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NEW QUESTION # 36
The planned channels of Inventory disbursement from one or more sources to field warehouses are known as:
- A. logistics data interchange (LDI).
- B. a supply chain community.
- C. a bill of distribution.
- D. interplant demand.
Answer: C
Explanation:
A bill of distribution is the planned channels of inventory disbursement from one or more sources to field warehouses and ultimately to the customer. There may be one or more levels in the disbursement system. It is used to allocate inventory among different distribution centers based on demand, capacity, and costs. A bill of distribution is similar to a bill of materials, but for distribution planning instead of production planning. The other options are not correct, as they refer to different concepts in distribution management:
*A supply chain community is a network of organizations that collaborate to achieve common goals and objectives in the supply chain.
*Interplant demand is the demand for a product or component from one plant to another within the same company.
*Logistics data interchange (LDI) is the electronic exchange of information between logistics partners, such as suppliers, carriers, and customers. References:
*[CPIM Part 2 - Section A - Topic 4 - Distribution Planning]
*Distribution Channel Design
*APICS Flashcards
NEW QUESTION # 37
Management should support investments in new process technologies that:
- A. provide long-term competitive advantage with acceptable financial risk.
- B. require minimal changes in existing systems, procedures, and skills.
- C. have been recommended by technical experts and equipment suppliers.
- D. provide significant cost-reduction opportunities for the company's current products.
Answer: A
Explanation:
Management should support investments in new process technologies that align with the strategic objectives of the organization and provide a sustainable competitive advantage in the market. New process technologies may involve changes in existing systems, procedures, and skills, but these changes should be justified by the potential benefits and risks of the investment. Therefore, option D is correct. Option A is incorrect because requiring minimal changes in existing systems, procedures, and skills is not a sufficient criterion for investing in new process technologies. Option B is incorrect because relying on the recommendations of technical experts and equipment suppliers may not reflect the best interests of the organization or its customers. Option C is incorrect because providing significant cost-reduction opportunities for the company's current products may not be enough to justify the investment in new process technologies, especially if the products have a short life cycle or low demand. References: CPIM Part 2 Exam Content Manual, Version 8.0, Section H:
Quality, Continuous Improvement, and Technology, Subsection H.3: Technology, p. 85.
NEW QUESTION # 38
What activity is a useful element in the change process?
- A. Performing a SWOT analysis
- B. Developing key performance indicators (KPIs)
- C. Creating short-term wins
- D. Calculating a break-even point
Answer: C
Explanation:
Creating short-term wins is a useful element in the change process because it helps to build momentum, motivate the team, and overcome resistance. Short-term wins are concrete achievements that demonstrate the benefits of the change and provide evidence that the efforts are paying off. They also help to create a sense of urgency and alignment among the stakeholders involved in the change process. Calculating a break-even point, performing a SWOT analysis, and developing key performance indicators (KPIs) are all important tools for planning and evaluating the change process, but they are not as effective as creating short-term wins in generating support and commitment for the change. References: Change Management: The Kotter Model, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 39
An advantage of applying ABC classification to a firm's replenishment items is that:
- A. it distinguishes independent demand from dependent demand.
- B. it allows the firm to utilize time-phased order point (TPOP).
- C. it allows planners to focus on critical products.
- D. it provides better order quantities than the economic order quantity (EOQ).
Answer: C
Explanation:
ABC classification is a method of inventory management that categorizes items based on their annual consumption value, which is the product of the annual demand and the unit cost. Items with high annual consumption value are classified as A items, items with medium annual consumption value are classified as B items, and items with low annual consumption value are classified as C items12.
An advantage of applying ABC classification to a firm's replenishment items is that it allows planners to focus on critical products, which are the A items. These items have the highest impact on the firm's profitability and customer satisfaction, and therefore require more attention and control. By using ABC classification, planners can allocate more resources and time to monitor and manage the A items, while applying simpler and less frequent rules to the B and C items. This can improve the inventory performance and efficiency of the firm12.
The other options are not correct because:
*A. it distinguishes independent demand from dependent demand. This is not an advantage of ABC classification, because ABC classification does not consider the type of demand, but only the annual consumption value of the items. Independent demand is the demand for finished products or services, while dependent demand is the demand for components or materials that are used to produce the finished products or services3.
*C. it provides better order quantities than the economic order quantity (EOQ). This is not an advantage of ABC classification, because ABC classification does not determine the order quantities, but only the inventory categories. EOQ is a formula that calculates the optimal order quantity that minimizes the total inventory costs, such as ordering costs and holding costs.
