2024

APICS
CPIM-BSP Exam
CPIM

Questions & Answers

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Exam Dumps 1/41

➢ TOTAL QUESTIONS: 155

Question: 1
The overall objective of an integrated supply chain can best be described as the achievement of:

A. decreased lead time.

B. increased supplier partnerships.
C. an efficient flow of materials and information.
D. an efficient flow of production.

Answer: C

Question: 2
A company's cost of goods sold would be found on which of the following financial documents?

A. Balance sheet
B. Income statement
C. Cash flow statement
D. Performance statement

Answer: B

Question: 3
In an assemble-to-order production environment, the master production schedule contains:

A. standard items.
B. finished items.
C. raw materials.
D. subassemblies.

Answer: D

Question: 4
Which of the following manufacturing systems involves the creation of one unit or a small number of
units?

A. Flow manufacturing
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B. Intermittent manufacturing
C. Project manufacturing
D. Continuous manufacturing

Answer: C

Question: 5
After a quality improvement program has been successfully implemented, the greatest cost of
controlling quality typically is the cost of:

A. failure.
B. appraisal.
C. prevention.
D. inspection.

Answer: C

Question: 6
In the income statement, the cost of goods sold is related to the:

A. sales dollars.
B. total inventory dollars.
C. marketing expenses.
D. manufacturing expenses.

Answer: D

Question: 7
Manufacturing overhead includes which of the following types of costs?

A. Interest expense
B. Supervision
C. Direct labor
D. Direct material

Answer: B

Question: 8
The question below is based on the following cost information:
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What is the carrying cost?

A. 14%
B. 16%
C. 20%
D. 25%

Answer: D

Question: 9
Which of the following concepts could a firm implement to reduce defects?

A. Hansei
B. Jidoka
C. Muri
D. Heijunka

Answer: B

Question: 10
Inventory turns is an appropriate performance measure for which of the following functions?

A. Material control
B. Activity-based costing control
C. Total quality management
D. Flexible manufacturing

Answer: A

Question: 11
The primary purpose of enterprise resources planning is to:

A. focus on the manufacturing function within an organization.

B. integrate an approach to business management.
C. use external knowledge to seek an internal advantage.
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D. provide data protection along the supply chain.

Answer: B

Question: 12
Which of the following techniques typically eliminates common errors?

A. Practical kaizen training

B. Kaizen
C. Poka-yoke
D. Kanban

Answer: C

Question: 13
Which of the following characteristics is most distinctive of lean manufacturing?

A. Teamwork
B. Continuous improvement
C. Qualitative measurements
D. Bottom-line results

Answer: B

Question: 14
Which of the following manufacturing environments presents the greatest complexity in promising
completion dates for customer orders?

A. Flow
B. Repetitive
C. Continuous
D. Intermittent

Answer: D

Question: 15
Which of the following types of layouts is most efficient in a lean production environment?

A. Islands
B. Connected islands
C. Functional layout
D. Cells
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Answer: D

Question: 16
The lean production concept works best in which of the following manufacturing environments?

A. Make-to-order
B. Intermittent
C. Project
D. Flow

Answer: D

Question: 17
The principal objective of total quality management in manufacturing is to:

A. implement statistical process control.

B. meet the expectations of the customer.
C. reduce the costs of failure.
D. eliminate inspections.

Answer: B

Question: 18
Which practice focuses on root cause analysis?

A. Statistical process control

B. Five whys
C. Scatter diagram
D. Pareto chart

Answer: B

Question: 19
Which of the following production environment strategies requires unique design or significant
customization?

A. Make-to-order
B. Assemble-to-order
C. Make-to-stock
D. Engineer-to-order
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Answer: D

Question: 20
The theory of constraints is most effective when:

A. demand environments are unstable.

B. demand environments are stable.
C. the constraint cannot be managed easily.
D. the constraint cannot be identified easily.

Answer: B

Question: 21
Which of the following manufacturing processes would be characterized by a narrow range of
standard products, low direct labor costs, and a high level of technical support for manufacturing?

