CPIM Certification Exam! MCQ Quiz

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  • 1/137 Questions

    A purpose of holding extra inventory is to

    • Allow production to select what to run
    • Minimize the bill of material levels
    • Reduce the number of purchased items
    • Buffer production from demand variation
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About This Quiz

Have you ever heard of CPIM certification, and do you think you can make the grade with this quiz? CPIM is the acronym for Certified in Production and Inventory Management. This certification is a professional title offered by the Association for Operations Management to assist operations, inventory, and logistics professionals in the production industry to demonstrate capability and ongoing experience and willingness to learn in the field. This quiz is top-notch. Give it a shot.

CPIM Certification Exam! MCQ Quiz - Quiz

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  • 2. 

    Why is manufacturing important to the economy?

    • It adds value to products to generate wealth.

    • B. It uses natural resources and prevents waste.

    • It decreases employment and generates wealth.

    • It prevents waste and decreases employment.

    Correct Answer
    A. It adds value to products to generate wealth.
    Explanation
    Manufacturing is important to the economy because it adds value to products, which in turn generates wealth. By transforming raw materials into finished goods, manufacturing creates products that have a higher value than the sum of their individual components. This value addition leads to increased economic activity, job creation, and ultimately, wealth generation. Manufacturing also plays a crucial role in driving innovation, productivity, and export competitiveness, making it a vital sector for economic growth and development.

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  • 3. 

    Total line-haul costs will vary with which of the following?a. Distance movedb. Packagingc. Customer discountsd. Perishability of the goods

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    Total line-haul costs will vary with distance moved because the longer the distance, the more fuel, labor, and maintenance costs will be incurred. Additionally, longer distances may require more stops or transfers, which can increase transportation costs. Therefore, the distance moved is a key factor in determining the total line-haul costs.

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  • 4. 

    Which of the following is typically characterized as an element of the supply chain?

    • Finance

    • Distribution

    • Quality control

    • Engineering

    Correct Answer
    A. Distribution
    Explanation
    Distribution is typically characterized as an element of the supply chain because it involves the movement of goods from the manufacturer to the end consumer. It includes activities such as transportation, warehousing, and inventory management. Distribution ensures that products are delivered to the right place, at the right time, and in the right quantity. It plays a crucial role in meeting customer demands and optimizing the flow of goods throughout the supply chain.

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  • 5. 

    Which of the following statements is most accurate about inventory management?a. Inventories and production must be managed together.b. Inventory is not important at the production planning level.c. Inventories are usually insignificant on the balance sheet.d. Inventory does not cost much to carry.

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    Inventory management is the process of overseeing and controlling the flow of goods into, within, and out of a company. Option a, "Inventories and production must be managed together," is the most accurate statement about inventory management. This is because inventory levels directly impact production planning and vice versa. Proper coordination between inventory and production is crucial to ensure that the right amount of inventory is available to meet customer demand while minimizing costs and avoiding stockouts or excess inventory.

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  • 6. 

    What is the name of the document that shows the component parts and the number ofparts needed to make one of an assembly or subassembly?a. A route sheetb. A material requirements planc. A bill of materiald. A material requisition

    • A

    • B

    • C

    • D

    Correct Answer
    A. C
    Explanation
    A bill of material is the document that shows the component parts and the number of parts needed to make one of an assembly or subassembly. It provides a comprehensive list of all the materials required for production, including their quantities and specifications. This document is essential for planning and organizing the manufacturing process, ensuring that all necessary parts are available and that the correct quantities are used.

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  • 7. 

    Which of the following statements is most accurate?a. About 20% of the items will usually account for about 80% of the total value.b. A items should have the loosest possible control.c. The general rule for using the ABC approach is to have plenty of everything instock.d. C items account for about 50% of the total value.

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    The statement "About 20% of the items will usually account for about 80% of the total value" is most accurate because it aligns with the Pareto principle, also known as the 80/20 rule. This principle suggests that a small percentage of inputs or efforts often lead to a large percentage of results or outcomes. In this case, it implies that a small percentage of items (20%) will contribute to a large percentage of the total value (80%). This concept is widely used in various fields, including inventory management, where it helps prioritize resources and focus on the most valuable items.

