CPIM Formulas Exam
Days sales outstanding (accounts receivable) - answer cash-to-cash cycle time - days
inventory outstanding + days payable outstanding (accounts payable)
average ordering cost - answer To calculate the average ordering cost per order, divide
the fixed costs ($900) by the units produced (3,000), which is $0.30. Add the fixed cost
to the variable cost to obtain the average ordering cost per order ($3.00 + $0.30 =
$3.30)
Planned backlog - answer Previous Planned Backlog + Planned Input - Planned Output
Total cost - answer Fixed cost + (Variable cost per unit x Number of units produced)
Annual carrying cost - answer Annual carrying cost = (Order quantity in units ÷ 2) x Unit
cost in dollars x Annual carrying cost rate as a decimal
Annual carrying cost = (210 ÷ 2) x $10 x 0.15
Annual carrying cost = 105 x $10 x 0.15
Annual carrying cost = $1,050 x 0.15
Annual carrying cost = $157.50
Calculate the new total safety stock requirement given the following information:
Present number of distribution centers (DCs): 1 DC
Number of distribution centers being added: 3 DCs
Total safety stock now in distribution centers: 4,000 units - answerCalculate the required
safety stock in each location using the formula of safety stock divided by the square root
of the total number of distribution centers
Annual Inventory Carrying Cost - answer= Quantity/2 × Carrying Cost Rate × Unit Cost
= Q/2 × i × c = 800/2 × 0.2 × $9 = $720.
Economic Order Quantity - answer= Square Root of [(2 × Annual Demand × Order
Cost)/(Carrying Cost Rate × Item Cost)]
Which of the following terms applies to spreading orders out in time or rescheduling
operations so that the amount of work to be done in sequential time periods tends to be
distributed evenly and is achievable? - answerLoad leveling
Which option would be most likely to result in a realistic and achievable schedule while
also taking advantage of excess capacity? - answerFinite forward scheduling
When measuring shop floor performance, which method will encourage not producing
unwanted product? - answerSchedule completion
, What information do item master files provide to production activity control? -
answerPart number and description
Which of the following benefits of setup reduction is most immediate? - answerReduced
product cost
In a service environment with a sufficient labor force, what is often still a labor
scheduling constraint when attempting to balance supply and demand in the short term?
- answerEquipment capacity
Production is about to start manufacturing a new product. In order to begin, they will
need to have specific information and instructions. In which of the following will this
information be contained? - answerProduct's routing
What is a significant advantage of using forward scheduling in a make-to-order
environment? - answerForward scheduling determines when orders could be
completed.
Which of the following aspects of a job most determines the day and time when the job
will be done? - answerSequence
Which of the following statements about finite capacity loading is true? - answerIt
requires recalculating load when the schedule is missed.
Which routing data is used by both infinite capacity requirements planning and finite
scheduling for planning and scheduling? - answerDirect labor hours
Which scheduling technique assumes that there will always be sufficient capacity and
computes the schedule starting with the due date for the order? - answerInfinite
backward scheduling
Increasing lead times in an effort to get more work done and meet the schedule will
most likely result in: - answerincreased queue times.
Increased flexibility in order to meet customer demand changes can be achieved by: -
answerreducing lead times.
What information do shop order files provide as an input to production activity control? -
answerPlanned and actual setup and run times
Which of the following capacity planning (load) report characteristics can be attributed to
material requirements planning (MRP)? - answerLoad is based on both planned and
open orders, and load reflects valid order priorities.
Days sales outstanding (accounts receivable) - answer cash-to-cash cycle time - days
inventory outstanding + days payable outstanding (accounts payable)
average ordering cost - answer To calculate the average ordering cost per order, divide
the fixed costs ($900) by the units produced (3,000), which is $0.30. Add the fixed cost
to the variable cost to obtain the average ordering cost per order ($3.00 + $0.30 =
$3.30)
Planned backlog - answer Previous Planned Backlog + Planned Input - Planned Output
Total cost - answer Fixed cost + (Variable cost per unit x Number of units produced)
Annual carrying cost - answer Annual carrying cost = (Order quantity in units ÷ 2) x Unit
cost in dollars x Annual carrying cost rate as a decimal
Annual carrying cost = (210 ÷ 2) x $10 x 0.15
Annual carrying cost = 105 x $10 x 0.15
Annual carrying cost = $1,050 x 0.15
Annual carrying cost = $157.50
Calculate the new total safety stock requirement given the following information:
Present number of distribution centers (DCs): 1 DC
Number of distribution centers being added: 3 DCs
Total safety stock now in distribution centers: 4,000 units - answerCalculate the required
safety stock in each location using the formula of safety stock divided by the square root
of the total number of distribution centers
Annual Inventory Carrying Cost - answer= Quantity/2 × Carrying Cost Rate × Unit Cost
= Q/2 × i × c = 800/2 × 0.2 × $9 = $720.
Economic Order Quantity - answer= Square Root of [(2 × Annual Demand × Order
Cost)/(Carrying Cost Rate × Item Cost)]
Which of the following terms applies to spreading orders out in time or rescheduling
operations so that the amount of work to be done in sequential time periods tends to be
distributed evenly and is achievable? - answerLoad leveling
Which option would be most likely to result in a realistic and achievable schedule while
also taking advantage of excess capacity? - answerFinite forward scheduling
When measuring shop floor performance, which method will encourage not producing
unwanted product? - answerSchedule completion
, What information do item master files provide to production activity control? -
answerPart number and description
Which of the following benefits of setup reduction is most immediate? - answerReduced
product cost
In a service environment with a sufficient labor force, what is often still a labor
scheduling constraint when attempting to balance supply and demand in the short term?
- answerEquipment capacity
Production is about to start manufacturing a new product. In order to begin, they will
need to have specific information and instructions. In which of the following will this
information be contained? - answerProduct's routing
What is a significant advantage of using forward scheduling in a make-to-order
environment? - answerForward scheduling determines when orders could be
completed.
Which of the following aspects of a job most determines the day and time when the job
will be done? - answerSequence
Which of the following statements about finite capacity loading is true? - answerIt
requires recalculating load when the schedule is missed.
Which routing data is used by both infinite capacity requirements planning and finite
scheduling for planning and scheduling? - answerDirect labor hours
Which scheduling technique assumes that there will always be sufficient capacity and
computes the schedule starting with the due date for the order? - answerInfinite
backward scheduling
Increasing lead times in an effort to get more work done and meet the schedule will
most likely result in: - answerincreased queue times.
Increased flexibility in order to meet customer demand changes can be achieved by: -
answerreducing lead times.
What information do shop order files provide as an input to production activity control? -
answerPlanned and actual setup and run times
Which of the following capacity planning (load) report characteristics can be attributed to
material requirements planning (MRP)? - answerLoad is based on both planned and
open orders, and load reflects valid order priorities.