A. Jobbing
B. Intermittent
C. Flow
D. Project

Answer: C

Question: 22
Which of the following statements characterizes an intermittent manufacturing environment?

A. Work center load is predictable.

B. Routings for all products are the same.
C. Work centers are organized by function.
D. Kanban is the most appropriate scheduling method.

Answer: C

Question: 23

Gemba is a Japanese word meaning:

A. shop floor.
B. shop order.
C. shop packet.
D. shop traveler.
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Answer: A

Question: 24
Which of the following terms refers to the practice of stopping the production line when a defect
occurs?

A. Haiku
B. Arigato
C. Poka-yoke
D. Jidoka

Answer: D

Question: 25
Reducing set up time will affect item lead time and throughput in which of the following ways?

A. Lead time will increase, throughput will decrease

B. Lead time will increase, throughput will increase
C. Lead time will decrease, throughput will increase
D. Lead time will decrease, throughput will decrease

Answer: C

Question: 26
Which of the following tools is considered to be one of the seven quality tools?

A. Gantt chart
B. Input/output chart
C. Control chart
D. Capacity chart

Answer: C

Question: 27
A firm offers products configured from a large number of stocked options. Which of the following
production environments is the firm most likely to use?

A. Engineer-to-order
B. Make-to-order
C. Assemble-to-order
D. Make-to-stock
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Answer: C

Question: 28
Which of the following items is considered an external failure cost?

A. Warranty cost
B. Incoming inspection
C. Prevention cost
D. Appraisal cost

Answer: A

Question: 29
Which of the following is a graphical representation of a frequency distribution?

A. Cause-and-effect diagram
B. Pareto analysis
C. Scatter diagram
D. Histogram

Answer: D

Question: 30
Which plant type describes a product at one stage that can be transformed into several distinct
products at the next stage (divergent points)?

A. A-Plant
B. I-Plant
C. T-Plant
D. V-Plant

Answer: D

Question: 31
Which of the following issues would be of greatest concern for a company choosing to reduce its
finished goods inventory?

A. Long production changeover time

B. Customer service expectations
C. Product quality requirements
D. Product shelf life constraints
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Answer: B

Question: 32
Which of the following factors is included in cost of goods sold?

A. Revenue
B. General and administrative expenses
C. Overhead
D. Standard cost

Answer: C

Question: 33
Having the needed materials within easy reach of a subassembly process eliminates waste of:

A. motion.
B. transportation.
C. making defects.
D. stocks.

Answer: A

Question: 34
Having bolts and tools at the point of use on the automobile assembly line eliminates the waste of :

A. waiting.
B. overproduction.
C. making defects.
D. stocks.

Answer: A

Question: 35
A production rate based on customer demand is called:

A. cycle time.
B. takt time.
C. lead time.
D. queue time.

Answer: B
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Question: 36

Which of the following types of manufacturing processes would tend to have the lowest work in
process (WIP) inventory?

A. Project
B. Intermittent
C. Batch
D. Flow

Answer: D

Question: 37
An electronic board that provides visibility on the production floor is:

A. andon.
B. anova.
C. ANSI.
D. alpha factor.

Answer: A

Question: 38
The heijunka philosophy can best be described as:

A. level production.
B. make-to-stock production.
C. a chase production strategy.
D. produce to stock production.

Answer: A

Question: 39

Which of the following situations is characteristic of a make-to-stock environment?

A. Work in process (WIP) represents the largest cost of inventory.

B. The impact of technology on the production process will be large.
C. The master schedule is stated at the finished product level.
D. Customer involvement is typically very high.

Answer: C
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Question: 40

Which of the following factors is most likely to affect the demand for a company's services or
products?

A. The sales and operations plan

B. Demand forecasting
C. Resource availability
D. Economic conditions

Answer: D

Question: 41
Which of the following describes a competitive characteristic that a firm must exhibit to be
considered as a supplier in a market?

