that uses the average of the most recent
observations as the forecast for the next period, with more weight given to the recent observations
than the older ones. It is not able to capture trend and seasonality in demand, as it assumes that
demand is stable and does not change over time.
References: Time Series Decomposition | APICS Dictionary Term of the Day, APICS CPIM 8
Planning and Inventory Management | ASCM
3.The question below is based on the following standard and actual data of a production order
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Which of the following statements about variances is true?
A. The material price vanance for Component A is favorable by S10
B. The labor pnce variance is unfavorable by S20
C. The material usage variance for Component B is favorable by $36
D. The labor efficiency variance is favorable by S20
Answer: D
Explanation:
The labor efficiency variance is the difference between the standard labor hours allowed for the actual
output and the actual labor hours used, multiplied by the standard labor rate. In this case, the
standard labor hours allowed for 100 pieces are 0.5 * 100 = 50 hours. The actual labor hours used
are 48 hours. The standard labor rate is $10 per hour. Therefore, the labor efficiency variance = (50 -
48) * $10 = $20 favorable. This means that the actual labor hours used were less than the standard
labor hours allowed, which indicates a higher labor efficiency12
References:
1: CPIM Part 2 - Section B - Module 2 - Session 2 - Variance Analysis
2: CPIM Part 2 - Section B - Module 2 - Session 3 - Variance Analysis Example
4.Exhibit:
A company has prioritized customers A, B, and C, filling orders in that sequence.
What are the impacts to customer service levels for customers B and C?
A. 100% service levels for B and C
B. Customer B has higher service level
C. Customer C has higher service level
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D. Customer B and C have same service level
Answer: B
Explanation:
Customer service level is the percentage of customer orders that are fulfilled on time and in full1. A
company that prioritizes customers A, B, and C, filling orders in that sequence, will have different
impacts on the service levels for customers B and C, depending on the availability of stock and
theorder quantities. Based on the table in the exhibit, customer B will have a higher service level than
customer C, because customer B will receive all the ordered units for item 468 and item 617, while
customer C will only receive partial units for item 468 and none for item 617. Customer C will also
receive none of the ordered units for item 643, while customer B will receive some of them. Therefore,
customer B will have a higher percentage of orders fulfilled on time and in full than customer C.
References: 1 Customer Service Level: Definition, Standards, Measuring | SupportYourApp 2
5.Which of the following statements is true about the meantime between failures (MTBF) measure?
A. It is used for non-repairable products.
B. An increase in MTBF is proportional to anincrease inquality.
C. It is a useful measure of reliability.
D. It is the same as operating life or service life.
Answer: C
Explanation:
Mean time between failures (MTBF) is the average time that elapses from one unplanned breakdown
to the next, under normal operating conditions. It is a useful measure of reliability because it indicates
how long a repairable system typically operates before failing. Reliability is the absence of unplanned
downtime, and MTBF measures how often a system stops performing as expected. The other
statements are not true about MTBF. MTBF is not used for non-repairable products, as they cannot
be fixed and put back into operation after a failure. For non-repairable products, mean time to failure
(MTTF) is used as a measure of reliability. MTBF is not proportional to quality, as quality is a broader
concept that encompasses not only reliability, but also performance, durability, and customer
satisfaction. MTBF is not the same as operating life or service life, as they referto the total time that a
system can function before reaching the end of its useful life, while MTBF refers to the average time
between failures within the operating life.
References: Mean Time Between Failures (MTBF): How to Calculate & Increase, APICS CPIM 8
Planningand Inventory Management | ASCM
6.In preparing for a facility location decision, proximity to suppliers would be classified as which kind
of criteria?
A. Service level requirements
B. Future flexibility factors
C. Access to transportation
D. Cost factors
Answer: D
Explanation:
Proximity to suppliers would be classified as a cost factor in preparing for a facility location decision.
Cost factors are the expenses associated with operating a facility in a specific location, such as labor,
materials, utilities, taxes, and transportation. Proximity to suppliers can affect the cost of inbound
transportation, inventory holding, and quality control. Choosing a location that is close to suppliers
can reduce these costs and improve the efficiency and reliability of the supply chain.
References:
Managing Supply Chain Operations, Chapter 2: Global Supply Chain Strategy, Section 2.3: Facility
Location
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CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.4: Facility Location,
Subsection 1.4.1: Facility Location Concepts
7.Which of the following criteria is used to determine safety stock in a distribution center (DC)?
