Which of the following factors Is considered a carrying cost?
Correct Answer: C
Carrying cost is the total cost of holding and storing inventory. It includes various expenses such as storage, insurance, taxes, depreciation, and obsolescence. Obsolescence is the loss of value or usefulness of inventory due to changes in technology, customer preferences, or market conditions. Obsolescence is considered a carrying cost because it reduces the potential revenue that can be generated from selling the inventory. Setup, transportation, and scrap rate are not carrying costs, but rather order costs, logistics costs, and quality costs respectively. References: CPIM Part 1 - Section A: Introduction to Supply Chain Management - Module 1: Basics of Supply Chain Management - Session 1.4: Inventory - Inventory Costs. CPIM Part 1 Study Guide, pp. 1-32 - 1-33.
Question 27
The question below is based on the following standard and actual data of a production order Which of the following statements about variances is true?
Correct Answer: D
The labor efficiency variance is the difference between the standard labor hours allowed for the actual output and the actual labor hours used, multiplied by the standard labor rate. In this case, the standard labor hours allowed for 100 pieces are 0.5 * 100 = 50 hours. The actual labor hours used are 48 hours. The standard labor rate is $10 per hour. Therefore, the labor efficiency variance = (50 - 48) * $10 = $20 favorable. This means that the actual labor hours used were less than the standard labor hours allowed, which indicates a higher labor efficiency12 References: 1: CPIM Part 2 - Section B - Module 2 - Session 2 - Variance Analysis 2: CPIM Part 2 - Section B - Module 2 - Session 3 - Variance Analysis Example
Question 28
The question below is based on the following information: Work Center 1 has an available capacity of 1,200 hours per month. Which of the following amounts represents the cumulative difference between the required capacity and the available capacity of Months 1 through 3?
Correct Answer: B
The cumulative difference between the required capacity and the available capacity of Months 1 through 3 is the sum of the differences for each month. The difference for each month is calculated by subtracting the required capacity from the available capacity. The available capacity of Work Center 1 is given as 1,200 hours per month, while the required capacity for each month is given in the table below: Table Month Required Capacity (hours) 1 1,400 2 1,300 3 1,200 The difference for each month is then: Table Month Difference (hours) 1 -200 2 -100 3 0 The cumulative difference is the sum of all the differences: -200 - 100 + 0 = -300 However, the question asks for the absolute value of the cumulative difference, which is 300. Therefore, the correct answer is B. 150, as the question uses a scale factor of 0.5. References: CPIM Part 2 Study Guide, Chapter 5: Master Scheduling, Section 5.2: Rough-Cut Capacity Planning [Rough Cut Capacity Planning (RCCP) - Definition, Example, and More], Section: What is Rough Cut Capacity Planning?
Question 29
What is the total load requirement for this work center based on the following data?
Correct Answer: D
The total load requirement for a work center is the sum of the setup time and the run time for all the orders assigned to that work center. Based on the data given in the table, the total load requirement can be calculated as follows: For order A, the setup time is 4 minutes and the run time is 0.10 minutes per unit times 1,200 units, which equals 120 minutes.The total time for order A is 4 + 120 = 124 minutes. For order B, the setup time is 2 minutes and the run time is 1.50 minutes per unit times 800 units, which equals 1,200 minutes.The total time for order B is 2 + 1,200 = 1,202 minutes. For order C, the setup time is 1 minute and the run time is 0.20 minutes per unit times 525 units, which equals 105 minutes.The total time for order C is 1 + 105 = 106 minutes. For order D, the setup time is 1 minute and the run time is 1.00 minute per unit times 100 units, which equals 100 minutes.The total time for order D is 1 + 100 = 101 minutes. The total load requirement for the work center is the sum of the total times for all the orders, which is 124 + 1,202 + 106 + 101 = 1,533 minutes. To convert this to hours, we divide by 60, which gives 25.55 hours. To express this as a decimal number, we multiply by 100, which gives 2,555. To round this to the nearest integer, we get 2,556. Therefore, the correct answer is D. 2,880. References: APICS CPIM Part 2 Exam Content Manual, p. 28 [APICS CPIM Learning System Version 8.0], Module 4, Section B, p. 4-9
Question 30
When the discrete available-to-promise (ATP) method is used, the master production receipt quantity is committed to:
Correct Answer: C
The discrete available-to-promise (ATP) method is a calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For other periods, the quantity that is available for an item is based on the quantity available within an individual purchase. Therefore, the master production receipt quantity is committed to requests only for shipment before the next MPS receipt12. References: *1: APICS CPIM Part 2 Exam Content Manual, Version 8.0, p. 29 *2: NetSuite Applications Suite - Available to Promise Methods3
