APICS acknowledges the Basics of Supply Chain Management Committee for its contributions in the development of this resource.

Jim Caruso, CPIM, CSCP (chair) Carol Bulfer, CPIM James F. Cox, Ph.D., CFPIM, CIRM, Jonahs Jonah William Leedale, CFPIM, CIRM, CSCP Michael A. Roman, CPIM Angel A. Sosa, CFPIM

2009 APICS The Association for Operations Management No part of this publication covered by the copyright herein may be reproduced or copied in any form or by any means without the written permission of the publisher. APICS The Association for Operations Management 8430 West Bryn Mawr Avenue Suite 1000 Chicago, IL 60631 Phone: +1 800-444-2742 or +1 773-867-1777 Fax: +1 773-639-3009 Stock #09205, 01/09

Important Information Regarding these Practice Questions One important way to prepare for the APICS CPIM examinations is to simulate the test experience by taking a series of practice questions. One of the benefits of using the practice questions is familiarizing yourself with the types of questions encountered in an actual APICS certification examination. There is no correlation between the number of practice questions you answer correctly and your success under actual examination conditions, but your understanding of typical question formats can make the actual examination less stressful. Please be aware that these practice questions have been retired from previous examinations. In most cases, the questions had been used an optimal number of times and were replaced by questions that had enjoyed less exposure. For this reason, the questions may not have been developed using the references currently cited in the APICS Examination Content Manual as primary or additional references. The questions themselves have been reviewed for currency by the appropriate committee of the APICS Curricula and Certification Council. The practice questions in this publication have been selected to represent the topical distribution of the questions that you can expect to encounter in the examination. To assist you in a general understanding of how test questions are related to the reference materials used in their creation, the answer key provides the page numbers of the source reference material. However, unless they are identified in the current Examination Content Manual, do not assume that the references listed in this publication are appropriate for use as study materials. For more information about the APICS CPIM examinations, please visit the Certification section of the APICS website (www.apics.org).

Basics of Supply Chain Management Practice Questions | 1

Basics of Supply Chain Management Practice Questions

1. Which of the following demand fulfillment approaches typically provides the longest delivery time? (A) (B) (C) (D) engineer-to-order make-to-order assemble-to-order make-to-stock

2. Which of the following is generally a characteristic of a product-focused layout? (A) (B) (C) (D) large queues at workstations fixed flow of work production to a work order general purpose workstations

3. Which of the following is generally a function of the physical distribution system? (A) (B) (C) (D) production activity control production planning packaging bill of material

4. A forecast is typically more accurate for (A) (B) (C) (D) groups of items rather than for individual items daily rather than monthly periods of time physical units rather than monetary units far out in the future rather than nearer time periods

5. Which of the following is most likely to be a dependent demand item? (A) (B) (C) (D) a manufactured subassembly an item in a grocery store a service part an office supply item

6. Which of the following represents the pace of production synchronized with the rate of sales? (A) (B) (C) (D) poka-yoke takt continuous flow production leveling

Item 7 is based on the following data. Beginning inventory = 200 units Ending inventory = 200 units Sales forecast: Month 1 2 3 Quantity 200 300 200

4 400

5 300

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7. What is the required monthly production to achieve level production? (A) (B) (C) (D) 220 units 240 units 280 units 340 units

8. A lean production 5S system is designed to (A) (B) (C) (D) recycle discover defects identify work method deviations create a visual workplace

Items 9 and 10 are based on the following indented bill of material. Level 0 1 2 2 1 1 Part A B C E C G Quantity per not applicable 2 2 2 4 4

9. How many units of part C are required to produce one unit of part A? (A) (B) (C) (D) 2 4 6 8

10. Which of the items in the bill of material are parents? (A) (B) (C) (D) A only B, C, and G only A and B only A, B, C, and G only

11. The setup time for an operation is two hours and the run time is 10 minutes per piece. The scheduled operation time for 100 units is (A) (B) (C) (D) 130 minutes 1,000 minutes 1,100 minutes 1,120 minutes

12. Material requirements planning (MRP) schedules a planned order receipt when (A) (B) (C) (D) a gross requirement exists a net requirement exists an exception is generated safety stock is zero

13. Daily operating time divided by required quantity per day is a calculation of which of the following? (A) (B) (C) (D) cycle time process time takt time lead time

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14. A purpose of holding extra inventory is to (A) (B) (C) (D) allow production to select what to run minimize the bill of material levels reduce the number of purchased items buffer production from demand variation