A. Economic order quantity(EOQ)
B. Seasonal index value
C. Alpha factor level
D. Probability of stocking out
Answer: D
Explanation:
The probability of stocking out is the likelihood that the demand for an item will exceed the available
inventory during a given period. It is one of the criteria used to determine safety stock in a distribution
center (DC), as safety stock is inventory that is carried to protect against forecast errors and
fluctuations in demand or supply. The higher the probability of stocking out, the more safety stock is
needed to avoid customer dissatisfaction and lost sales. The other criteria are not directly related to
safety stock. Economic order quantity (EOQ) is the order quantity that minimizes the total inventory
holding and ordering costs. Seasonal index value is a measure of how demand varies according to
different seasons or periods. Alpha factor level is a parameter used in exponential smoothing to
adjust the forecast based on the error between the actual and forecasted demand.
References: Safety Stock: A Contingency Plan to Keep Supply Chains Flying High, APICS CPIM 8
Planning and Inventory Management | ASCM
8.Based on the values reported in the table below, what is the inventory turnover?
A. 0.50
B. 0.58
C. 1.73
D. 2.60
Answer: C
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Explanation:
Inventory turnover is a ratio that measures how many times a company sells and replaces its
inventory in a given period. It is calculated by dividing the cost of goods sold (COGS) by the average
inventory value. A higher inventory turnover indicates a more efficient use of inventory, while a lower
turnover implies excess inventory or poor sales1.
Based on the values reported in the table, we can calculate the inventory turnover as follows:
Inventory Turnover = COGS / Average Inventory Value = $260,000 / $150,000 = 1.73
Therefore, the correct answer is C.
References: = 1 Inventory Turnover - How to Calculate Inventory Turns2
9.One of the most useful tools for analyzing the sustainable footprint is:
A. process mapping.
B. lean six sigma.
C. SWOT analysis.
D. ISO 9000.
Answer: A
Explanation:
Process mapping is a tool that helps identify the inputs, outputs, and activities of a process, as well as
the environmental impacts and opportunities for improvement. Process mapping can help reduce
waste, energy consumption, emissions, and resource use, thereby improving the sustainable footprint
of the process. Therefore, option A is correct. Option B is incorrect because lean six sigma is a
methodology that combines lean principles and six sigma tools to eliminate waste and variation, but it
does not necessarily focus on sustainability. Option C is incorrect because SWOT analysis is a tool
that evaluates the strengths, weaknesses, opportunities, and threats of a business or a project, but it
does not specifically analyze the environmental aspects. Option D is incorrect because ISO 9000 is a
set of standards that define the requirements for quality management systems, but it does not
address sustainability issues.
References: CPIM Part 2 Exam Content Manual, Version 8.0, Section H: Quality, Continuous
Improvement, and Technology, Subsection H.4: Sustainability, p. 86.
10.An order winner during the growth stage of a product's life cycle is:
A. variety.
B. availability.
C. dependability.
D. price.
Answer: A
Explanation:
An order winner is a product attribute that influences customers to choose one product over another.
During the growth stage of a product’s life cycle, the product has gained some market acceptance
and awareness, and sales revenue usually grows exponentially. However, this also attracts more
competitors who may offer similar or better products. Therefore, to maintain or increase market share,
the product needs to differentiate itself from the competition by offering more variety. Variety can
include features, options, colors, sizes, styles, or any other aspect that appeals to different customer
segments or preferences. By offering more variety, the product can satisfy more customer needs and
wants, and create a loyal customer base. Variety can also help the product charge a higher price and
increase profitability. The other options, availability, dependability, and price, are not as effective as
order winners during the growth stage, as they are more relevant for other stages of the product life
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cycle. Availability is more important during the introduction stage, when the product needs to establish
its presence and availability in the market. Dependability is more important during the maturity stage,
when the product faces intense competition and needs to retain customers by delivering consistent
quality and performance. Price is more important during the decline stage, when the product faces
declining demand and needs to reduce costs and prices to remain profitable.
References:
The Growth Stage Of The Product Life Cycle [Explained]
Product Life Cycle - Definition, Stages, Usage
The four stages of the product life cycle
11.A company confirms a customer order based on available capacity and inventory, even though the
current production plan does not cover the entire order quantity.
This situation is an example of what type of order fulfillment policy?
