Which of the following types of operational strategies typically would result in the lowest inventory
cost
A.
Mixed-model
B.
Level
C.
Chase
D.
Hybrid
Correct Answer: C
Explanation:
A chase operational strategy is one that adjusts production to match the demand pattern. This means
that the inventory level is kept low, as the output is synchronized with the demand. This reduces the
inventory cost, as there is less need for holding, ordering, and carrying inventory. A chase strategy
also minimizes the risk of obsolescence, spoilage, or excess inventory.
A level operational strategy is one that maintains a constant output rate, production rate, or
workforce level. This means that the inventory level fluctuates, as the output may not match the
demand. This increases the inventory cost, as there is more need for holding, ordering, and carrying
inventory. A level strategy also increases the risk of stockouts, overstocking, or waste.
A mixed-model operational strategy is one that produces several products with the same resources.
This means that the inventory level varies, as the output depends on the product mix and the
demand. This may increase or decrease the inventory cost, depending on the product characteristics,
demand variability, and resource utilization. A mixed-model strategy also requires more flexibility
and coordination in production planning and scheduling.
A hybrid operational strategy is one that combines elements of chase and level strategies. This
means that the inventory level is balanced, as the output is partly adjusted to the demand and partly
kept constant. This may increase or decrease the inventory cost, depending on the degree of
adjustment and constancy. A hybrid strategy also requires more trade-offs and compromises in
production decision making.
Reference:
APICS Exam Handbook, page 12
CPIM Part 1 Study Guide, page 19
CPIM Part 2 Study Guide, page 17
Question #2 (Topic: demo questions)
An organization has seen inventory increase every month for the past year and financial performance
has net met expectations. Which of the following processes would most appropriately address
correcting the problem?
A.
Business planning
B.
Sales and operations planning (S&OP)
C.
Detailed material planning
D.
Master scheduling
Correct Answer: B
Explanation:
Sales and operations planning (S&OP) is a process that aligns the sales plan, the production plan, the
inventory plan, and the financial plan to achieve the business objectives. S&OP helps to balance
supply and demand, optimize resources, reduce inventory costs, and improve customer service.
S&OP is done on an aggregate or family level, and covers a sufficient span of time to make sure that
the necessary resources will be available. S&OP also involves regular reviews and updates of the
plans based on the changes in the market and the company’s performance.
Business planning is a process that defines the long-term vision, mission, goals, and strategies of the
organization. Business planning provides the direction and framework for the operational plans, but
does not address the specific issues of inventory management and financial performance.
Detailed material planning is a process that determines the quantity and timing of material
requirements for each item or component in the production plan. Detailed material planning is
based on the master schedule, which is derived from the S&OP. Detailed material planning does not
address the alignment of sales and operations at an aggregate level.
Master scheduling is a process that translates the S&OP into a detailed plan for each product or
service in a specific time period. Master scheduling specifies the quantity and timing of finished
goods to be produced or delivered to meet the demand. Master scheduling is dependent on the
S&OP, and does not address the coordination of sales and operations at an aggregate level.
Reference:
APICS Exam Handbook, page 12
CPIM Part 1 Study Guide, page 19
CPIM Part 2 Study Guide, page 17
Question #3 (Topic: demo questions)
Ergonomic workstation design should incorporate:
A.
an andon board.
B.
reduction of repetitive motion.
C.
bending so as to reduce monotony of work.
D.
visual systems.
Correct Answer: D
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. Reference: 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.
Question #4 (Topic: demo questions)
An online retailer moves from delivering hard copy books to offering digital downloads only. This
action may result in an increased possibility of:
A.
supply delays.
B.
forecast inaccuracy.
C.
supply disruptions.
D.
loss of intellectual property.
Correct Answer: D
Explanation:
Offering digital downloads only may result in an increased possibility of loss of intellectual property,
as this exposes the online retailer to the risk of cyber theft and piracy. Digital downloads are easier to
copy, distribute, and modify without authorization than hard copy books, and the online retailer may
lose control over its IP rights and revenues. Cyber thieves may hack into the online retailer’s network
and steal its IP assets, such as the content, design, and format of the books. Pirates may also offer
illegal copies of the books to consumers at lower prices or for free, undermining the online retailer’s
market share and profitability. According to Deloitte Insights, IP cyber thef t has largely remained in
the shadows compared with more familiar cybercrimes such as the thef t of credit card, consumer
health, and other personally identifiable information1. However, IP cyber thef t can have serious
consequences for a company’s future, as IP is the heart of the 21st-century company, an essential
motor driving innovation, competitiveness, and the growth of businesses and the economy as a
whole1. The WIPO Magazine also notes that digital technology has made IP thef t easier, as Bad
Actors use technology to flood the online market with pirated and counterfeit goods2. The impact of
IP thef t on the economy can be significant, as it can result in loss of legitimate sales, reduced tax
revenues, lower employment opportunities, and diminished incentives for innovation3. Therefore,
an online retailer that moves from delivering hard copy books to offering digital downloads only
should take appropriate measures to protect its IP from cyber theft and piracy. This may include
using encryption, digital rights management, watermarking, authentication, and monitoring
technologies, as well as educating consumers about the value and benefits of legal downloads