*D. it allows the firm to utilize time-phased order point (TPOP). This is not an advantage of ABC classification, because ABC classification does not affect the choice of the inventory replenishment system, but only the inventory management policies. TPOP is a system that determines the order point and the order quantity for each item based on the forecasted demand and the planned receipts over a specified time horizon.
References := 1 ABC Inventory Analysis & Management | NetSuite1 2 What Is ABC Inventory Classification?
| Business.org2 3 Independent Demand vs Dependent Demand: What's the Difference? Economic Order Quantity (EOQ) - Overview, Formula, and Example Time-Phased Order Point (TPOP) - an overview | ScienceDirect Topics
NEW QUESTION # 40
Which of the following conditions is most likely to result in planned production that is greater than the total demand over the sales and operations planning (S&OP) horizon for a product family that is made to stock?
- A. An increase in the customer service level is planned for the product family.
- B. Planned ending inventory for the product family is less than the beginning inventory.
- C. New models are being added to the product family.
- D. There is a long-term upward trend in demand for the product family.
Answer: A
Explanation:
Customer service level is the percentage of customer orders that are fulfilled on time and in full1. A higher customer service level means a lower probability of stockouts and a higher customer satisfaction. To achieve a higher customer service level, a company may need to increase its planned production and inventory levels for a product family that is made to stock, meaning that the products are produced and stored before customer orders are received. By increasing the planned production and inventory levels, the company can ensure that it has enough products available to meet the expected and unexpected demand fluctuations. Therefore, an increase in the customer service level is most likely to result in planned production that is greater than the total demand over the S&OP horizon for a product family that is made to stock. Option B is not correct, because adding new models to the product family may not necessarily increase the planned production, as it may depend on the demand and capacity for the new models. Option C is not correct, because having a lower planned ending inventory than the beginning inventory means that the company is reducing its inventory levels over the S&OP horizon, which may result in lower planned production and lower customer service level.
Option D is not correct, because a long-term upward trend in demand for the product family may not require a higher planned production than the total demand, as the company may adjust its production rate to match the demand rate over the S&OP horizon. References: 1 Customer Service Level: Definition, Standards, Measuring
| SupportYourApp 2
NEW QUESTION # 41
A reduction In purchased lot sizes will reduce which of the following items?
- A. Reorder points (ROPs)
- B. Inventory levels
- C. Frequency of orders
- D. Setuptimes
Answer: B
Explanation:
A reduction in purchased lot sizes means ordering smaller quantities of materials more frequently. This reduces the average inventory level and the carrying cost of inventory. However, it also increases the frequency of orders and the ordering cost. The reorder point (ROP) is the level of inventory that triggers a new order, and it depends on the demand rate, the lead time, and the safety stock. The ROP is not affected by the lot size, unless the demand or the lead time changes. The setup time is the time required to prepare a machine or a process for production, and it is not related to the purchased lot size. References: EXAM CONTENT MANUAL PREVIEW, page 14, section 6.1.2. Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, page 433, section 12.4.
NEW QUESTION # 42
One of the most useful tools for analyzing the sustainable footprint is:
- A. SWOT analysis.
- B. process mapping.
- C. ISO 9000.
- D. lean six sigma.
Answer: B
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.
NEW QUESTION # 43
Which of the following production activity control (PAC) techniques focuses on optimizing output?
- A. Critical path management (CPM)
- B. Theory of constraints (TOC) scheduling
- C. Gantt chart
- D. Priority sequencing rules
Answer: B
Explanation:
Theory of constraints (TOC) scheduling is a PAC technique that focuses on optimizing output by identifying and managing the bottleneck or the constraint in the production system. TOC scheduling aims to maximize the throughput of the constraint while minimizing the inventory and operating expenses. Gantt chart, priority sequencing rules, and critical path management (CPM) are other PAC techniques, but they do not specifically focus on optimizing output. Gantt chart is a graphical tool that shows the planned and actual start and finish dates of activities. Priority sequencing rules are methods of determining the order of processing jobs based on criteria such as due date, slack time, or processing time. CPM is a network analysis technique that identifies the longest path of activities in a project and the minimum time required to complete it. References:
APICS CPIM Part 2 Exam Content Manual, p. 29
[APICS CPIM Learning System Version 8.0], Module 4, Section C, p. 4-25
NEW QUESTION # 44
One advantage of adopting a supply network perspective Is that it:
- A. defines the market relationships and partnerships.