15. Which of the following provides a buffer for seasonal demand? (A) (B) (C) (D) lot-size inventory fluctuation inventory anticipation inventory decoupling inventory

16. Owners equity is (A) (B) (C) (D) revenue less liabilities revenue less expenses assets less liabilities assets less expenses

Item 17 is based on the following data. Sales = $16 million Cost of goods sold = $10 million General and administrative expenses = $4 million Average inventory = $2.5 million 17. The inventory turnover ratio is (A) (B) (C) (D) 1.5 1.6 4.0 6.4

18. An item has a lead time of six weeks and an average demand of 150 units per week. The safety stock for the item is 300 units and the order quantity is 2,000 units. The order point for the item is (A) (B) (C) (D) 300 units 900 units 1,200 units 2,000 units

19. Which of the following is most consistent with ABC analysis and control? (A) (B) (C) (D) All items should have the same level of control. A small number of items account for a large portion of annual usage value. Items need tight control. Perpetual inventory records are required for all items.

20. In a decentralized distribution system, the role of the central supply is to (A) (B) (C) (D) determine when to replenish stock at the distribution centers respond to demands from the distribution centers coordinate communications among distribution centers forecast demand at each distribution center

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21. The primary purpose of a cycle count program is to (A) (B) (C) (D) correct inventory errors result in fewer counts per year require less skilled counters identify causes of inventory errors

22. What should an effective poka-yoke do? (A) (B) (C) (D) inspect 100 percent of items perform statistical process control randomly inspect incoming parts inspect 50 percent of items

23. In the Toyota Production System, which of the following concepts was key to breaking down the silos that cripple an organization? (A) (B) (C) (D) the cross-functional structure matrix cross-functional training the control department concept kanban

Item 24 is based on the following data. Periods: Forecast: Actual demand: 1 20 22 2 20 18 3 30 25 4 20 20 5 25 19

24. The mean absolute deviation (MAD) for the data given is (A) (B) (C) (D) 2.2 3 11 15

25. In the Toyota Production System (lean), which statement best describes the planning process? (A) A separate planning department comprised of forecasting and marketing experts continually assesses and reassesses marketing trends to respond effectively to new customers needs. (B) Significant data is collected and mined to determine trends and how to respond as a company to results of econometrics models. (C) An extension of MBO, which focuses on objectives and process, long- to short-term plan-docheck-act cycles, consensus building and alignment, catch ball, and people focus. (D) ERP and supply chain software collects the data for analysis, the planning department analyzes the data, top management analyze the results and develop a plan, which is reviewed by key workers. 26. Which of the following statements is correct? (A) (B) (C) (D) The lot size affects the product mix cycle. The stock out ratio frequently depends on the lot size quantity. The lot size always should be equal to one. The EOQ is the best method to calculate the lot size.

27. A primary advantage of electronic data interchange (EDI) with suppliers is that it (A) (B) (C) (D) reduces paperwork bypasses the buyer employs the latest technology supports unlimited forms of communications

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28. In most cases, the fastest way to increase capacity to meet a short-term requirement is to (A) (B) (C) (D) hire additional workers use overtime acquire more equipment subcontract work

29. The demand at a workstation in a lean system typically comes from (A) (B) (C) (D) a pull signal a dispatch list the production plan a control chart

30. Which of the following best describes a kanban system? (A) (B) (C) (D) a quality control system push production requires operator flexibility visual reorder point

31. The master production schedule (MPS) is (A) (B) (C) (D) an anticipated build schedule an input to the production plan a statement of forecast demand driven by material requirements planning

32. The balance sheet for a firm shows which of the following? (A) (B) (C) (D) profit or loss for the period sources and uses of funds long- and short-term debt cost of products sold

Item 33 is based on the following data. Month 1 2 3 4 Projection 100 100 100 100 Demand 95 102 105 98

5 100 102

6 100 103

Total 600 605

33. The projection for the seventh month using a three-month moving average would be (A) (B) (C) (D) 100 101 103 105

34. Which of the following is an advantage of a decentralized distribution center? (A) (B) (C) (D) easy coordination between distribution centers does not react quickly to local demand reduce coordination and communication expenses reduce the system safety stock

35. Which of the following costs are associated with variable transportation cost? (A) (B) (C) (D) pickup and delivery terminal handling line haul costs billing costs

6 | Basics of Supply Chain Management Practice Questions

36. Which of the following detects bias in a forecast model? (A) (B) (C) (D) tracking signal mean absolute deviation (MAD) demand filter standard deviation

Item 37 is based on the following data. On-hand 100 Week Forecast Projected Avail. MPS Receipts

1 200

2 200 300

3 200 300

4 200 300

37. The projected available at the end of Week 4 is (A) (B) (C) (D) zero units 100 units 200 units 300 units

38. Which of the following is the most likely impact of doubling the ordering costs for an item? (A) (B) (C) (D) The order quantity will increase. The order point will increase. The order quantity will decrease. The order point will decrease.