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  • 8. 

    Which of the following is an advantage of cycle counting?a. Timely detection and correction of problemsb. Reduction of direct labor costsc. Use of spare labord. Replenishment of inventory

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    Cycle counting is a method of regularly counting a subset of inventory items, rather than conducting a full physical inventory count. This allows for timely detection and correction of problems such as inventory discrepancies, stockouts, and inaccuracies in record-keeping. By regularly checking small portions of inventory, any issues can be identified and resolved quickly, preventing larger problems from occurring. This helps to improve inventory accuracy, reduce the risk of stockouts, and ensure that the inventory records are up to date. Therefore, option a, "Timely detection and correction of problems," is an advantage of cycle counting.

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  • 9. 

    The line-haul costs vary directly with which of the following

    • The weight shipped

    • The distance shipped

    • Carrier used

    • The degree of hazard associated with the product shipped

    Correct Answer
    A. The distance shipped
    Explanation
    The line-haul costs vary directly with the distance shipped because the longer the distance, the more fuel, labor, and maintenance costs are incurred by the carrier. The distance traveled also affects the time taken for transportation, which can impact the overall cost. Therefore, as the distance increases, the line-haul costs also increase.

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  • 10. 

    Which of the following is a major consideration when selecting a supplier?

    • Supplier employee benefits

    • Supplier forecast accuracy

    • Supplier manufacturing reliability

    • Supplier pre-sales marketing success

    Correct Answer
    A. Supplier manufacturing reliability
    Explanation
    When selecting a supplier, one of the major considerations is their manufacturing reliability. This refers to the supplier's ability to consistently produce and deliver products on time and in the desired quantity and quality. Manufacturing reliability is crucial for ensuring a smooth supply chain and minimizing disruptions or delays in the production process. By choosing a supplier with a strong track record of manufacturing reliability, businesses can have confidence in their ability to meet customer demand and maintain a consistent level of product availability.

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  • 11. 

    Which of the following costs is relevant to inventory management decisions?a. Run costsb. Storage costsc. Marketing costsd. New product development costs

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    Storage costs are relevant to inventory management decisions because they directly impact the overall cost of holding inventory. These costs include expenses such as warehousing, insurance, security, and handling fees. By considering storage costs, businesses can make informed decisions about how much inventory to hold, where to store it, and for how long. This helps optimize inventory levels and minimize holding costs, ultimately improving the company's profitability and efficiency.

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  • 12. 

    Which of the following is the next step in the purchasing cycle after a requisition isgenerated?a. Follow upb. Approve paymentc. Receive goodsd. Issue purchase order

    • A

    • B

    • C

    • D

    Correct Answer
    A. D
    Explanation
    After a requisition is generated, the next step in the purchasing cycle is to issue a purchase order. A purchase order is a document that is sent to a supplier, specifying the details of the items or services to be purchased, including quantity, price, and delivery date. It serves as a legally binding contract between the buyer and the supplier. Once the purchase order is issued, the supplier can proceed with fulfilling the order and delivering the goods or services.

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  • 13. 

    Owner's equity is 

    • Revenue less liabilities

    • Revenue less expenses

    • Assets less liabilities

    • Assets less expenses

    Correct Answer
    A. Assets less liabilities
    Explanation
    Owner's equity is calculated by subtracting liabilities from assets. This is because owner's equity represents the residual interest in the assets of the entity after deducting liabilities. In other words, it is the net worth of the owner or shareholders in the business. Therefore, the correct answer is "Assets less liabilities."

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  • 14. 

    In most cases, the fastest way to increase capacity to meet a short-term requirement is to

    • Hire addtl workers

    • Use overtime

    • Acquire more equipment

    • Subcontract work

    Correct Answer
    A. Use overtime
    Explanation
    Using overtime is the fastest way to increase capacity to meet a short-term requirement because it allows the company to utilize its existing workforce for longer hours without the need to hire and train additional workers or invest in acquiring more equipment. Overtime allows for increased productivity within a shorter time frame, ensuring that the short-term requirement is met without incurring significant costs or delays. Subcontracting work or acquiring more equipment may take more time and resources, making overtime the most efficient option in this scenario.

