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Question 6
Which of the following factors may be used to calculate available capacity?
Correct Answer: D
Explanation
Available capacity is the difference between the required capacity and planned operating capacity1. It refers to how capable the resources in an organization are in formulating and implementing strategy1. To calculate available capacity, factors such as the number of machines or workers, the number of shifts, utilization, and efficiency are considered1. Efficiency, in particular, is a crucial factor as it measures how effectively resources are used to produce output. It is calculated as the ratio of actual output to standard output within a specific time period1. Therefore, efficiency directly impacts available capacity by determining how much output can be produced with the available resources and time.
The other options, while important in production and operations management, are not directly used to calculate available capacity:
Productivity measures the output per unit of input and is more about overall performance rather than available capacity.
Load refers to the amount of work assigned to a resource or facility but does not directly indicate available capacity.
Yield measures the percentage of products that meet quality standards out of total units produced but does not directly calculate available capacity.
References: Capacity planning - Wikipedia.
Available capacity is the difference between the required capacity and planned operating capacity1. It refers to how capable the resources in an organization are in formulating and implementing strategy1. To calculate available capacity, factors such as the number of machines or workers, the number of shifts, utilization, and efficiency are considered1. Efficiency, in particular, is a crucial factor as it measures how effectively resources are used to produce output. It is calculated as the ratio of actual output to standard output within a specific time period1. Therefore, efficiency directly impacts available capacity by determining how much output can be produced with the available resources and time.
The other options, while important in production and operations management, are not directly used to calculate available capacity:
Productivity measures the output per unit of input and is more about overall performance rather than available capacity.
Load refers to the amount of work assigned to a resource or facility but does not directly indicate available capacity.
Yield measures the percentage of products that meet quality standards out of total units produced but does not directly calculate available capacity.
References: Capacity planning - Wikipedia.
Question 7
Which of the following activities represents waste in a system?
Correct Answer: D
Explanation
A purchase order is issued to the supplier for each delivery requirement is an activity that represents waste in a system. Waste is any activity or process that does not add value to the customer or the product, but consumes resources, time, or money. Waste can reduce the efficiency, productivity, and quality of the system, as well as increase the costs, defects, or delays. Waste can be classified into seven types: overproduction, inventory, transportation, motion, waiting, overprocessing, and defects1.
Issuing a purchase order to the supplier for each delivery requirement is an example of overprocessing waste.
Overprocessing waste is any activity or process that is unnecessary or excessive for meeting the customer needs or specifications. Overprocessing waste can result from poor communication, unclear requirements, redundant tasks, or outdated procedures. Issuing a purchase order to the supplier for each delivery requirement is an overprocessing waste because it involves more paperwork, approvals, and transactions than needed. It can also create confusion, errors, or delays in the delivery process. A better way to eliminate this waste is to use a pull system, such as kanban2, that signals the supplier to deliver only when there is a demand from the customer.
The other options are not activities that represent waste in a system. More kanbans with smaller quantities are added to the supply chain is an activity that reduces waste in a system. Kanban is a pull system that uses visual signals, such as cards or containers, to indicate when and how much to produce or deliver. Kanban can help reduce waste by synchronizing the production and delivery processes with the customer demand, minimizing inventory levels, improving quality and efficiency, and preventing overproduction or underproduction3.
Adding more kanbans with smaller quantities can help reduce inventory waste by lowering the holding costs, transportation costs, or obsolescence costs of inventory. It can also help reduce overproduction waste by producing or delivering only what is needed by the customer.
A kanban is eliminated from the system is an activity that reduces waste in a system. Eliminating a kanban from the system means reducing the number of signals or containers used in the production or delivery process. Eliminating a kanban from the system can help reduce waste by increasing the throughput and velocity of the process, reducing cycle times and lead times, improving responsiveness and flexibility, and enhancing customer satisfaction4.