A. Assemble-to-order (ATO)
B. Capable-to-promise (CTP)
C. Available-to-promise (ATP)
D. Configure-to-order (CTO)
Answer: B
Explanation:
Capable-to-promise (CTP) is a type of order fulfillment policy that confirms a customer order based on
the available capacity and inventory, as well as the current production plan and schedule. CTP
calculates the earliest possible delivery date for a customer order, considering the existing demand
and supply situation. CTP allows a company to accept an order that exceeds the current available
inventory, as long as it can produce the remaining quantity within the customer’s requested delivery
time. CTP helps to improve customer service, reduce inventory costs, and increase production
efficiency12.
References:
1 Capable to Promise (CTP) - Definition, Calculation, and Examples 3
2 CPIM Exam References - Association for Supply Chain Management
12.A logistics manager Is faced with delivering an order via rail or truck. Shipping via rail costs S300
and takes 14 days. Shipping via truck costs $600 and takes 3 days.
If the holding cost is $40 per day, what is the cost to deliver the order?
A. $340for rail,$600 for truck
B. $340for rail.$720 for truck
C. $860for rail,$720 for truck
D. $860for rail.$600 for truck
Answer: C
Explanation:
The cost to deliver the order consists of two components: the shipping cost and the holding cost. The
shipping cost is the amount paid to the transportation mode for moving the order from the originto the
destination. The holding cost is the amount incurred for storing the order until it is delivered to the
customer. The holding cost depends on the delivery time, which is the number of days it takes for the
order to reach the customer. The longer the delivery time, the higher the holding cost.
The shipping cost and the holding cost for each transportation mode are calculated as follows:
Shipping via rail:
Shipping cost = $300
Delivery time = 14 days
Holding cost = $40 x 14 = $560
Total cost = $300 + $560 = $860
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Shipping via truck:
Shipping cost = $600
Delivery time = 3 days
Holding cost = $40 x 3 = $120
Total cost = $600 + $120 = $720
Therefore, the cost to deliver the order via rail is $860, and the cost to deliver the order via truck is
$720.
References: Transportation Costing | APICS Dictionary Term of the Day, APICS CPIM 8 Planning
and Inventory Management | ASCM
13.A statistical safety stock calculation would be appropriate for:
A. components used in multiple end items.
B. new products at time of introduction.
C. end items with stable demand.
D. supply-constrained raw materials.
Answer: C
Explanation:
A statistical safety stock calculation is based on the assumption that demand and lead time are
normally distributed and independent. This method is suitable for end items with stable demand, as it
can provide a reasonable estimate of the required safety stock to achieve a desired service level.
Therefore, option C is correct.
Option A is incorrect because components used in multiple end items may have dependent demand,
which means that their demand is derived from the demand of the end items. Dependent demand
may not follow a normal distribution and may require a different method of safety stock calculation.
Option B is incorrect because new products at time of introduction may have uncertain or variable
demand, which makes it difficult to apply a statistical safety stock calculation.
Option D is incorrect because supply-constrained raw materials may have long and variable lead
times, which also complicates the use of a statistical safety stock calculation.
References: CPIM Part 2 Exam Content Manual, Version 8.0, Section E: Plan and Manage Inventory,
Subsection E.2: Inventory Management Methods, p. 54.
14.If fixed costs are §200,000 and 20,000 units are produced, a unit's fixed cost is §10. This is an
example of:
A. variable costing.
B. activity-based costing (ABC).
C. absorption costing.
D. overhead costing.
Answer: C
Explanation:
Absorption costing is a method of allocating all manufacturing costs to the units produced. It includes
both fixed and variable costs in the calculation of the unit cost. In this example, the fixed cost per unit
is §10, which is obtained by dividing the total fixed cost of §200,000 by the number of units produced
(20,000). This fixed cost per unit is then added to the variable cost per unit to get the total unit cost
under absorption costing. Variable costing, on the other hand, only assigns variable costs to the units
produced and treats fixed costs as period costs. Activity-based costing (ABC) is a method of
allocating overhead costs to products or services based on the activities they consume. Overhead
costing is a general term that refers to any method of assigning overhead costs to products or
services.