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  • 15. 

    Which of the following defines the sequence of operations to be performed to manufacture a part?

    • Item master

    • Bill of material

    • Routing

    • Shop calendar

    Correct Answer
    A. Routing
    Explanation
    Routing is the correct answer because it defines the sequence of operations to be performed in order to manufacture a part. It outlines the specific steps and processes that need to be followed, including the order in which they should be executed. This ensures that the manufacturing process is efficient and that all necessary tasks are completed in the correct order. The routing also includes information on the resources and equipment required for each operation, as well as any dependencies or constraints that need to be considered.

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  • 16. 

    What is the name of materials used in the production process that do not become partof the product?a. Raw materialsb. Work in processc. Finished goodsd. Maintenance, repair, and operating supplies

    • A

    • B

    • C

    • D

    Correct Answer
    A. D
    Explanation
    Maintenance, repair, and operating supplies are materials used in the production process that do not become part of the final product. These supplies are necessary for the day-to-day operations and maintenance of the production facility, but they are not directly incorporated into the finished goods. Examples of maintenance, repair, and operating supplies include lubricants, cleaning agents, tools, and safety equipment.

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  • 17. 

    Which of the following is an objective of purchasing?a. To keep many sources of supply available to ensure competitive pricingb. To control budgetary expenditures of all employees through sound purchase ordercontrolc. To obtain goods and services of the required quality and right costd. To ensure that goods are always purchased at the lowest price

    • A

    • B

    • C

    • D

    Correct Answer
    A. C
    Explanation
    The objective of purchasing is to obtain goods and services of the required quality and right cost. This means that the focus is on acquiring products and services that meet the necessary standards and specifications, while also considering the cost-effectiveness of the purchase. It is important to strike a balance between quality and cost to ensure that the organization gets the best value for its money.

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  • 18. 

    Which of the following is generally a function of the physical distribution system?

    • Production Activity control

    • Production Planning

    • Packaging

    • Bill of material

    Correct Answer
    A. Packaging
    Explanation
    Packaging is generally a function of the physical distribution system because it involves the process of designing and creating the containers or materials used to protect, store, and transport products. Packaging plays a crucial role in ensuring the safety and integrity of products during distribution, as well as providing information and branding. It also helps in facilitating efficient handling, storage, and transportation of goods, ultimately contributing to the smooth flow of products from the manufacturer to the end consumer.

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  • 19. 

    Which of the following is most likely to be a dependent demand item?

    • A Manufactured subassembly

    • An item in a grocery store

    • A service part

    • An office supply item

    Correct Answer
    A. A Manufactured subassembly
    Explanation
    A manufactured subassembly is most likely to be a dependent demand item because it is a component or part of a larger finished product. The demand for the subassembly is dependent on the demand for the final product it is used in. In other words, the quantity of subassemblies needed is determined by the production requirements of the final product. This is in contrast to independent demand items, such as items in a grocery store, service parts, or office supply items, which have demand that is not directly linked to the demand for other products.

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  • 20. 

    Which of the following would most likely serve as an effective measure of supplier performance?

    • Component price

    • Internal Scrap rate

    • Transportation mode

    • Delivery Time

    Correct Answer
    A. Delivery Time
    Explanation
    Delivery time is the most likely effective measure of supplier performance because it directly reflects the supplier's ability to meet deadlines and fulfill orders on time. It indicates the efficiency and reliability of the supplier in delivering goods or services to the customer. A shorter delivery time implies better performance and customer satisfaction, while delays in delivery can lead to disruptions in production and customer dissatisfaction. Therefore, monitoring and improving delivery time can help assess and enhance supplier performance.

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  • 21. 

    Which of the following production environments (manufacturing strategies) produces the longest delivery lead time?