A production forecast is issued to the supplier is not an activity that represents waste in a system. A production forecast is an estimate of the future demand or sales of a product or service. A production forecast can help plan and manage the production and delivery processes by determining how much and when to produce or deliver. A production forecast can help reduce waste by optimizing the use of resources and capacity, minimizing inventory levels and costs, improving service levels and quality, and avoiding stockouts or shortages5. Issuing a production forecast to thesupplier can help align the production and delivery processes with the customer demand and expectations.
References := The 7 Wastes With Examples: How to Identify Them | Lean Manufacturing, What Is Overprocessing Waste? Definition And Examples, Kanban - Wikipedia, How To Reduce Inventory With Kanban | Lean Manufacturing, Production Forecasting - an overview | ScienceDirect Topics
A purchase order is issued to the supplier for each delivery requirement is an activity that represents waste in a system. Waste is any activity or process that does not add value to the customer or the product, but consumes resources, time, or money. Waste can reduce the efficiency, productivity, and quality of the system, as well as increase the costs, defects, or delays. Waste can be classified into seven types: overproduction, inventory, transportation, motion, waiting, overprocessing, and defects1.
Issuing a purchase order to the supplier for each delivery requirement is an example of overprocessing waste.
Overprocessing waste is any activity or process that is unnecessary or excessive for meeting the customer needs or specifications. Overprocessing waste can result from poor communication, unclear requirements, redundant tasks, or outdated procedures. Issuing a purchase order to the supplier for each delivery requirement is an overprocessing waste because it involves more paperwork, approvals, and transactions than needed. It can also create confusion, errors, or delays in the delivery process. A better way to eliminate this waste is to use a pull system, such as kanban2, that signals the supplier to deliver only when there is a demand from the customer.
The other options are not activities that represent waste in a system. More kanbans with smaller quantities are added to the supply chain is an activity that reduces waste in a system. Kanban is a pull system that uses visual signals, such as cards or containers, to indicate when and how much to produce or deliver. Kanban can help reduce waste by synchronizing the production and delivery processes with the customer demand, minimizing inventory levels, improving quality and efficiency, and preventing overproduction or underproduction3.
Adding more kanbans with smaller quantities can help reduce inventory waste by lowering the holding costs, transportation costs, or obsolescence costs of inventory. It can also help reduce overproduction waste by producing or delivering only what is needed by the customer.
A kanban is eliminated from the system is an activity that reduces waste in a system. Eliminating a kanban from the system means reducing the number of signals or containers used in the production or delivery process. Eliminating a kanban from the system can help reduce waste by increasing the throughput and velocity of the process, reducing cycle times and lead times, improving responsiveness and flexibility, and enhancing customer satisfaction4.
A production forecast is issued to the supplier is not an activity that represents waste in a system. A production forecast is an estimate of the future demand or sales of a product or service. A production forecast can help plan and manage the production and delivery processes by determining how much and when to produce or deliver. A production forecast can help reduce waste by optimizing the use of resources and capacity, minimizing inventory levels and costs, improving service levels and quality, and avoiding stockouts or shortages5. Issuing a production forecast to thesupplier can help align the production and delivery processes with the customer demand and expectations.
References := The 7 Wastes With Examples: How to Identify Them | Lean Manufacturing, What Is Overprocessing Waste? Definition And Examples, Kanban - Wikipedia, How To Reduce Inventory With Kanban | Lean Manufacturing, Production Forecasting - an overview | ScienceDirect Topics
Question 8
The planned channels of inventory disbursement from one or more sources to field warehouses are known as:
Correct Answer: C
Explanation
A bill of distribution is a document that specifies the planned channels of inventory disbursement from one or more sources to field warehouses. A bill of distribution is similar to a bill of materials, but it applies to the distribution stage rather than the production stage. A bill of distribution helps to optimize the inventory level, reduce transportation costs, and improve customer service. A bill of distribution considers the factors such as demand patterns, lead times, costs, and capacities of the sources and warehouses.