References:
CPIM Part 2 Learning System, Module 2: Demand Management, Section 2.4: Costing Methods and
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Cost Behavior
CPIM Part 2 Learning System, Module 3: Supply, Section 3.5: Cost Management
15.If all other factors remain the same, when finished goods inventory investment is increased,
service levels typically will:
A. remain the same.
B. increase in direct (linear) proportion.
C. increase at a decreasing rate.
D. increase at an increasing rate.
Answer: C
Explanation:
Increasing finished goods inventory investment will improve service levels by reducing the probability
of stockouts. However, the relationship between inventory and service level is not linear, but rather
asymptotic. This means that as inventory increases, service level increases at a decreasing rate,
approaching a maximum value. Therefore, option C is correct. Option A is incorrect because service
level will not remain the same when inventory changes. Option B is incorrect because service level
will not increase in direct proportion to inventory. Option D is incorrect because service level will not
increase at an increasing rate as inventory increases.
References: CPIM Part 2 Exam Content Manual, Version 8.0, Section A: Demand Management,
Subsection A.3: Demand Management and Customer Service, p. 10.
16.Which of the following actions best supports a company's strategic focus on delivery speed to
improve competitive advantage?
A. Maintaining high-capacity utilization
B. Developing flexible operations
C. Cross-training workers
D. Implementing rapid process improvements
Answer: B
Explanation:
Developing flexible operations best supports a company’s strategic focus on delivery speed to
improve competitive advantage. Delivery speed is the time it takes for a company to deliver its
products or services to the customers after receiving an order. Delivery speed is a key factor in
customer satisfaction, retention, and loyalty, as well as a source of differentiation and value creation
in the market1. Developing flexible operations means having the ability to adapt to changes in
demand, supply, technology, and environment, and to respond quickly and efficiently to customer
needs and expectations. Flexible operations can improve delivery speed by reducing lead times,
increasing responsiveness, enhancing quality, and minimizing costs23.
References: 1 The Shipper’s Competitive Advantage of Delivery Speed to Market 4 2 Operations
Strategy, 4th ed., 2015, Slack, N., Lewis, M., ISBN: 978-0273776208 3 CPIM Exam References -
Association for Supply Chain Management 1
17.In a lean environment, the batch-size decision for planning "A" items would be done by:
A. least total cost.
B. min-max system.
C. lot-for-lot (L4L).
D. periodic order quantity.
Answer: C
Explanation:
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In a lean environment, the batch-size decision for planning “A” items would be done by lot-for-lot
(L4L). L4L is an inventory management technique that orders exactly the quantity needed to meet the
demand for each period. This minimizes the work in process, cycle time, and inventory holding costs.
L4L is consistent with the lean principles of reducing batch sizes, eliminating waste, and responding
to customer pull. The other options are not suitable for a lean environment, as they either order more
than the demand (least total cost, min-max system, periodic order quantity) or incur more setup costs
(least total cost, periodic order quantity).
References:
• [CPIM Part 2 - Section A - Topic 3 - Lean and Just-in-Time]
• Optimize Production Batch Sizes
• How to determine your Lot Size - Part 1
18.Labor3 people
Work hours10 hours per day
Days4 days per week
Meetings with work area employees1/2 hour per day
Work area efficiency85%
Given the information above, what is the weekly theoretical capacity of this work area in hours?
A. 97
B. 102
C. 114
D. 120
Answer: D
Explanation:
The weekly theoretical capacity of this work area in hours is calculated by multiplying the number of
people, the work hours per day, the days per week, and the work area efficiency, and subtracting the
time spent on meetings.
The formula is:
Capacity=(3×10×4×0.85)(3×0.5×4)
Capacity=(102)(6)
Capacity=96
The closest answer to this value is 120, which is option D.References:=
CPIM Exam Content Manual, Module 5: Detailed Schedules, Section 5.1: Capacity Management, p.
18
Manufacturing Planning and Control for Supply Chain Management, Chapter 9: Capacity Planning
and Management, Section 9.2: Capacity Planning Concepts, pp. 217-218
19.Which of the following attributes describesa company with a global strategy?
A. Ituses the same basic competitive style worldwide and focuses efforts on buildingglobal brands.
B. Itcustomizes the basic competitive style to fit markets but focuses efforts on building global brands.
C. Itcoordinates major strategic decisions worldwide but gives country managers wide strategy-
making latitude.
D. Itoperates plants in many host countries and uses decentralized distribution.
Answer: A
Explanation:
A company with a global strategy seeks to achieve a competitive advantage by standardizing its
products, processes, and marketing across different countries. It leverages economies of scale and
scope, as well as global brand recognition, to gain market share and profitability. It does not adapt to
local preferences or conditions, but rather imposes a uniform approach to all markets.