    • Make-to-order

    • Assemble-to-order

    • Make-to-stock

    • Continuous manufacturing

    Correct Answer
    A. Make-to-order
    Explanation
    Make-to-order production environment produces the longest delivery lead time because products are only manufactured after receiving customer orders. This means that there is no existing inventory and production starts from scratch for each order. This process involves various stages like sourcing raw materials, manufacturing, and shipping, which can take a significant amount of time. In contrast, assemble-to-order and make-to-stock production environments have pre-existing inventory, allowing for quicker delivery times. Continuous manufacturing is a continuous process with minimal interruptions, resulting in shorter lead times compared to make-to-order.

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  • 22. 

    Which of the following is a major objective of materials management?

    • Provide sufficient equitable employment.

    • Provide the required level of customer service.

    • Support cost accounting by decreasing inventory turns.

    • Provide cost information for management decisions.

    Correct Answer
    A. Provide the required level of customer service.
    Explanation
    The major objective of materials management is to provide the required level of customer service. This means ensuring that the right materials are available at the right time and in the right quantity to meet customer demands. By effectively managing materials, companies can ensure timely delivery of products and services to customers, which is crucial for maintaining customer satisfaction and loyalty.

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  • 23. 

    Which of the following is not considered a function of physical distribution?a. Transportationb. Production controlc. Distribution inventoryd. Warehousing

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    Production control is not considered a function of physical distribution. Physical distribution refers to the activities involved in the movement and storage of goods from the point of production to the point of consumption. It includes functions such as transportation, distribution inventory management, and warehousing. Production control, on the other hand, is concerned with managing and controlling the production process itself, ensuring that it runs smoothly and efficiently. It is not directly related to the movement and storage of goods, which are the primary focus of physical distribution.

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  • 24. 

    Which of the following statements is best regarding employee empowerment?a. Management is relieved of the responsibility for decisions the company makes.b. Employees are empowered to set their wage rates and hours of work.c. Line employees are given more authority to make decisions.d. Decision-making power is concentrated in a small, upper-level management group.

    • A

    • B

    • C

    • D

    Correct Answer
    A. C
    Explanation
    Employee empowerment refers to giving employees more authority and autonomy to make decisions. Option c states that line employees are given more authority to make decisions, which aligns with the concept of employee empowerment. This means that employees at the operational level are entrusted with decision-making power, rather than it being concentrated in a small upper-level management group (option d). Options a and b are incorrect as they do not accurately describe employee empowerment.

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  • 25. 

    A forecast is typically more accurate for

    • 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

    Correct Answer
    A. Groups of items rather than for individual items
    Explanation
    A forecast is typically more accurate for groups of items rather than for individual items because when forecasting for a group, the variations and uncertainties associated with individual items tend to cancel each other out. By considering the collective behavior of a group, the forecast can better capture the overall trend and patterns, resulting in a more accurate prediction. On the other hand, forecasting for individual items can be more challenging as they may exhibit unique characteristics and random fluctuations that are difficult to predict accurately.

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  • 26. 

    Product A is made from components B and C. Component B is made from parts D and E. Which items should be forecast?

    • Only A

    • A B and C

    • D and E

    • B C D and E

    Correct Answer
    A. Only A
    Explanation
    The only item that should be forecasted is A. This is because A is the final product and the demand for A will determine the demand for its components B and C. The parts D and E are not directly related to the forecast for A, as they are only used in the production of component B. Therefore, forecasting only A is sufficient to determine the overall demand for the product.

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  • 27. 

    Which forecasting technique takes the average demand for some past number of periods? a. b. c. d.

    • Trend time average

    • Moving average

    • Demand smoothing

    • Qualitative analysis

    Correct Answer
    A. Moving average
    Explanation
    The correct answer is Moving average. This forecasting technique involves taking the average demand for a certain number of past periods. It is useful for smoothing out fluctuations in demand and identifying trends over time. By calculating the average, it provides a more stable estimate of future demand.

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  • 28. 

    What is the portion of inventory or production that is not committed to customerorders called?a. Free stockb. Available-to-promisec. Excess productiond. Waste

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    The portion of inventory or production that is not committed to customer orders is called "available-to-promise." This refers to the amount of stock that is available for immediate delivery to fulfill new customer orders. It represents the quantity that can be promised to customers without affecting existing commitments or causing delays in production.

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  • 29. 

