APICS CPIM Part 2 Exam Questions With Correct Answers

14 Points - Answer W. Edwards Deming's 14 management practices to help companies increase their quality and productivity A3 Method - Answer A means of compactly describing a business process Abnormal Demand - Answer Demand in any period that is outside the limits established by management policy Absorption Costing - Answer An approach to inventory valuation in which variable costs and a portion of fixed costs are assigned to each unit production. Acceptable Quality Level (AQL) - Answer When a continuing series of lots is considered, a quality level that, for the purposes of sampling inspection, is the limit of a satisfactory process average Acceptance Sampling - Answer the process of sampling a portion of goods for inspection rather than examining the entire lot Action Message - Answer An output of a system that identifies the need for, and the type of action to be taken to correct, a current or potential problem. Activation - Answer Putting a resource to work Activity-Based Cost Accounting - Answer A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases such as customers, markets, or projects. It attempts to allocate overhead costs on a more realistic basis than by using direct labor or machine hours Activity-Based Management (ABM) - Answer The use of activity-based costing information about cost pools and drivers, activity analysis, and business processes to identify business strategies; improve design, manufacturing, and distribution; and remove waste from operations Actual Costs - Answer The labor, material, and associated overhead costs that are charged against a job as it moves through the production process Actual Demand - Answer Composed of customer orders (and often allocation of items, ingredients or raw materials to production or distribution). Nets against or chosen over a time horizon. Adaptive Smoothing - Answer A form of exponential smoothing in which the smoothing constant is automatically adjusted as a function of forecast error measurement Adjustable Capacity - Answer Capacity, such as labor or tools, that can be changed in the short term Advanced planning and scheduling (APS)/Advanced Planning Systems (APS) - Answer Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. Aggregate Forecast - Answer An estimate of sales, often time-phrased, for a grouping of products or product families produced by a facility or firm. Stated in terms of units, dollars, or both, the aggregate forecast is used for sales and production planning purposes Aggregate Plan - Answer A plan that includes budgeted levels of finished goods, inventory, production backlogs, and changes in the workforce to support the production strategy. Aggregated information rather than product information is used Agility - Answer The ability to quickly plan, source, make, and deliver to adapt and respond to changes in the competitive environment. It is a SCOR performance attribute that includes product or service flexibility (speedy introduction of new products and services), mix flexibility (ability to quickly change products or services offered), volume flexibility (ability to service large order quantities), and delivery flexibility (ability to quickly change delivery dates to meet new requirements) Allocation - Answer The classification of resources or items quantities that have been assigned to specific orders but have not yet been released from the stockroom to production. It is an "uncashed" stockroom requisition. 2. A process used to distribute material in short supply Alpha Factor/Smoothing Constant - Answer In exponential smoothing, the weighting factor that is applied to the most recent demand, observation, or error Alternate Operation - Answer Replacement for a normal step in the manufacturing process Alternate Routing - Answer A routing that is usually less preferred than the primary routing but results in an identical item. Alternate routings may be maintained in the computer or off-line via manual methods, but the computer software must be able to accept alternate routings for specific jobs Analysis of Variance (ANOVA) - Answer A statistical analysis system that estimates what portion of variation in a dependent variable is caused by variation in one or more independent variables. It also produces a number used to infer whether any or all of the independent-dependent variable relationships have statistical significance Andon - Answer A sign board with signal lights used to make workers and management aware of a quality, quantity, or process problem Anticipated Delay Report - Answer A report, normally issued by both manufacturing and purchasing to the material planning function, regarding jobs or purchase orders that will not be completed on time. This report explains why the jobs or purchases are delayed and when they will be completed. This report is an essential ingredient of the closed-loop MRP system. It is normally a handwritten report Appraisal Costs - Answer Those costs associated with the formal evaluation and audit of quality in the firm. Typically costs include inspection, quality audits, testing, calibration, and checking time Assignable Cause - Answer A source of variation in a process that can be isolated, especially when its significantly larger magnitude or different origin readily distinguishes it from random causes of variation Attribute Data - Answer Go/no-go information. The control charts based on attribute data include percent chart, number of affected units chart, count chart, count-per-chart, quality score chart, and demerit chart Availability - Answer The percentage of a time that a worker or machine is capable of working. Availability Formula - Answer = (S-B)/S x 100% where S is the scheduled time and B is the downtime Available Capacity - Answer The capability of a system or resource to produce a quantity of output in a particular time period Available Time - Answer The number of hours a work center can be used, based on management decisions regarding shift structure, extra shifts, regular overtime, observance of weekends and public holidays, shutdowns, and the like Backflush Costing - Answer The application of costs based on the output of a process. Is usually associated with repetitive manufacturing environments Backward Integration - Answer The process of buying or owning elements of the production cycle and channel of distribution back toward raw material suppliers Backward Scheduling/Back Scheduling - Answer A technique for calculating operation start dates and due dates. The schedule is computed starting with the due date for the order and working backward to determine the required start date and/or due dates for each operation Balanced Scorecard - Answer A list of financial and operational measurements used to evaluate organizational or supply chain performance. The dimensions might include customer perspective, business process