The other options are not documents that specify the planned channels of inventory disbursement from one or more sources to field warehouses. A supply chain community is a network of organizations that collaborate and coordinate their activities to deliver products or services to customers. A supply chain community includes suppliers, manufacturers, distributors, retailers, and customers. A supply chain community helps to improve the visibility, efficiency, and responsiveness of the supply chain. Interplant demand is the demand for a product or component that is generated by another plant within the same organization. Interplant demand is usually transferred through internal orders or shipments. Interplant demand helps to balance the capacity and resources among different plants. Logistics data interchange (LDI) is a system that enables the exchange of information and documents among different parties involved in the logistics process. LDI uses electronic data interchange (EDI) or other technologies to transmit data such as orders, invoices, shipment notices, and tracking information. LDI helps to improve the accuracy, speed, and security of the logistics transactions. References: CPIM Exam Content Manual Version 7.0, Domain 7: Plan and Manage Distribution, Section 7.1: Distribution Planning Concepts, p. 40; Bill of Distribution; Supply Chain Community.
A bill of distribution is a document that specifies the planned channels of inventory disbursement from one or more sources to field warehouses. A bill of distribution is similar to a bill of materials, but it applies to the distribution stage rather than the production stage. A bill of distribution helps to optimize the inventory level, reduce transportation costs, and improve customer service. A bill of distribution considers the factors such as demand patterns, lead times, costs, and capacities of the sources and warehouses.
The other options are not documents that specify the planned channels of inventory disbursement from one or more sources to field warehouses. A supply chain community is a network of organizations that collaborate and coordinate their activities to deliver products or services to customers. A supply chain community includes suppliers, manufacturers, distributors, retailers, and customers. A supply chain community helps to improve the visibility, efficiency, and responsiveness of the supply chain. Interplant demand is the demand for a product or component that is generated by another plant within the same organization. Interplant demand is usually transferred through internal orders or shipments. Interplant demand helps to balance the capacity and resources among different plants. Logistics data interchange (LDI) is a system that enables the exchange of information and documents among different parties involved in the logistics process. LDI uses electronic data interchange (EDI) or other technologies to transmit data such as orders, invoices, shipment notices, and tracking information. LDI helps to improve the accuracy, speed, and security of the logistics transactions. References: CPIM Exam Content Manual Version 7.0, Domain 7: Plan and Manage Distribution, Section 7.1: Distribution Planning Concepts, p. 40; Bill of Distribution; Supply Chain Community.
Question 9
The primary consideration in maintenance, repair, and operating (MRO) supply systems typically is:
Correct Answer: B
Explanation
Maintenance, repair, and operating (MRO) supply systems are systems that manage the inventory and procurement of the items that are used to support the production process, but are not part of the final product.
MRO items include spare parts, tools, lubricants, cleaning supplies, safetyequipment, and office supplies. The primary consideration in MRO supply systems typically is stockout costs. Stockout costs are the costs associated with the inability to meet the demand for an item due to insufficient inventory. Stockout costs can include lost sales, customer dissatisfaction, production downtime, emergency orders, and reputation damage.
Stockout costs can be very high for MRO items, especially if they are critical for the operation and maintenance of the production equipment. Therefore, MRO supply systems should aim to minimize the risk of stockouts by ensuring adequate availability and accessibility of MRO items.
References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2:
Implement Inventory Plans, Subsection 5.2.3: Describe how to implement inventory replenishment techniques (page 46).
Maintenance, repair, and operating (MRO) supply systems are systems that manage the inventory and procurement of the items that are used to support the production process, but are not part of the final product.
MRO items include spare parts, tools, lubricants, cleaning supplies, safetyequipment, and office supplies. The primary consideration in MRO supply systems typically is stockout costs. Stockout costs are the costs associated with the inability to meet the demand for an item due to insufficient inventory. Stockout costs can include lost sales, customer dissatisfaction, production downtime, emergency orders, and reputation damage.