    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

    • 130 minutes

    • 1000 minutes

    • 1100 minutes

    • 1120 minutes

    Correct Answer
    A. 1120 minutes
    Explanation
    The scheduled operation time for 100 units can be calculated by adding the setup time to the total run time for 100 units. The setup time is given as 2 hours, which is equal to 120 minutes. The run time per piece is 10 minutes, so for 100 units, the total run time would be 100 * 10 = 1000 minutes. Adding the setup time and the run time, we get 120 + 1000 = 1120 minutes. Therefore, the scheduled operation time for 100 units is 1120 minutes.

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  • 30. 

    Which of the following best describes a Kanban system?

    • A quality conrol system

    • Push production

    • Requires Operator flexibility

    • Visual Reorder point

    Correct Answer
    A. Visual Reorder point
    Explanation
    A Kanban system is a visual reorder point that helps manage inventory and production by using visual signals to indicate when and how much to replenish. It is a lean manufacturing technique that aims to reduce waste and improve efficiency by ensuring that materials and products are only produced and delivered when needed. This system allows for better inventory control and helps prevent overproduction or stockouts.

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  • 31. 

    Safety stock will depend on which of the following?a. Variability of demandb. Cost of carrying inventoryc. Cost of placing an orderd. Product obsolescence

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    Safety stock is a buffer stock held by a company to protect against uncertainties in demand or supply. It is used to ensure that the company does not run out of stock and can meet customer demand even during unexpected fluctuations. The variability of demand directly affects the amount of safety stock required. Higher variability in demand would require a higher safety stock level to ensure that the company can fulfill customer orders and prevent stockouts. Therefore, the correct answer is a) Variability of demand.

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  • 32. 

    What type of inventory record system keeps a continuous account of transactions asthey occur?a. Perpetual inventory systemb. Periodic inventory systemc. Two-bin systemd. Safety stock system

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    A perpetual inventory system keeps a continuous account of transactions as they occur. This means that every time a purchase or sale is made, the inventory records are immediately updated to reflect the change. This system provides real-time information on the quantity and value of inventory on hand, allowing for better inventory management and more accurate financial reporting. In contrast, a periodic inventory system only updates inventory records periodically, such as at the end of each month or year. The two-bin system and safety stock system are not inventory record systems, but rather methods used to manage inventory levels.

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  • 33. 

    Which of the following are primary activities of manufacturing planning and control?

    • Inventory management and cost information

    • Sales support and cost information

    • Production planning and inventory management

    • Sales support, implementation, and control

    Correct Answer
    A. Production planning and inventory management
    Explanation
    The primary activities of manufacturing planning and control include production planning and inventory management. Production planning involves determining the quantity and timing of production to meet customer demand, while inventory management involves managing the levels of raw materials, work-in-progress, and finished goods to ensure smooth operations and minimize costs. These activities are crucial for effective manufacturing operations and ensuring that production meets customer demand while minimizing inventory holding costs.

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  • 34. 

    Which of the following is the performance measure that relates to daily work routines, such as cycle time and utilization?

    • Tactical

    • Strategic

    • Operational

    • Reliability

    Correct Answer
    A. Operational
    Explanation
    Operational performance measures are related to daily work routines, such as cycle time and utilization. These measures focus on the efficiency and effectiveness of the day-to-day operations of an organization. They help to track and improve the performance of operational processes and activities. Tactical and strategic performance measures, on the other hand, are more concerned with long-term planning and decision-making. Reliability, in this context, is not directly related to daily work routines and is not the correct answer.

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  • 35. 

    What important assumption is made about quantitative forecasting methods? a. b. c. d.

    • The past is a valid indicator of the future.

    • Demand trend is seldom linear.

    • Seasonal variations are small.

    • Random variations are small.

    Correct Answer
    A. The past is a valid indicator of the future.
    Explanation
    Quantitative forecasting methods assume that the past is a valid indicator of the future. This means that historical data can be used to predict future trends and patterns. By analyzing past data, such as sales figures or demand patterns, these methods can make predictions about future demand or sales. This assumption is based on the belief that historical patterns and trends will continue to hold true in the future.