A. Marketing research
B. Manufacturing automation
C. Order qualifier
D. Order winner

Answer: C

Question: 42
The question below is based on the following information:

What is the forecast for period 34 if a simple three-period moving average is used?

A. 312
B. 313
C. 318
D. 325

Answer: C

Question: 43
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Which of the following statements is true regarding the concept of independent demand?

A. These items are usually raw materials.

B. The requirements for these items are usually forecasted.
C. The demand for these items must be calculated.
D. The demand for these items is related to demand for other items.

Answer: B

Question: 44
Which of the following factors most likely will impact the demand for a firm's products or services?

A. Forecast accuracy
B. Order processing system
C. Competition
D. Planning horizon

Answer: C

Question: 45
The contribution made by an operation to the final usefulness of a product is known as:

A. the customer service level.

B. value-added.
C. the cost of quality.
D. an order winner.

Answer: B

Question: 46
Characteristics that cause customers to consider a company's products or services are called:

A. order qualifiers.
B. order winners.
C. product configurations.
D. product specifications.

Answer: A

Question: 47
When demand is uncertain, what is the most appropriate action to take?
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A. Recalculate safety stock

B. Increase order quantity
C. Change method of transportation
D. Increase number of warehouses for distribution

Answer: A

Question: 48
An order winner is a competitive characteristic that:

A. is universal between customers and markets.

B. differentiates among potential customers.
C. a company must exhibit to be considered a potential supplier.
D. a company must exhibit to gain new sales.

Answer: D

Question: 49
Service parts needs are most often determined by:

A. bills of material explosion.

B. forecasts based on prior demand.
C. material requirements planning (MRP) logic calculations.
D. analysis of lead-time requirements.

Answer: B

Question: 50
Which of the following functional areas decides the product to be supplied and the customers to be
served?

A. Engineering
B. Finance
C. Manufacturing
D. Marketing

Answer: D

Question: 51
Which of the following items is a source of independent demand?

A. Customer orders for finished products

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B. Subassembly requirements from material requirements planning

C. Raw material requirements from material requirements planning
D. Protective packaging for shipping customer orders

Answer: A

Question: 52
Which of the following calculations is a major component that is used with extrinsic forecasting?

A. Moving average
B. Exponential smoothing
C. A seasonal index
D. An economic indicator

Answer: D

Question: 53
The question below is based on the following information:

What is the mean absolute deviation of demand for the data?

A. 1
B. 3
C. 5
D. 101

Answer: B

Question: 54
Which of the following forecasting techniques reviews a company's sales history?

A. Qualitative
B. Delphi
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C. Extrinsic
D. Intrinsic

Answer: D

Question: 55
Which of the following forecasting techniques eliminates the need to keep months of historical data?

A. Exponential smoothing
B. Seasonal index
C. Delphi
D. Trend

Answer: A

Question: 56
A 5-year decline in demand for diapers most closely represents which of the following types of
forecast patterns?

A. Irregular
B. Cyclic
C. Trend
D. Seasonal

Answer: C

Question: 57
Which of the following smoothing constants places the most weight on the old forecast?

A. 0.4
B. 0.3
C. 0.2
D. 0.1

Answer: D

Question: 58
Which demand management activity includes processing a customer request and making material
available for production or shipping?

A. Forecasting
B. Order processing
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C. Providing available-to-promise dates

D. Communicating with the marketplace

Answer: B

Question: 59
Which of the following forecast inputs is considered to be intrinsic data?

A. Demographic
B. Econometric
C. Historical sales
D. Market survey

Answer: C

Question: 60
A primary purpose of Quality Function Deployment is to:

A. calculate performance limits.

B. determine marketing strategies.
C. direct product design.
D. set pass/fail criteria.

Answer: C

Question: 61
A distributor provides customer service by improving which of the following market driven factors?

A. Availability
B. Design
C. Shelf life
D. Quality

Answer: A

Question: 62
Which of the following situations requires the largest amount of safety stock based on demand
variability and replenishment lead time?

