Free Practice Questions for APICS CPIM-Part-2 Exam

Developing flexible operations is the best action that supports a company’s strategic focus on delivery speed to improve competitive advantage. Flexible operations are the ability to adapt to changes in customer demand, product mix, quality standards, and delivery schedules1. Flexible operations can help a company achieve faster delivery speed by enabling it to respond quickly and efficiently to fluctuations in the market, reduce lead times, optimize resource utilization, and avoid bottlenecks2. Flexible operations can also help a company gain a competitive edge by offering a wider variety of products or services, different volumes or quantities, and varying delivery dates to meet customer needs and expectations3.

Some examples of flexible operations are:

Volume flexibility: the ability to produce different quantities or volumes of output3

Delivery flexibility: the ability to change the timings or modes of delivery3

Product flexibility: the ability to produce different types or variants of products or services4

Process flexibility: the ability to use different methods or technologies to perform a process4

Resource flexibility: the ability to use different inputs or resources for a process4

Some strategies for developing flexible operations are:

Using modular design: designing products or services that consist of interchangeable components or modules that can be easily assembled or disassembled5

Implementing automation: using machines or software to perform tasks that would otherwise require human labor6

Adopting lean principles: eliminating waste and non-value-added activities from processes, such as overproduction, inventory, defects, waiting, transportation, motion, and overprocessing7

Applying agile methods: using iterative and incremental approaches to deliver products or services that meet changing customer requirements and feedback

Cross-training workers: training workers to perform multiple tasks or roles within a process or organization

References: 1: Operations Flexibility Definition 2 2: Why flexibility is critical when planning an operations - KPMG 4 3: Performance Objectives - What Are the 5 Business Objectives? - PeopleGoal 1 4: Competitive Priorities in Operations with Examples - StudiousGuy 5 5: Modular Design Definition 6: Automation Definition 7: Lean Principles Definition : Agile Methodology Definition : Cross-training Definition

When deciding what to report externally regarding sustainability performance, a company should disclose its past results and future strategies. This will help the company to demonstrate its progress, achievements, challenges, and commitments in relation to its environmental, social, and governance (ESG) goals. Disclosing past results and future strategies will also enhance the company’s transparency, accountability, and credibility with its stakeholders, such as investors, customers, employees, regulators, and the public.

Disclosing results of poor performance or acceptable performance alone is not sufficient, as it does not provide a complete picture of the company’s sustainability performance. Moreover, disclosing only poor performance may damage the company’s reputation and trust, while disclosing onlyacceptable performance may raise doubts about the company’s honesty and reliability. Disclosing why current regulations are too costly is irrelevant and inappropriate, as it does not reflect the company’s sustainability performance or efforts. It may also imply that the company is not willing or able to comply with the regulations or improve its sustainability practices.

References : A Comprehensive Guide on How to Write a Sustainability Report; Designing Your Company’s Sustainability Report; What to Include in a Sustainability Report.

The sales and operations planning (S&OP) process is a cross-functional process that aligns the demand and supply plans of an organization. The S&OP process consists of several steps, such as data gathering, demand planning, supply planning, pre-S&OP meeting, executive S&OP meeting, and S&OP implementation. The output of the S&OP process is the production plan, which is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The production plan can be stated in different units of measure depending on the type of manufacturing environment. In a repetitive manufacturing environment, where the same or similar products are produced continuously or at regular intervals, the production plan can be stated in terms of the number of products planned for shipment. This unit of measure reflects the volume and mix of products that are expected to be sold and delivered to the customers. The number of products planned for shipment can also be used to calculate the capacity requirements, material requirements, and inventory levels for each product family.

References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1: Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).

Input/output control (I/O) is a type of tool that is used for monitoring a capacity plan. A capacity plan is a statement of the resources needed to meet the production plan over a medium-term horizon. A capacity plan can be stated in different units of measure depending on the type of manufacturing environment, such as hours, units, tons, or dollars. Input/output control (I/O) is a method of measuring and comparing the actual input and output of a work center or a production line against the planned input and output. Input is the amount of work that is released to the work center or the production line, and output is the amount of work that is completed by the work center or the production line. Input/output control (I/O) helps to monitor the performance and efficiency of the work center or the production line, and to identify any deviations or problems that may affect the capacity plan. Input/output control (I/O) also helps to adjust the input or output levels as necessary to maintain the balance between demand and supply, and to achieve the desired throughput.

References: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.3: Monitor Detailed Schedules, Subsection 6.3.2: Describe how to monitor input/output control (I/O) (page 60).

The percentage of defective parts is the proportion of units that do not meet the specification limits. The process capability index (Cpk) is a measure of how well the process can produce within the specification limits. Both the percentage of defective parts and the Cpk depend on the specification range and the process variation1.

If the supplier changes the tolerance range from + 0.3 mm to + 0.5 mm, the specification range becomes wider, which means that more units will fall within the specification limits and fewer units will be defective. Therefore, the percentage of defective parts decreases.

However, if the process variation remains unchanged, the Cpk will decrease, because Cpk is inversely proportional to the specification range2. A wider specification range means a lower Cpk, which indicates a lower process capability. A lower Cpk also implies a higher percentage of defective parts in relation to the process variation3.

Therefore, the correct answer is D. The percentage of defective parts decreases, and the process capability index decreases.