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  • 36. 

    What is the name given to a scheduling system in which the last operation on a routingis scheduled first and for completion on the due date?a. Forward schedulingb. Backward schedulingc. Infinite schedulingd. Finite scheduling

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    Backward scheduling is the name given to a scheduling system in which the last operation on a routing is scheduled first and for completion on the due date. This approach allows for better planning and coordination of tasks, as it ensures that all operations are completed in a timely manner leading up to the due date. By scheduling the last operation first, any potential delays or issues can be identified and addressed early on, minimizing the risk of missing the deadline.

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  • 37. 

    If the annual cost of goods sold is $10 million and the average inventory is $2.5million, what is the inventory turnover ratio?a. $7.5 millionb. .25c. 2.5d. 4

    • A

    • B

    • C

    • D

    Correct Answer
    A. D
    Explanation
    The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory. In this case, the cost of goods sold is $10 million and the average inventory is $2.5 million. Therefore, the inventory turnover ratio would be 10 million divided by 2.5 million, which equals 4. This means that the inventory is being sold and replaced four times in a year.

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  • 38. 

    Which of the following is a major objective of distribution inventory management?a. To provide the required level of customer serviceb. To minimize the costs of warehouse spacec. To always have enough of everything on hand so there are no stockoutsd. To minimize labor costs

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    A major objective of distribution inventory management is to provide the required level of customer service. This means ensuring that the right products are available in the right quantities at the right time to meet customer demand. By effectively managing inventory, companies can avoid stockouts and delays in delivering products to customers, thus improving customer satisfaction and loyalty. This objective focuses on meeting customer needs and expectations, rather than minimizing costs or labor expenses.

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  • 39. 

    Which of the following statements is true regarding Pareto analysis?a. It separates the significant few from the trivial many.b. It uses the six categories of quality.c. It is an extension of the 50-50 rule of quality.d. It assigns weighted costs associated with internal versus external failure costs.

    • A

    • B

    • C

    • D

    Correct Answer
    A. A
    Explanation
    Pareto analysis is a technique used to separate the significant few from the trivial many. It is based on the Pareto principle, which states that a small number of causes are responsible for a large percentage of the effects. By identifying and focusing on these significant few causes, Pareto analysis helps prioritize efforts and resources for maximum impact. This technique does not use the six categories of quality, is not an extension of the 50-50 rule of quality, and does not assign weighted costs associated with internal versus external failure costs.

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  • 40. 

    A primary advantage of electronic data interchange (EDI) with suppliers is that it

    • Reduces paperwork

    • Bypasses the buyer

    • Employs the latest technology

    • Supports unlimited forms of communications

    Correct Answer
    A. Reduces paperwork
    Explanation
    Electronic data interchange (EDI) with suppliers reduces paperwork by eliminating the need for manual data entry and physical documents. Instead of exchanging paper-based documents like purchase orders and invoices, EDI allows for the electronic transfer of information between trading partners. This not only saves time and resources but also reduces the risk of errors and delays associated with manual processes. Additionally, EDI enables real-time communication and automation, improving efficiency and streamlining supply chain operations.

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  • 41. 

    The demand at a workstation in a lean system typically comes from

    • A pull signal

    • A dispatch list

    • The production plan

    • A control chart

    Correct Answer
    A. A pull signal
    Explanation
    In a lean system, the demand at a workstation typically comes from a pull signal. This means that the workstation only produces items when there is a demand for them from the next process or customer. The pull signal can be in the form of a kanban card or any other visual indicator that signals the need for more items to be produced. This approach helps to minimize waste and ensures that production is driven by actual demand rather than forecasts or arbitrary targets.

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  • 42. 

    Which of the following is a good measure of customer focus?

    • High organizational turnover

    • High quality levels

    • Many performance measures

    • Many supplier contracts

    Correct Answer
    A. High quality levels
    Explanation
    High quality levels are a good measure of customer focus because they indicate that the organization is dedicated to delivering products or services that meet or exceed customer expectations. When a company focuses on maintaining high quality levels, it shows that they prioritize customer satisfaction and are committed to providing a positive experience. This can lead to increased customer loyalty, repeat business, and positive word-of-mouth referrals.

