Certified Production and Inventory
Management (CPIM) Practice
Examination 2026 | 100 Questions &
Answers with Detailed Rationales |
Complete CPIM Exam Prep & Study
Guide
1. What is the primary purpose of a sales and operations planning (S&OP)
process?
A. To schedule individual work-center operations
B. To balance supply and demand at an aggregate level
C. To calculate individual component requirements
D. To authorize purchase orders
Answer: To balance supply and demand at an aggregate level
Rationale: S&OP aligns demand, supply, inventory, capacity, and financial
objectives at an aggregate level to support organizational strategy.
2. Which planning technique is most directly concerned with determining
what finished products should be produced, in what quantities, and when?
A. Master production scheduling
B. Supplier evaluation
,C. Cycle counting
D. Distribution requirements planning
Answer: Master production scheduling
Rationale: The master production schedule (MPS) translates aggregate plans
into specific end-item production quantities and timing.
3. What is the main purpose of a bill of material (BOM)?
A. To establish supplier payment terms
B. To identify the components and quantities required to make a product
C. To calculate employee productivity
D. To determine warehouse capacity
Answer: To identify the components and quantities required to make a product
Rationale: A BOM defines the product structure and identifies the components,
subassemblies, and quantities needed to manufacture an item.
4. Which inventory classification method groups items according to annual
dollar usage?
A. ABC analysis
B. FIFO analysis
C. EOQ analysis
D. Critical-ratio analysis
Answer: ABC analysis
Rationale: ABC analysis classifies inventory based on criteria such as annual
dollar usage, allowing greater management attention to high-value items.
5. What does MRP primarily determine?
A. Customer satisfaction levels
B. Material requirements and timing
,C. Employee compensation
D. Marketing expenditures
Answer: Material requirements and timing
Rationale: Material requirements planning determines what materials are
needed, how many are needed, and when they are needed.
6. Which input is essential to an MRP system?
A. Master production schedule
B. Employee attendance report
C. Marketing brochure
D. General ledger only
Answer: Master production schedule
Rationale: The MPS provides the independent demand information that MRP
uses to calculate dependent component requirements.
7. What is dependent demand?
A. Demand that is unrelated to production
B. Demand calculated from the requirements of another item
C. Demand created exclusively by customers
D. Demand caused by seasonal promotions
Answer: Demand calculated from the requirements of another item
Rationale: Dependent demand is derived from the demand for a parent item,
such as components needed to produce a finished product.
8. Which inventory generally has demand that is independent?
A. Raw material used in a specific assembly
B. Component used in a finished product
C. Finished product sold directly to customers
D. Subassembly required by a parent item
, Answer: Finished product sold directly to customers
Rationale: Finished-goods demand is typically driven by external customers and
therefore is considered independent demand.
9. What is the primary objective of safety stock?
A. Eliminate all inventory
B. Protect against uncertainty in demand or supply
C. Increase setup time
D. Reduce product variety
Answer: Protect against uncertainty in demand or supply
Rationale: Safety stock provides protection against variability in demand,
replenishment lead time, or supply performance.
10.What does the economic order quantity (EOQ) model seek to minimize?
A. Total relevant ordering and holding costs
B. Direct labor costs only
C. Transportation time only
D. Product selling price
Answer: Total relevant ordering and holding costs
Rationale: EOQ balances ordering costs and inventory carrying costs to
determine an economical order quantity under specified assumptions.
11.Which cost increases as average inventory increases?
A. Carrying cost
B. Ordering cost per order
C. Setup cost per production run
D. Purchase requisition cost
Answer: Carrying cost
Management (CPIM) Practice
Examination 2026 | 100 Questions &
Answers with Detailed Rationales |
Complete CPIM Exam Prep & Study
Guide
1. What is the primary purpose of a sales and operations planning (S&OP)
process?
A. To schedule individual work-center operations
B. To balance supply and demand at an aggregate level
C. To calculate individual component requirements
D. To authorize purchase orders
Answer: To balance supply and demand at an aggregate level
Rationale: S&OP aligns demand, supply, inventory, capacity, and financial
objectives at an aggregate level to support organizational strategy.
2. Which planning technique is most directly concerned with determining
what finished products should be produced, in what quantities, and when?
A. Master production scheduling
B. Supplier evaluation
,C. Cycle counting
D. Distribution requirements planning
Answer: Master production scheduling
Rationale: The master production schedule (MPS) translates aggregate plans
into specific end-item production quantities and timing.
3. What is the main purpose of a bill of material (BOM)?
A. To establish supplier payment terms
B. To identify the components and quantities required to make a product
C. To calculate employee productivity
D. To determine warehouse capacity
Answer: To identify the components and quantities required to make a product
Rationale: A BOM defines the product structure and identifies the components,
subassemblies, and quantities needed to manufacture an item.
4. Which inventory classification method groups items according to annual
dollar usage?
A. ABC analysis
B. FIFO analysis
C. EOQ analysis
D. Critical-ratio analysis
Answer: ABC analysis
Rationale: ABC analysis classifies inventory based on criteria such as annual
dollar usage, allowing greater management attention to high-value items.
5. What does MRP primarily determine?
A. Customer satisfaction levels
B. Material requirements and timing
,C. Employee compensation
D. Marketing expenditures
Answer: Material requirements and timing
Rationale: Material requirements planning determines what materials are
needed, how many are needed, and when they are needed.
6. Which input is essential to an MRP system?
A. Master production schedule
B. Employee attendance report
C. Marketing brochure
D. General ledger only
Answer: Master production schedule
Rationale: The MPS provides the independent demand information that MRP
uses to calculate dependent component requirements.
7. What is dependent demand?
A. Demand that is unrelated to production
B. Demand calculated from the requirements of another item
C. Demand created exclusively by customers
D. Demand caused by seasonal promotions
Answer: Demand calculated from the requirements of another item
Rationale: Dependent demand is derived from the demand for a parent item,
such as components needed to produce a finished product.
8. Which inventory generally has demand that is independent?
A. Raw material used in a specific assembly
B. Component used in a finished product
C. Finished product sold directly to customers
D. Subassembly required by a parent item
, Answer: Finished product sold directly to customers
Rationale: Finished-goods demand is typically driven by external customers and
therefore is considered independent demand.
9. What is the primary objective of safety stock?
A. Eliminate all inventory
B. Protect against uncertainty in demand or supply
C. Increase setup time
D. Reduce product variety
Answer: Protect against uncertainty in demand or supply
Rationale: Safety stock provides protection against variability in demand,
replenishment lead time, or supply performance.
10.What does the economic order quantity (EOQ) model seek to minimize?
A. Total relevant ordering and holding costs
B. Direct labor costs only
C. Transportation time only
D. Product selling price
Answer: Total relevant ordering and holding costs
Rationale: EOQ balances ordering costs and inventory carrying costs to
determine an economical order quantity under specified assumptions.
11.Which cost increases as average inventory increases?
A. Carrying cost
B. Ordering cost per order
C. Setup cost per production run
D. Purchase requisition cost
Answer: Carrying cost