A. Low variability, short replenishment lead time.

B. Low variability, long replenishment lead time.
C. High variability, short replenishment lead time.
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D. High variability, long replenishment lead time.

Answer: D

Question: 63
The portion of a firm's inventory and planned production that is not already committed is referred to
as:

A. planned order receipts.

B. projected inventory balance.
C. master production schedule due date.
D. available-to-promise.

Answer: D

Question: 64
A product has a forecast of 200 units a month. The actual demand for the past 6 months has been
195, 210, 205, 190, 220, and 225. Calculate the tracking signal for this product's forecast.

A. 6
B. 7.5
C. 45
D. 75

Answer: A

Question: 65
A product has a forecast of 200 units a month. The actual demand for the past 6 months has been
195, 210, 205, 190, 220, and 225. Which of the following values reflects the mean absolute deviation
for this data?

A. 7.5
B. 12.5
C. 45
D. 75

Answer: B

Question: 66
A manufacturer's market is highly dependent upon customers selecting standard options at the time
of placing an order. Which of the following manufacturing strategies is best suited to compete in this
market?
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A. Engineer-to-order
B. Make-to-order
C. Assemble-to-order
D. Make-to-stock

Answer: C

Question: 67
In Quality Function Deployment, "competitive evaluation" refers to:

A. analyzing current financial health.

B. considering global market potential.
C. ranking industry rivals' position.
D. comparing perceived product quality.

Answer: D

Question: 68
An extreme change in demand in the supply position upstream generated by a small change in
demand downstream in the supply chain is called the:

A. efficiency variance.
B. bullwhip effect.
C. estimate of error.
D. stockout probability.

Answer: B

Question: 69
The primary advantage of process flexibility is the:

A. ease of implementing engineering changes.

B. responsiveness to volume or mix changes.
C. decrease in labor costs.
D. reduced need for skills.

Answer: B

Question: 70
Which of the following documents specifies how an item is to be manufactured?
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A. Routing
B. Bill of labor
C. Dispatch list
D. Item master

Answer: A

Question: 71
If the quantity ordered equals the quantity required in a time bucket, which of the following lot-
sizing rules has been used?

A. Lot-for-lot
B. Fixed order quantity
C. Order "N" periods supply
D. Economic order quantity (EOQ)

Answer: A

Question: 72
The question below is based on the following illustration of product parts:

Which of the following items are components?

A. Y and Z only
B. 1, 2, and 3 only
C. Y, Z, 1, 2, and 3 only
D. X, Y, Z, 1, 2, and 3

Answer: C

Question: 73
Which of the following capacity management techniques is used to support the production plan?
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A. Resource planning
B. Capacity requirements planning
C. Rough-cut capacity planning
D. Input/output control

Answer: A

Question: 74
Which of the following techniques is best for monitoring loads and capacities?

A. Exponential smoothing
B. Discrete lot sizing
C. Input/output control
D. Rough-cut capacity planning

Answer: C

Question: 75
Material requirements planning requires which of the following files to plan requirements?

A. Standard cost
B. Bill of materials
C. Routing
D. Work center

Answer: B

Question: 76
Which of the following processes converts the master production schedule into resource
requirements that are then compared to the available resources?

A. Capacity requirements planning

B. Rough-cut capacity planning
C. Material requirements planning
D. Resource planning

Answer: B

Question: 77
Which of the following statements about strategic planning is true?

A. It is focused on the master production schedule (MPS) and the material requirements plan.
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B. It helps integrate the plans of marketing and production.

C. It involves primarily personnel development and acquisition of long-lead-time materials.
D. It is top-level planning that is not tied to other planning activities.

Answer: B

Question: 78
Which of the following phrases best defines a production plan?

A. The plan for the production and purchase of the components used in making the items in the
master production schedule
B. The broad direction of the firm, the kind of business-product lines, and markets the firm wants in
the future
C. The quantities of each product group that must be produced in each period, desired inventory
levels, resources required in each period, and the availability of resources needed
D. The flow of work through the factory through input/output analysis

Answer: C

Question: 79
What is the output of sales and operations planning?