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  • 43. 

    Which of the following is the best statement about the general principles of forecasting?

    • Forecasts are more accurate for individual items than for groups of items.

    • Forecasts are more accurate for distant periods of time.

    • Every forecast should include an estimate of error.

    • Forecasts are usually accurate.

    Correct Answer
    A. Every forecast should include an estimate of error.
    Explanation
    Every forecast should include an estimate of error because forecasting involves predicting future events based on historical data and assumptions, which are prone to uncertainty and variability. Including an estimate of error helps to quantify the level of uncertainty associated with the forecasted values, allowing decision-makers to make more informed decisions and take appropriate actions. It also helps in evaluating the accuracy and reliability of the forecast by comparing the actual outcomes with the predicted values and identifying any potential biases or inaccuracies in the forecasting process.

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  • 44. 

    Which of the following statements is true?a. The same part number can be used to identify similar products.b. A part has one, and only one, part number.c. The same part on different bills of material will have a different number.d. An item can be either a parent or a component, but not both.

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    A part has one, and only one, part number. This means that each part is uniquely identified by a specific part number and no other part can have the same number.

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  • 45. 

    A work center consists of 2 machines working 8 hours a day and 5 days a week.Historically, utilization has been 80%, and efficiency has been 90%. To the nearesthour, what is the rated capacity?a. 80 hoursb. 58 hoursc. 40 hoursd. 30 hours

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    The rated capacity can be calculated by multiplying the number of machines, the number of hours worked per day, and the number of days worked per week. In this case, there are 2 machines, they work 8 hours a day, and 5 days a week. Therefore, the rated capacity is 2 machines * 8 hours/day * 5 days/week = 80 hours. However, the question asks for the nearest hour, so the answer is rounded to the nearest hour, which is 58 hours.

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  • 46. 

    A fishbone diagram is an example of which of the following?a. A cost buildup methodb. A method to determine root causec. Capability analysisd. Another name for Pareto analysis

    • A

    • B

    • C

    • D

    Correct Answer
    A. B
    Explanation
    A fishbone diagram is a method used to determine the root cause of a problem. It is a visual tool that helps identify all possible causes of a problem by categorizing them into different branches. By analyzing these causes, one can determine the underlying reason for the problem and develop effective solutions. Therefore, option b is the correct answer as it accurately describes the purpose and function of a fishbone diagram.

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  • 47. 

    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.

    • 300 un

    • 900

    • 1,200

    • 2,000

    Correct Answer
    A. 1,200
    Explanation
    The order point is the inventory level at which a new order should be placed to replenish stock. It is calculated by multiplying the lead time by the average demand per week and adding the safety stock. In this case, the lead time is 6 weeks and the average demand is 150 units per week. So, the lead time demand is 6 weeks x 150 units/week = 900 units. Adding the safety stock of 300 units, the order point is 900 units + 300 units = 1,200 units.

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  • 48. 

    Total employee involvement will result in an increase in which of the following roles for first-line supervision?--- MAYBE?

    • Controlling

    • Coaching

    • Disciplining

    • Reporting

    Correct Answer
    A. Coaching
    Explanation
    Total employee involvement will result in an increase in the coaching role for first-line supervision. When employees are actively engaged and involved in their work, they are more likely to seek guidance, support, and feedback from their supervisors. This creates an opportunity for supervisors to take on a coaching role, providing guidance, mentoring, and development opportunities to help employees improve their skills and performance. Coaching becomes essential in nurturing and empowering employees to reach their full potential and achieve organizational goals.

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  • 49. 

    Under which of the following circumstances will firms generally make-to-stock?

    • Demand is unpredictable

    • Many product options exist

    • Required delivery times are shorter than the time needed to make the product

    • Customers require special engineering

    Correct Answer
    A. Required delivery times are shorter than the time needed to make the product
    Explanation
    For A and B... make to order

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Quiz Review Timeline (Updated): Aug 14, 2024 +

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  • Current Version
  • Aug 14, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Dec 15, 2009
    Quiz Created by
    Agafish
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