- B. protects global markets.
- C. encourages rivals to collaborate.
- D. enhances understanding of competitive and cooperative forces.
Answer: D
Explanation:
One advantage of adopting a supply network perspective is that it enhances understanding of competitive and cooperative forces. A supply network perspective is a holistic view of the supply chain that considers the interdependencies and interactions among the various entities involved in the flow of materials, information, and money. A supply network perspective helps to identify the sources of value creation and capture, the opportunities and threats in the market, and the potential synergies and conflicts among the supply chain partners. A supply network perspective also helps to design and implement effective strategies and tactics to achieve competitive advantage and customer satisfaction. The other statements are not advantages of adopting a supply network perspective. Protecting global markets, defining market relationships and partnerships, and encouraging rivals to collaborate are possible outcomes or objectives of adopting a supply network perspective, but they are not the benefits of the perspective itself. References: Supply Network Perspective | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 45
Based on the above table, calculate the mean absolute deviation (MAD).
- A. 18.75
- B. 0
- C. 6.25
- D. 1
Answer: C
Explanation:
The mean absolute deviation (MAD) is a measure of variability that indicates the average distance between observations and their mean. MAD uses the original units of the data, which simplifies interpretation. Larger values signify that the data points spread out further from the average. Conversely, lower values correspond to data points bunching closer to it. The mean absolute deviation is also known as the mean deviation and average absolute deviation1.
The formula for the mean absolute deviation is the following:
MAD = (|X - X|) / N
Where:
*X = the value of a data point
*X = the mean of the data points
*|X - X| = the absolute deviation of a data point from the mean
*N = the number of data points
* = the summation symbol
Based on the table, we can calculate the MAD as follows:
*X = (80 + 50 + 50 + 75) / 4 = 63.75
*|X - X| = |80 - 63.75|, |50 - 63.75|, |50 - 63.75|, |75 - 63.75| = 16.25, 13.75, 13.75, 11.25
*MAD = (16.25 + 13.75 + 13.75 + 11.25) / 4 = 6.25
Therefore, the correct answer is B.
References := 1 CPIM Part 2 Exam Content Manual, Domain 3: Plan and Manage Demand, Task 3.1:
Develop, validate, and review demand plans, p. 23.
NEW QUESTION # 46
One of the benefits of Integrating a poka-yoke into the production process is that it can be used to:
- A. Improve machine utilization.
- B. enable one-piece flow.
- C. facilitate mixed-model scheduling.
- D. prevent defects.
Answer: D
Explanation:
Poka-yoke is a Japanese term that means "mistake-proofing". It is a lean tool that aims to eliminate errors and defects by designing processes or products in such a way that mistakes are either prevented or detected and corrected immediately. Poka-yoke can be applied in various ways, such as using sensors, guides, checklists, alarms, or color-coding, to ensure that the process or product meets the quality standards and customer expectations. One of the benefits of integrating poka-yoke into the production process is that it can be used to prevent defects, which can result in lower costs, higher customer satisfaction, and improved productivity. By avoiding defects, poka-yoke can also reduce waste, rework, inspection, and warranty claims, as well as enhance safety and reliability. References := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 29. CPIM Part 2 Learning System, Version 8.0, Module 3, Section C, Topic 2.
NEW QUESTION # 47
Which of the following statements correctly describes the relationship between the strategic plan and the business plan?
- A. The strategic plan constrains the business plan.
- B. These are two names for the same plan.
- C. The two plans are the output of a single process.
- D. The two plans are developed independently.
Answer: A
Explanation:
A strategic plan is a document that outlines the long-term vision, goals, and direction of an organization. It defines the scope and purpose of the organization, identifies the key stakeholders and customers, analyzes the external and internal environment, and sets the strategic priorities and initiatives1. A business plan is a document that describes the details of a specific business venture, product, or service. It covers the market analysis, marketing strategy, financial plan, operational plan, and risk assessment2. The relationship between the strategic plan and the business plan is that the strategic plan constrains the business plan, meaning that the business plan must align with and support the strategic plan. The strategic plan provides the overall framework and guidance for the business plan, which must be consistent with the vision, goals, and direction of the organization. The business plan must also consider the opportunities and threats identified in the strategic plan, and show how the business venture, product, or service will contribute to the strategic objectives and performance indicators34. References: 1 Strategic Plan vs. Business Plan: What's the Difference? 4 2 Business Plan Definition - Entrepreneur Small Business Encyclopedia 5 3 Difference between a Business vs Strategic Plan | OnStrategy 6 4 CPIM Exam References - Association for Supply Chain Management 1
NEW QUESTION # 48
A company assembles kits of hand tools after receipt of the order from distributors and uses two-level master scheduling. The appropriate levels of detail for the forecasts that are input to master scheduling would be total number of kits and:
- A. percentage of total for each tool.