A. Production plan
B. Master production schedule
C. Sales plan
D. Production order

Answer: A

Question: 80
Firm planned orders in a material requirements planning (MRP) system are used to:

A. protect against computer rescheduling.

B. reduce the use of forecasts.
C. increase accuracy in the MRP system.
D. validate capacity available.

Answer: A

Question: 81
Which of the following measures should a company focus on to reduce variation in the product?
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A. Mode
B. Mean
C. Median
D. Standard deviation

Answer: D

Question: 82
Material requirements planning provides recommendations for which of the following processes?

A. Shop orders and capacity

B. Capacity and purchase orders
C. Purchase orders and shop orders
D. Routing and lead times

Answer: C

Question: 83
Effective inventory management should lead to which of the following?

A. Higher inventory turns

B. Higher product quality
C. Lower cost of capital
D. Elimination of inventory cycle counting

Answer: A

Question: 84
Production activity control receives authorization to release work orders from:

A. the material requirements plan.

B. the master production schedule.
C. production planning.
D. input/output control.

Answer: A

Question: 85
Which of the following circumstances will cause a decrease in a work center's utilization?

A. Working overtime
B. Working below standard
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C. Lack of materials
D. Rework operations

Answer: C

Question: 86
The ratio of actual output to standard output is defined as:

A. demonstrated capacity.
B. rated capacity.
C. utilization.
D. efficiency.

Answer: D

Question: 87
In which of the following environments is order-fill rate of primary importance to customer delivery
expectations?

A. Make-to-stock
B. Design-to-order
C. Assemble-to-order
D. Make-to-order

Answer: A

Question: 88
Which of the following variables best represents a strategic performance measure?

A. Revenue growth
B. Machine utilization
C. Work center capacity
D. Cycle time

Answer: A

Question: 89
Which of the following factors can negatively influence indirect costs such as production planning,
purchasing, and inventory management?

A. Standardized parts
B. Low efficiency production equipment
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C. Poor product design

D. Time to market

Answer: C

Question: 90
Which of the following is an input to capacity requirements planning (CRP)?

A. Bills of material (BOM)

B. Lot-sizing rules
C. Open shop orders
D. Standard cost

Answer: C

Question: 91
Which of the following terms refers to a sequence of end items to produce for specific customers'
orders in a make-to-order or assemble-to-order environment?

A. Master schedule
B. Final assembly schedule
C. Dispatch list
D. Input/output control

Answer: B

Question: 92
Which of the following statements describes the difference between capacity requirements planning
and material requirements planning ?

A. Material requirements planning ignores capacity constraints.

B. Capacity requirements planning accounts for material.
C. Material requirements planning is confined by capacity constraints.
D. Capacity requirements planning only accounts for critical resources.

Answer: A

Question: 93
Which of the following plans generally includes an organization's explicit mission, goals, and
objectives, along with the specific actions needed to achieve those goals and objectives?

A. Marketing
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B. Business
C. Strategic
D. Financial

Answer: C

Question: 94
Which of the following plans is a statement of long-range strategy and revenue, cost, and profit
objectives usually accompanied by budgets, a projected balance, and cash flow statement?

A. Strategic
B. Business
C. Sales and operations
D. Budget

Answer: B

Question: 95
Backward scheduling begins with which of the following dates?

A. Order receipt
B. Order due
C. Component availability
D. Supplier delivery

Answer: B

Question: 96
Which of the following plans is translated into synchronized functional plans through the sales and
operations planning process?

A. Strategic
B. Marketing
C. Business
D. Financial

Answer: C

Question: 97
When determining a make or buy decision, reasons to buy out would include:

A. accommodating large changes in volume.

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B. maximizing resource utilization.

C. protecting confidential information.
D. maintaining workforce.

Answer: A

Question: 98
Which of the following considerations should be included in product design?