References:

Understanding Process Capability Index (Cpk) [With Calculator]

[Process Capability Index - an overview | ScienceDirect Topics]

Converting A Capability Index to PPM Defective - Accendo Reliability

Risk pooling is a strategy to reduce the total safety stock by aggregating the inventory of multiple items or locations. Risk pooling works best for items with high demand uncertainty and long lead times, because these items have higher variability and require more safety stock. By pooling the inventory, the variability of the total demand is reduced, and the safety stock can be lowered without increasing the risk of stockouts. References: CPIM Part 2 Exam Content Manual, Domain 5: Plan and Manage Inventory, Section 5.3: Inventory Management Policies and Objectives, p. 28.

 Substituting capital equipment in place of direct labor can be economically justified for the scenario where volumes are forecasted to increase. This is because capital equipment can provide higher productivity, efficiency, and quality than direct labor, especially when the demand for the product or service is high or growing. Capital equipment can also reduce the labor costs, such as wages, benefits, training, and turnover, that are associated with direct labor12. Therefore, investing in capital equipment can lower the unit cost and increase the profit margin of the product or service, as well as improve the customer satisfaction and loyalty.

The other scenarios are not likely to justify substituting capital equipment in place of direct labor, because they are either irrelevant or ineffective. Material prices are forecasted to increase (B) is a factor that affects the cost of inputs, not outputs. Substituting capital equipment in place of direct labor may not reduce the material costs, unless the capital equipment can use less or cheaper materials than direct labor. Implementing a pull system in production © is a method of managing inventory and production based on actual customer demand, rather than forecasts. Substituting capital equipment in place of direct labor may not facilitate the implementation of a pull system, unless the capital equipment can provide more flexibility and responsiveness than direct labor. Functional layouts are being utilized (D) is a way of arranging the production facilities according to the type of operation or function performed. Substituting capital equipment in place of direct labor may not improve the performance or efficiency of a functional layout, unless the capital equipment can reduce the setup time or transportation cost between different functions.

References:

Make-or-Buy Decision - Definition & Examples | Marketing Tutor

Make-or-Buy Decision - Overview, How It Works, Triggers

Make or Buy Decision - Definition & Examples | Marketing Tutor

Make or Buy Decision - What Is It, Examples, Factors, Advantages

Resource planning is a planning module that considers the longest-range planning goals. Resource planning is a method of determining the long-term capacity and resource requirements for a manufacturing system, based on the aggregate production plan, the sales and operations plan, and the business plan. Resource planning helps to align the production capacity and resources with the strategic objectives and goals of the organization. Resource planning considers the longest-range planning goals, which are usually expressed in terms of years or quarters.

The other options are not planning modules that consider the longest-range planning goals. Capacity requirements planning (CRP) is a planning module that calculates the capacity and load for each work center in a manufacturing system, based on the material requirements plan, the routing file, and the open order file. CRP helps to identify and resolve the capacity constraints and bottlenecks in the production process. CRP considers the short-range planning goals, which are usually expressed in terms of days or weeks. Input/output analysis is a planning module that compares the actual input/output of each work center in a manufacturing system with the planned input/output, based on the capacity requirements plan and the shop floor data. Input/output analysis helps to monitor and control the performance and efficiency of each work center. Input/output analysis considers the short-range planning goals, which are usually expressed in terms of days or weeks. Rough-cut capacity planning (RCCP) is a planning module that estimates the feasibility and adequacy of the key resources or work centers in a manufacturing system, based on the master production schedule and the bill of resources. RCCP helps to validate and adjust the master production schedule according to the available capacity and resources. RCCP considers the medium-range planning goals, which are usually expressed in terms of months or weeks. References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.2: Supply Planning Methods, p. 26; Resource Planning; Capacity Requirements Planning.

According to the web search results, the production plan is a long-term plan that establishes the quantity and timing of the end products to be produced by the company1. The production plan is based on the forecasted demand, the available capacity, and the company’s strategic objectives2. The production plan is also used to authorize and guide the master schedule, which is a more detailed and short-term plan that specifies the quantity and timing of each end product to be produced in each time period3. The master schedule is derived from the production plan, and it must not exceed the production plan’s limits. Therefore, the major contribution of the production plan is to provide authorization for the master schedule.

The other options are not correct, because they are either irrelevant or inaccurate. The production plan does not establish demand by end item, but rather responds to the forecasted demand by end item. The production plan does not identify key resources to support the master schedule, but rather determines the overall resource requirements to meet the production targets. The production plan does not establish the weekly build schedule, but rather provides the basis for the weekly build schedule, which is a more detailed breakdown of the master schedule that specifies how many units of each end product will be built in each week.

References:

Production Planning - Definition, Objectives, Types, Importance

Production Planning in Manufacturing: Best Practices for Production Plans

Master Production Schedule (MPS) - Definition & Examples | Marketing Tutor

[Master Production Schedule (MPS) - Meaning & Process | Tallyfy]

[Production Planning - an overview | ScienceDirect Topics]

[Production Planning: Definition, Levels, Objectives and Factors]

[What Is a Weekly Build Schedule? | Bizfluent]

The sales and operations planning (S&OP) process is a cross-functional process that aligns the demand and supply plans of an organization. The S&OP process consists of several steps, such as data gathering, demand planning, supply planning, pre-S&OP meeting, executive S&OP meeting, and S&OP implementation. Once the S&OP process has been completed, the executive S&OP meeting approves the final production plan, which is the output of the supply planning step. The production plan is a statement of the resources needed to meet the aggregate demand plan over a medium-term horizon. The functional responsibility of operations is to meet the revised production plan by developing and executing the master production schedule (MPS) and the detailed schedules. The MPS is a statement of the specific end items to be produced in each time period of the short-term horizon. The detailed schedules are the statements of the specific materials, resources, and activities needed to execute the MPS. References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1: Develop Supply Plans, Subsection 4.1.2: Describe how to develop a production plan (page 36).