39. Work-in-process inventory serves to decouple which of the following? (A) (B) (C) (D) production from suppliers finished good inventory from customer demand an operation from succeeding operations production from distribution channels

40. Which of the following defines the sequence of operations to be performed to manufacture a part? (A) (B) (C) (D) item master bill of material routing shop calendar

Items 41 and 42 are based on the following information for a single work center. Number of machines = 4 Number of shifts = 1 Shift length = 40 hours Efficiency = 90% Utilization = 90% Actual output Week 1 = 160 hours Week 2 = 140 hours Week 3 = 150 hours Week 4 = 150 hours

41. Which of the following is the rated capacity for the work center? (A) (B) (C) (D) 130 hours 144 hours 150 hours 160 hours

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42. Which of the following is the demonstrated capacity for the work center? (A) (B) (C) (D) 130 hours 144 hours 150 hours 160 hours

43. Which of the following is used to manage queues and lead times? (A) (B) (C) (D) forward scheduling rough-cut capacity planning material requirements planning input/output control

44. Which of the following is used to rank the frequency of problems? (A) (B) (C) (D) Pareto analysis cause-and-effect diagram process flow diagram root cause analysis

45. Driver costs usually appear as what type of transportation cost? (A) (B) (C) (D) fixed transportation cost burdened into the line haul cost variable transportation cost expensed as a portion of the terminal cost

46. Which of the following is used to determine the feasibility of the material requirements plan? (A) (B) (C) (D) resource requirements planning rough-cut capacity planning capacity requirements planning work center capacity control

47. Which of the following combinations is best suited for developing customer promise dates in the make-to-order environment? (A) (B) (C) (D) forward scheduling and infinite loading forward scheduling and finite loading backward scheduling and infinite loading backward scheduling and finite loading

48. Which of the following is a benefit to the supplier of a long-term customer-supplier relationship? (A) (B) (C) (D) an improved ability to plan improved product quality more frequent shipments reduced transportation costs

49. Manufacturing has primary responsibility for which of the following dimensions of quality? (A) (B) (C) (D) product performance aesthetics conformance aftermarket service

8 | Basics of Supply Chain Management Practice Questions

50. Which of the following is an advantage of point-of-use inventory over central storage? (A) (B) (C) (D) the ease of control reduced material handling the ease of maintaining inventory records reduced safety stock

51. The line-haul costs vary directly with which of the following? (A) (B) (C) (D) the weight shipped the distance shipped the carrier used the degree of hazard associated with the product shipped

52. Total employee involvement will result in an increase in which of the following roles for firstline supervision? (A) (B) (C) (D) controlling coaching disciplining reporting

53. Which of the following groups should be the first to receive education on six-sigma concepts? (A) (B) (C) (D) senior management quality inspectors production operators production supervision

54. Which of the following is typically characterized as an element of the supply chain? (A) (B) (C) (D) finance distribution quality control engineering

55. Which of the following would most likely serve as an effective measure of supplier performance? (A) (B) (C) (D) component price internal scrap rate transportation mode delivery time

56. In projecting demand for a standard design commodity, which of the following factors is typically most important? (A) (B) (C) (D) post-sales service product features quality controls competitive pricing

57. Providing customers with what they want at low cost describes the relationship between which of the following? (A) (B) (C) (D) quality management and lean quality management and production planning ERP and lean quality management and CRP

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58. Which of the following is a good measure of customer focus? (A) (B) (C) (D) high organizational turnover high quality levels many performance measures many supplier contacts

59. Which of the following is a major consideration when selecting a supplier? (A) (B) (C) (D) supplier employee benefits supplier forecast accuracy supplier manufacturing reliability supplier pre-sales marketing success

60. Which of the following is typically the largest element of physical distribution costs? (A) (B) (C) (D) order processing final inspection transportation protective packaging