- B. specific kit configurations.
- C. raw material requirements.
- D. each unique tool.
Answer: B
Explanation:
A company that uses two-level master scheduling has a master production schedule (MPS) for the end items (kits) and a final assembly schedule (FAS) for the components (tools). The forecasts that are input to master scheduling should reflect the total number of kits and the specific kit configurations, as these determine the demand for the components. The other options are not relevant for master scheduling, as they do not reflect the end item demand or the bill of materials structure. References: EXAM CONTENT MANUAL PREVIEW, page 10, section 4.1.2. Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, page 163, section 6.2.
NEW QUESTION # 49
In a rapidly changing business environment, a primary advantage of an effective customer relationship management (CRM) program is:
- A. earlier Identification of shifts Incustomer preferences.
- B. fewer customer order changes.
- C. reduced forecast variability.
- D. fewer customer defections.
Answer: A
Explanation:
In a rapidly changing business environment, a primary advantage of an effective customer relationship management (CRM) program is earlier identification of shifts in customer preferences. CRM is a strategy that focuses on building and maintaining long-term relationships with customers by understanding their needs, preferences, and behaviors. CRM enables organizations to anticipate and respond to changes in customer demand, improve customer satisfaction and loyalty, and increase profitability and competitiveness. CRM also helps organizations to segment and target customers based on their value and potential, and to customize products and services accordingly. CRM involves the use of various tools and techniques, such as data collection and analysis, communication channels, feedback mechanisms, and loyalty programs. References:
Managing Supply Chain Operations, Chapter 4: Customer Relationship Management, Section 4.1:
Introduction to Customer Relationship Management
CPIM Exam Content Manual, Module 1: Supply Chains and Strategy, Section 1.2: Customer Relationship Management, Subsection 1.2.1: Customer Relationship Management Concepts
NEW QUESTION # 50
The primary benefit that results from the cross-training of employees is:
- A. effective problem-solving.
- B. improved capacity.
- C. shortened lead time.
- D. improved flexibility.
Answer: D
Explanation:
Cross-training employees is the process of training employees for skills and job roles they weren't initially hired for. This allows them to switch between different tasks and roles when needed, which increases the flexibility and adaptability of the workforce. Cross-training also enhances the problem-solving, communication, and collaboration skills of the employees, but the primary benefit is improved flexibility12 References: 1: 9 Major Benefits of Cross-Training Employees Effectively 2: Employee cross-training: 8 benefits you can't afford to miss
NEW QUESTION # 51
The master schedule is an Important tool in the sales and operations planning (S&OP) process because it:
- A. balances supply and demand at the product mix level.
- B. represents the forecast with less detail.
- C. balances supply and demand at the sales volume level.
- D. represents the forecast before changes are made in S&OP.
Answer: A
Explanation:
The master schedule is an important tool in the sales and operations planning (S&OP) process because it balances supply and demand at the product mix level. The master schedule is a detailed plan that specifies the quantity and timing of each end item or product family to be produced. It is derived from the aggregate production plan, which is the output of the S&OP process. The master schedule helps to translate the aggregate plan into specific product requirements and to allocate the available capacity to meet the demand. The master schedule also provides input to the material requirements planning (MRP) and capacity requirements planning (CRP) systems, which further refine the production plan at the component and resource levels. The other statements are not true about the master schedule. The master schedule does not represent the forecast before changes are made in S&OP, as the forecast is an input to the S&OP process, not an output. The master schedule does not represent the forecast with less detail, as the master schedule is more detailed than the forecast, which is usually expressed in aggregate terms. The master schedule does not balance supply and demand at the sales volume level, as the sales volume level is the level of the aggregate production plan, not the master schedule. References: Master Schedule | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM
NEW QUESTION # 52
Which of the following actions hinders the transition from a push system to a pull system?