A. Manufacturing strategy
B. Product pricing
C. Environmental sensitivity
D. Target markets

Answer: C

Question: 99
The primary purpose of sales and operations planning is to:

A. track and improve forecast accuracy within sales and marketing.

B. provide enough lead time for operations to acquire needed resources.
C. provide periodic updates on overall performance to top management.
D. link strategic and tactical plans across the organization.

Answer: D

Question: 100
At which of the following levels does sales and operations planning take place?

A. Component
B. Finished goods
C. Product family
D. Market

Answer: C

Question: 101
Which of the following information is the key output of rough-cut capacity planning?

A. Line balancing
B. Critical resource availability
C. Inventory objectives by product line
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D. Capacity requirements plan

Answer: B

Question: 102
Part A is made from two Y’s and one X. An order is received for 50 A’s and there are 30 A’s in stock.
What is the net requirement for X?

A. 20
B. 40
C. 50
D. 100

Answer: A

Question: 103
Which of the following terms refers to that which "pulls" production to the constraint for processing?

A. Drum
B. Buffer
C. Rope
D. Kanban

Answer: C

Question: 104
Which of the following techniques deals with analysis and planning of logistics and manufacturing
during various time periods?

A. Advanced planning and scheduling

B. Aggregate planning
C. Aggregate forecast
D. Distribution Requirements Planning

Answer: A

Question: 105
Which of the following systems typically involves design while manufacturing is occurring?

A. Flow
B. Intermittent
C. Project
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D. Engineer

Answer: C

Question: 106
A work center has 2 machines that are operated 16 hours a day for 5 days a week. Historically, the
utilization has been 85% and the efficiency 105%. What is the rated capacity for this work center?
(Rounded)

A. 71
B. 99
C. 130
D. 143

Answer: D

Question: 107
Which of the following scheduling techniques reduces manufacturing lead times?

A. Backward
B. Finite
C. Forward
D. Overlapped

Answer: D

Question: 108
Earliest job due date is an example of:

A. dispatching.
B. infinite scheduling.
C. a chase strategy.
D. available-to-promise.

Answer: A

Question: 109

A manufacturer needs to monitor and balance the flow of work between work centers. Which of the
following techniques would address this need?

A. Dispatching
B. Drum-buffer-rope
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C. Critical ratio
D. Input/output control

Answer: D

Question: 110
Which of the following four plant types for the theory of constraints processes one raw material into
one final product?

A. V-plant
B. A-plant
C. T-plant
D. I-plant

Answer: D

Question: 111
Which of the following documents is generated to show required components for a shop order?

A. Master production schedule

B. Bill of materials
C. Picking list
D. Advance shipping notice

Answer: C

Question: 112
Which of the following processes commits orders against available capacity as well as inventory?

A. Available-to-promise
B. Capable-to-promise
C. Engineered-to-order
D. Make-to-order

Answer: B

Question: 113

Which of the following inventory classifications would include semi-finished goods at an outside
supplier?

A. Maintenance, repair, and operating supplies

B. Finished goods
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C. Raw materials
D. Work in process

Answer: D

Question: 114
Which of the following functions of inventory exists to address unpredictable supply or demand?

A. Fluctuation
B. Anticipation
C. Hedge
D. Transportation

Answer: A

Question: 115
The question below is based on the following information:

What is the average annual transit inventory in units?

A. 55
B. 110
C. 548
D. 658

Answer: C

Question: 116
The ABC approach to inventory management is used primarily to:

A. minimize transportation and material handling costs.

B. classify inventory according to the total amounts of inventory required.
C. optimize the amount of inventory for all classifications of inventory.
D. establish the degree of inventory control required.

Answer: D
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Question: 117

Which of the following types of inventory is characterized by item quantity gradually being depleted
then replenished?

A. Decoupling
B. Cycle
C. Pipeline
D. Anticipation

Answer: B

Question: 118
Economic order quantity (EOQ) is best applied when the:

A. product is make-to-order.
B. product shelf life is short.
C. production process is continuous.
D. consumption rate is uniform.

Answer: D

Question: 119
Which of the following actions most likely will serve to reduce economic lot size?