Stockout costs can be very high for MRO items, especially if they are critical for the operation and maintenance of the production equipment. Therefore, MRO supply systems should aim to minimize the risk of stockouts by ensuring adequate availability and accessibility of MRO items.
References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2:
Implement Inventory Plans, Subsection 5.2.3: Describe how to implement inventory replenishment techniques (page 46).
Question 10
Which of the following tools shows process changes and random variation over time?
Correct Answer: B
Explanation
A control chart is a tool that shows process changes and random variation over time. A control chart is a graph that plots data points over time and shows the mean and the upper and lower control limits of the process. The mean is the average value of the data, and the control limits are the boundaries of the normal variation of the process. A control chart can help monitor the stability and performance of a process by detecting any unusual or non-random patterns in the data, such as trends, cycles, or shifts. A control chart can also help identify the sources of variation in the process, whether they are common causes (inherent to the process) or special causes (external factors). A control chart can be used for both variable data (measured on a continuous scale) and attribute data (counted or categorized).
A check sheet is a tool that collects and summarizes data in a structured way. A check sheet is a simple form that records the frequency or occurrence of specific events or problems during a process. A check sheet can help organize and analyze data by showing patterns, trends, or relationships among the data. A check sheet can also help identify potential causes of problems or areas for improvement.
A histogram is a tool that displays the distribution of data in a graphical way. A histogram is a type of bar chart that shows how many times each value or range of values occurs in a data set. A histogram can help describe and compare data by showing the shape, center, spread, and variation of the distribution. A histogram can also help identify outliers, gaps, or clusters in the data.
A Pareto analysis is a tool that prioritizes problems or causes based on their frequency or impact. A Pareto analysis is based on the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. A Pareto analysis uses a combination of a bar chart and a line graph to show the relative importance of different factors in a process. The bars represent the frequency ormagnitude of each factor, and the line represents the cumulative percentage of the total effect. A Pareto analysis can help focus on the most significant problems or causes and allocate resources accordingly.
References := Control Chart - Statistical Process Control Charts | ASQ, A Guide to Control Charts - iSixSigma, 2 Tools to Understand Variation in Your Improvement Journey, Understanding variation | Turas | Learn
A control chart is a tool that shows process changes and random variation over time. A control chart is a graph that plots data points over time and shows the mean and the upper and lower control limits of the process. The mean is the average value of the data, and the control limits are the boundaries of the normal variation of the process. A control chart can help monitor the stability and performance of a process by detecting any unusual or non-random patterns in the data, such as trends, cycles, or shifts. A control chart can also help identify the sources of variation in the process, whether they are common causes (inherent to the process) or special causes (external factors). A control chart can be used for both variable data (measured on a continuous scale) and attribute data (counted or categorized).
A check sheet is a tool that collects and summarizes data in a structured way. A check sheet is a simple form that records the frequency or occurrence of specific events or problems during a process. A check sheet can help organize and analyze data by showing patterns, trends, or relationships among the data. A check sheet can also help identify potential causes of problems or areas for improvement.
A histogram is a tool that displays the distribution of data in a graphical way. A histogram is a type of bar chart that shows how many times each value or range of values occurs in a data set. A histogram can help describe and compare data by showing the shape, center, spread, and variation of the distribution. A histogram can also help identify outliers, gaps, or clusters in the data.
A Pareto analysis is a tool that prioritizes problems or causes based on their frequency or impact. A Pareto analysis is based on the Pareto principle, which states that 80 percent of the effects come from 20 percent of the causes. A Pareto analysis uses a combination of a bar chart and a line graph to show the relative importance of different factors in a process. The bars represent the frequency ormagnitude of each factor, and the line represents the cumulative percentage of the total effect. A Pareto analysis can help focus on the most significant problems or causes and allocate resources accordingly.
References := Control Chart - Statistical Process Control Charts | ASQ, A Guide to Control Charts - iSixSigma, 2 Tools to Understand Variation in Your Improvement Journey, Understanding variation | Turas | Learn
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