- A. Maintaining a constant number of kanban cards during minor changes in the level of production
- B. Using standardized containers
- C. Introducing kanban cards as authorization for material movement
- D. Using work orders as a backup
Answer: D
Explanation:
A push system is a production system that relies on forecasts and schedules to plan the production and distribution of goods and services. A pull system is a production system that responds to actual customer demand and signals to trigger the production and distribution of goods and services. A transition from a push system to a pull system requires a change in the mindset and the processes of the organization, as well as the adoption of new tools and techniques to enable a demand-driven production system12.
One of the tools that is commonly used in a pull system is kanban, which is a visual signal that indicates the need for replenishment of materials or products. Kanban cards are attached to standardized containers that hold a fixed amount of inventory. When a container is empty, the kanban card is sent back to the upstream process as a signal to produce more. This way, the inventory level is controlled by the actual consumption of the downstream process, and the production is synchronized with the demand13.
One of the actions that hinders the transition from a push system to a pull system is using work orders as a backup. Work orders are documents that authorize the production of a certain quantity of a product or a service, based on a forecast or a schedule. Work orders are typical of a push system, as they are not triggered by the actual customer demand, but by the planned production. Using work orders as a backup means that the organization is not fully committed to the pull system, and still relies on the push system to ensure the availability of inventory. This can create confusion, inconsistency, and inefficiency in the production system, as well as increase the inventory holding costs and the risk of obsolescence1 .
Therefore, using work orders as a backup is the correct answer, as it is an action that hinders the transition from a push system to a pull system. The other options are actions that support the transition, as they are aligned with the principles and practices of a pull system.
NEW QUESTION # 53
When starting an external benchmarking study, a firm must first:
- A. identify the target firms with which to benchmark against.
- B. determine the metrics which will be measured and compared.
- C. understand its own processes and document performance.
- D. determine its areas of weakness versus the competition's.
Answer: C
Explanation:
External benchmarking is a strategic tool where a company compares its processes and performance metrics to industry bests or competitors1. Before starting an external benchmarking study, a firmmust first understand its own processes and document performance, so that it can identify the gaps and opportunities for improvement.
This is also a requirement for regulatory compliance2. Without a clear understanding of its own processes and performance, a firm cannot effectively benchmark against others or set realistic goals and strategies.
References:
*What Is External Benchmarking? (with picture) - Smart Capital Mind
*5 Strategies for Effective ASC External Benchmarking - Becker's ASC
NEW QUESTION # 54
Which of the following techniques would a group use to prioritize problems?
- A. Pareto analysis
- B. Critical path analysis
- C. Cause-and-effect diagrams
- D. Scatter charts
Answer: A
Explanation:
Pareto analysis is a technique for separating input factors with the greatest impact on an outcome and prioritizing them based on their scores. It is based on the 80-20 rule, which states that 80% of a project's benefit or problems can be achieved by doing 20% of the work or fixing 20% of the causes. Pareto analysis helps to identify the top portion of causes that need to be addressed to resolve the majority of problems. Pareto Analysis - Overview, Limitations, Pareto Diagram References: Pareto analysis - Wikipedia, What Is Pareto Analysis? How to Create a Pareto Chart and Example, APICS CPIM Part 1 Exam Content Manual (page 14)
NEW QUESTION # 55
Risk pooling would work best for items with:
- A. low demand uncertainty and long lead times.
- B. high demand uncertainty and short lead times.
- C. low demand uncertainty and short lead times.
- D. high demand uncertainty and long lead times.
Answer: D
Explanation:
Risk pooling is the concept of reducing the variability in demand for raw materials or finished goods by aggregating demand across multiple locations or products1. By doing so, the demand fluctuations are more likely to cancel out each other, resulting in a lower safety stock and inventory cost. Risk pooling works best for items with high demand uncertainty and long lead times, because these items have the highest risk of stockouts and the highest inventory holding cost. If the demand uncertainty is low, there is less need for risk pooling, as the demand can be easily forecasted and met. If the lead time is short, the replenishment orders can be placed more frequently and adjusted to the actual demand, reducing the need for safety stock and risk pooling2. References: 1 Inventory risk pooling definition - AccountingTools 3 2 Supply Chain Management:
Risk pooling - UNB 4
NEW QUESTION # 56
A company's primary performance objective Is flexibility. Which of the following measurements is most important?