A. Decreasing the number of items

B. Decreasing the unit cost of items
C. Increasing the cost of ordering items
D. Increasing the cost of carrying inventory

Answer: D

Question: 120
Consolidating shipments and reducing the frequency of pickups help to reduce which of the
following types of costs?

A. Warehousing and inspection

B. Import duties and processing
C. Total transportation
D. Capital

Answer: C
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Question: 121

Which of the following outcomes is a benefit of using a purchase requisition?

A. Purchase pricing being correct

B. Improved accuracy of information
C. Assurance that delivery dates are met
D. Terms and conditions being followed

Answer: B

Question: 122
Vendor-managed inventory is most appropriate for which of the following types of products?

A. Critical components with high value

B. Standard design products with low value
C. Long lead-time components with medium value
D. Complex design products with low value

Answer: B

Question: 123
Which of the following documents or records typically is required by accounting, receiving,
purchasing, and the supplier?

A. Bill of lading
B. Purchase requisition
C. Receiving report
D. Purchase order

Answer: D

Question: 124
Which of the following considerations is an advantage of sourcing from multiple suppliers?

A. Competition
B. Opportunity for partnering
C. Better quality
D. Shorter lead times

Answer: A
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Question: 125

What document or record is used to inform others of the receipt of purchased goods?

A. Advance shipping notice

B. Invoice
C. Receiving report
D. Packing slip

Answer: C

Question: 126
What is the preferred mode of long-distance transportation for high-value, light-weight cargo?

A. Air
B. Truck
C. Rail
D. Ocean

Answer: A

Question: 127
What is the long-term effect of reducing the number of distribution centers between a manufacturer
and its customers?

A. Total stock quantity increases.

B. Transport costs from factory to distribution centers only decrease.
C. Transport costs from distribution centers to customers only decrease.
D. Transport costs from factory to distribution centers and from distribution centers to customers
decrease.

Answer: B

Question: 128
Which material handling equipment is the most flexible in a distribution center?

A. Industrial trucks
B. Conveyor
C. Crane
D. Hoist

Answer: A
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Question: 129

Which of the following statements about a distribution requirements planning system is true?

A. It is used only for service parts.

B. Priority is given to open orders.
C. Material requirements planning logic is used.
D. Gross requirements come from exploding the bill of material.

Answer: C

Question: 130
One purpose for holding inventory in distribution centers is to:

A. decouple the demand for goods with the supply of goods.

B. improve customer service by locating stock near the customer.
C. decrease damage to merchandise by shipping shorter distances.
D. absorb fluctuations in storage requirements that cannot be met at the factory.

Answer: B

Question: 131
Increasing sales through the Internet will result in an increased demand for reverse:

A. auctions.
B. engineering.
C. flow scheduling.
D. logistics.

Answer: D

Question: 132
An appropriate reason to carry safety stock is to protect against:

A. demand fluctuations before the order point is reached.

B. demand fluctuations after the order point is reached.
C. price fluctuations before the order point is reached.
D. price fluctuations after the order point is reached.

Answer: B

Question: 133
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The final purchasing steps in order completion are:

A. receipt of goods and approval of invoice.

B. selecting suppliers and receipt of goods.
C. requesting quotations and approval of invoice.
D. selecting suppliers, follow-up, and delivery.

Answer: A

Question: 134
Companies typically make final purchasing decisions based on which of the following supplier
characteristics?

A. Reverse logistics
B. Personal relationships
C. Delivery reliability
D. Market share

Answer: C

Question: 135
Which of the following differences must be taken into consideration when dealing with a global
distribution system?

A. Culture
B. Cost
C. Carriers
D. Computer systems

Answer: A

Question: 136
Consignment stock is typically owned by:

A. a supplier until consumed.

B. the company who will consume the stock.
C. a joint trust set up for this purpose.
D. the carrier who transports the stock.

Answer: A

Question: 137
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Which of the following factors would reduce inventory carrying costs?