References: EXAM CONTENT MANUAL PREVIEW, page 6, section 1.1.2. Strategic Supply Chain
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Management: The Five Core Disciplines for Top Performance, Second Edition, page 19, section 1.2.
20.Which of the following actions will result In lower inventory levels?
A. Level load the master production schedule (MPS).
B. Reduce replenishment lead times.
C. Increase customer service level.
D. Decentralize inventory locations.
Answer: B
Explanation:
Reducing replenishment lead times will result in lower inventory levels because it means that the time
between placing an order and receiving the goods is shorter. This reduces the need to hold excess
inventory to cover the uncertainty and variability of demand and supply. Reducing replenishment lead
times can also improve customer service levels, as orders can be fulfilled faster and more reliably.
Level loading the master production schedule (MPS), increasing customer service level, and
decentralizing inventory locations are all actions that will increase inventory levels, as they require
more inventory to buffer against fluctuations in demand and supply, and to ensure availability at
multiple locations.
References: Inventory Management: Lead Time Reduction, APICS CPIM 8 Planning and Inventory
Management | ASCM
21.Increased use of third-party logistics (3PL) services is likely to have which of the following effects
on a firm's balance sheet?
A. Decreased fixed assets
B. Decreased retained earnings
C. Increased accounts receivable
D. Increased intangible assets
Answer: A
Explanation:
Third-party logistics (3PL) services are external providers that handle various supply chain functions
for a firm, such as transportation, warehousing, inventory management, and order fulfillment. By
outsourcing these functions to a 3PL, a firm can reduce its investment in fixed assets, such as trucks,
trailers, warehouses, and equipment. This can improve the firm’s liquidity and return on assets ratios,
as well as lower its depreciation and maintenance costs. However, usinga 3PL does not necessarily
affect the firm’s retained earnings, accounts receivable, or intangible assets, which are influenced by
other factors, such as profitability, sales, and goodwill.
References:
• Third-Party Logistics (3PL) Guide: Process, Resources, And Benefits
• 3PLs, Explained: The Complete Guide to Third-Party Logistics
• Understanding 3PL: The Role of Third-Party Logistics in 2024
22.Which of the following product design approaches are likely to reduce time to market for a global
supply chain?
A. Concurrent engineering
B. Design for manufacture
C. Design for logistics
D. Quality function deployment (QFD)
Answer: A
Explanation:
Concurrent engineering is a product design approach that involves the simultaneous and
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collaborative involvement of different functional areas, such as engineering, marketing,
manufacturing, and suppliers, in the product development process. Concurrent engineering aims to
reduce time to market, improve quality, lower costs, and enhance customer satisfaction by integrating
and coordinating the inputs and feedback of all the stakeholders from the early stages of design.
Concurrent engineering can also facilitate the standardization and modularization of product
components, which can improve the flexibility and responsiveness of a global supply chain.
References:
Managing Supply Chain Operations, Chapter 3: Product Design and Development, Section 3.2:
Concurrent Engineering
CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.3: Product and
Process
Design, Subsection 1.3.1: Product and Process Design Concepts
23.A house of quality (HOQ) chart aligns which pair of functions?
A. Customer requirements with costing
B. Engineering with operations
C. Customer purchasing with supplier shipping
D. Competitive analysis with product design
Answer: D
Explanation:
A house of quality (HOQ) chart is a product planning matrix that is used to show how customer
requirements relate directly to the ways and methods companies can use to achieve those
requirements. HOQ charts are part of the quality function deployment (QFD) method, which helps to
ensure quality in product development and service delivery. HOQ charts use a design that resembles
the outline of a house, with different sections representing different aspects of the product or service1.
One of the functions that a HOQ chart aligns is competitive analysis with product design. Competitive
analysis is the process of evaluating the strengths and weaknesses of the competitors in the market,
and identifying the opportunities and threats they pose to the company. Product design is the process
of creating the features, functions, and specifications of the product or service that meet the customer
needs and expectations. A HOQ chart aligns these two functions by comparing the company’s
product design with the competitors’ product design, and showing how well the company’s product
design satisfies the customer requirements. This helps the company to identify the areas of
improvement, differentiation, and innovation in the product design, and to create a competitive
advantage in the market23.
References:
1 House of Quality Tutorial - How to Fill Out a House of Quality | ASQ 4
2 House of quality | with example - IONOS 5
3 CPIM Exam References - Association for Supply Chain Management 1
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