- A. Machine changeover time
- B. Cycle time
- C. Labor productivity
- D. Schedule adherence
Answer: A
Explanation:
Flexibility is the ability of a process or system to adapt to changes in customer demand, product mix, or production volume. A flexible process can respond quickly and efficiently to these changes, minimizing disruptions and costs. One of the key measurements of flexibility is machine changeover time, which is the time required to switch a machine or equipment from producing one type of product to another. A shorter machine changeover time means a higher level of flexibility, as the process can accommodate different products or orders without wasting time or resources. This aligns with CPIM's focus on plan, manage, and execute detailed schedules and manage quality, continuous improvement, and technology. References: The concepts are covered in detail in Module 5: Detailed Scheduling and Planning (1 and Module 6: Quality, Continuous Improvement, and Technology (2. You can also find more information about flexibility and machine changeover time from these sources: 3, 4, and 5.
NEW QUESTION # 57
Which of the following tools shows process changes and random variation over time?
- A. Control chart
- B. Check sheet
- C. Pareto analysis
- D. Histogram
Answer: A
Explanation:
A control chart is a tool that shows process changes and random variation over time. It is a type of statistical process control (SPC) that monitors the performance of a process and detects whether it is in or out of control.
A control chart consists of a center line, an upper control limit, and a lower control limit. The center line represents the average or target value of the process. The control limits represent the acceptable range of variation withinthe process. If the data points fall within the control limits, the process is considered stable and in control. If the data points fall outside the control limits, or show a non-random pattern, the process is considered unstable and out of control, indicating the presence of special causes of variation that need to be investigated and eliminated. References:
Managing Supply Chain Operations, Chapter 9: Quality Management, Section 9.2: Statistical Process Control CPIM Exam Content Manual, Module 8: Quality, Technology and Continuous Improvement, Section
8.1: Quality Management, Subsection 8.1.2: Statistical Process Control
NEW QUESTION # 58
Fishbone diagrams would help a service organization determine:
- A. the source of a quality-of-service issue.
- B. the proper level of service for a customer segment.
- C. differences in the performance of employees.
- D. the decomposition of customer return rates with seasonality.
Answer: A
Explanation:
Fishbone diagrams would help a service organization determine the source of a quality-of-service issue. A fishbone diagram, also known as a cause-and-effect diagram or an Ishikawa diagram, is a tool for identifying and analyzing the root causes of a problem or an effect. It uses a fish-shaped diagram to display the potential causes of a problem in different categories, such as people, processes, equipment, environment, etc. A fishbone diagram can help a service organization to determine the source of a quality-of-service issue by allowing the organization to brainstorm and organize the possible factors that may affect the quality of the service delivered to the customers, such as staff training, customer feedback, service standards, equipment maintenance, etc. A fishbone diagram can also help the organization to prioritize and test the most likely causes, and to develop and implement solutions to improve the quality of service12. References: 1 What is a Fishbone Diagram? Ishikawa Cause & Effect Diagram | ASQ 3 2 CPIM Exam References - Association for Supply Chain Management 1
NEW QUESTION # 59
Which of the following factors Is considered a carrying cost?
- A. Setup
- B. Transportation
- C. Scrap rate
- D. Obsolescence
Answer: D
Explanation:
Carrying cost is the total cost of holding and storing inventory. It includes various expenses such as storage, insurance, taxes, depreciation, and obsolescence. Obsolescence is the loss of value or usefulness of inventory due to changes in technology, customer preferences, or market conditions. Obsolescence is considered a carrying cost because it reduces the potential revenue that can be generated from selling the inventory. Setup, transportation, and scrap rate are not carrying costs, but rather order costs, logistics costs, and quality costs respectively. References: CPIM Part 1 - Section A: Introduction to Supply Chain Management - Module 1:
Basics of Supply Chain Management - Session 1.4: Inventory - Inventory Costs. CPIM Part 1 Study Guide, pp.
1-32 - 1-33.
NEW QUESTION # 60
Which of the following strategies is most appropriate for a business unit with a low relative market share in a high-growth market?
- A. Designing product improvements to protect market share
- B. Using excess cash generated to fund other business units
- C. Investing in the acquisition of competitors
- D. Investing in projects to maintain market share
Answer: D
Explanation:
For a business unit with a low relative market share in a high-growth market, the most appropriate strategy is investing in projects to maintain market share. In a high-growth market, opportunities for expanding or solidifying market share are significant. A business unit with a low market share can benefit from investing in projects that enhance its competitive position, such as improving operational efficiency, innovation in products or services, and marketing efforts. These investments aim to strengthen the unit's market presence and capitalize on the growth potential of the market. This approach is more suitable than using excess cash for other units, acquiring competitors, or just focusing on product improvements, as it directly addresses the need to build a stronger market position in a growing market.
NEW QUESTION # 61
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