A. Ordering less inventory

B. Higher costs of working capital
C. Reducing ordering costs
D. Reducing transportation costs

Answer: A

Question: 138
Which of the following typically would be the most economical mode of transportation for crude oil
to an oil refinery?

A. Water
B. Pipeline
C. Truck
D. Rail

Answer: B

Question: 139
Typically the highest cost for warehousing is the cost related to:

A. space.
B. labor.
C. equipment for materials handling.
D. the information system.

Answer: A

Question: 140
To provide the required level of customer service, to minimize the costs of transportation and
handling, and to interact with a factory to minimize scheduling problems are all objectives of:

A. enterprise resources planning.

B. distribution inventory management.
C. sales and operations planning.
D. customer relations management.

Answer: B

Question: 141
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Which of the following activities positions goods or services closer to the customer?

A. Distribution
B. Manufacturing
C. Materials handling
D. Transportation

Answer: A

Question: 142
Which of the following actions is an example of a company expanding its customer service offering?

A. Adding a distribution center

B. Increasing work-in-process (WIP) inventory
C. Implementing statistical process control (SPC)
D. Decreasing manufacturing lot sizes

Answer: A

Question: 143
Which of the following processes is concerned with the transfer or delivery of goods or services?

A. Distribution channel
B. Supply chain
C. Transaction channel
D. Value chain

Answer: A

Question: 144
Which of the following processes is concerned with the change of ownership of goods and services?

A. Distribution channel
B. Supply chain
C. Transaction channel
D. Value chain

Answer: C

Question: 145
Which of the following terms represents a complete supply chain dedicated to the flow of products
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and materials for the purpose of returns, repair, remanufacture, or recycling?

A. Responsible landfill
B. Remanufacturing resource planning
C. Reverse logistics
D. Global distribution

Answer: C

Question: 146
Knowing average daily consumption and on hand inventory, a company can calculate:

A. storage cost.
B. days of supply.
C. annual usage rate.
D. annual cost of goods sold.

Answer: B

Question: 147
The complete supply chain dedicated to the flow of products for returns, repair and remanufacturing
is:

A. reverse auction.
B. reverse engineering.
C. reverse flow scheduling.
D. reverse logistics.

Answer: D

Question: 148
What is the order point when demand is 120 units per week, the lead time is 2 weeks, and safety
stock is 60 units?

A. 180
B. 240
C. 300
D. 360

Answer: C

Question: 149
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Which of the following functions of inventory is most likely to be included in a manufacturer's

finished goods?

A. Rework
B. Work in process
C. Anticipation
D. Maintenance, repair, and operations supplies (MRO)

Answer: C

Question: 150
Which method of record audit is concerned with the total value of inventory?

A. Weight counts
B. Cycle counts
C. Physical inventory
D. Sampling records

Answer: C

Question: 151
Which of the following statements describes a primary function of distribution inventory?

A. It protects against random changes in supply, demand, or lead time.

B. It helps to smooth production in periods of changing demand.
C. It is built to take advantage of quantity discounts.
D. It allows goods to be placed in close proximity to the customer.

Answer: D

Question: 152
Which of the following factors is a primary consideration when contracting with a supplier?

A. Inventory levels
B. Order cost
C. Quantity discounts
D. Product quality

Answer: D

Question: 153
As a company moves from domestic to global distribution, it becomes increasingly critical to control
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which of the following distribution costs?

A. Warehousing
B. Material handling
C. Protective packaging
D. Transportation

Answer: D

Question: 154
Which of the following statements best describes an example of advance ship notice?

A. An electronic data interchange communication indicating that an order has left the port of loading
B. A person who handles international shipping documentation and transportation requirements
C. A fee for material held at port longer than the standard unloading time
D. A listing of the items included in an overseas shipment

Answer: A

Question: 155
In the total cost concept, which of the following logistics costs should be considered when selecting a
transportation mode?

A. Import duty costs

B. Receiving inspection costs
C. Inventory purchasing costs
D. Inventory carrying costs

Answer: D
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