perspective, financial perspective, and innovation and learning perspectives. Formally connects overall objectives, strategies, and measurements. Balancing Operations - Answer In repetitive just-in-time production, matching actual output cycle times of all operations to the demand or use for parts as required by final assembly and, eventually, as required by the market Baseline Measures - Answer A set of measurements/metrics that seeks to establish the current or starting level of performance of a process, function, product, firm, or other entity. Usually established before implementing improvement activities and programs Base Series - Answer A standard succession of values of demand-over-time data used in forecasting seasonal items. Basic Seven Tools of Quality (B7) - Answer Tools that help organizations understand their processes in order to improve them. the tools are the cause-and-effect diagram, check sheet., flowchart, histogram, Pareto chart, control chart, and scatter diagram Batch - Answer A quantity scheduled to be produced or in production Batch Processing - Answer A manufacturing technique in which parts are accumulated and processed together in a lot. 2. A computer technique in which transactions are accumulated and processed together or in a lot Benchmarking - Answer Comparing products, processes, and services to those of another organization thought to have superior performance. The benchmark target may or may not be a competitor or even in the same industry Benchmark Measures - Answer A set of measurements/metrics that is used to establish goals for improvements in processes, functions, products, and so on. Often derived from other firms that display best-in-class achievement Bill of Distributions/Distribution Network Structure - Answer The planned channels of inventory disbursement from one or more sources to field warehouse and ultimately to the customer. Bill of Labor - Answer A structured listing of all labor requirements for the fabrication, assembly, and testing of a parent item. Bill of Resources - Answer A listing of the required capacity and key resources needed to manufacture one unit of a selected item or family. Rough-cut capacity planning uses these bills to calculate the approximate capacity requirements of the master production schedule Block Scheduling - Answer An operation scheduling technique where each operation is allowed a "block" of time Bottleneck/Bottleneck Operation - Answer A facility, function, department, or resource whose capacity is less than the demand placed upon it Break-Even Point - Answer The level of production or the volume of sales at which operations are neither profitable nor unprofitable. Bucketed System - Answer An MRP, DRP, or other time-phased system in which all time-phased data is accumulated into time periods called buckets Bucketless Systems - Answer An MRP, DRP, or other time-phased system in which all time-phased data is processed, stored, and usually displayed using dated records rather than defined time periods Budgeted Capacity - Answer The volume/mix of throughput on which financial budgets were set and overhead/burden absorption rates established Buffer - Answer 1. A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. 2. In the theory of constraints, buffers can be time or material and support throughput and/or due date performance. Can be maintained at the constraint, convergent points, divergent points, and shipping points Buffer Management - Answer In the theory of constraints, a process in which all expediting in a shop is driven by what is scheduled to be in the buffers Buffer Stock/Safety Stock - Answer 1. A quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. Bullwhip Effect - Answer An extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. Inventory can quickly move from being backordered to being excess. This is caused by the serial nature of communicating orders up the chain with the inherent transportation delays of moving product down the chain. Can be eliminated by synchronizing the supply chain Business Process Reengineering (BPR) - Answer A procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed. Business-to-Business Commerce (B2B) - Answer Business conducted over the internet between businesses. The implication is that this connectivity will cause businesses to transform themselves via supply chain management to become virtual organizations - reducing costs, improving quality, reducing delivery lead time, and improving due-date performance By-Product - Answer A material of value produced as a residual of or incidental to the production process. The ratio of by-product to primary product is usually predictable Calculated Capacity/Rated Capacity - Answer The expected output capability of a resource or system. Calculated Capacity/Rated Capacity Equation - Answer Hours available * efficiency * utilization Capable-to-Promise (CTP) - Answer The process of committing orders against available capacity as well as inventory. Capacity Available - Answer The capability of a system or resource to produce a quantity of output in a particular time period Capacity-Constrained Resource (CCR) - Answer A resource that is not a constraint but will become a constraint unless scheduled carefully. Any resource that, if its capacity is not carefully managed, is likely to compromise the throughput of the organization Capacity Control - Answer The process of measuring production output and comparing it with the capacity plan, determining if the variance exceeds pre-established limits, and taking corrective action to get back on plan if the limits are exceeded Capacity Management - Answer The function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules Capacity Planning Using Overall Factors (CPOF) - Answer A rough-cut capacity planning technique. The master schedule items and quantities are multiplied by the total time required to build each item to provide the total number of hours to produce the schedule. Capacity-Related Costs - Answer Costs generally related to increasing (or decreasing) capacity in the medium-to long-range time horizon. Capacity Requirements - Answer The resources needed to produce the projected level of work required from a facility over a time horizon. Usually expressed in terms of hours of work or, when units consume similar resources at the same rate, units of production Capacity Strategy - Answer One of the strategic choices a firm must make as part of its manufacturing strategy. There are three commonly recognized capacity strategies: lead, lag, and tracking. Capacity Utilization - Answer Goods produced, or customers served, divided by total output capacity Cash conversion Cycle - Answer 1. In retailing, the length of time between the sale of products and the cash payments for a company's resources. 2. In manufacturing, the length of time from the purchase of raw materials to the collection of accounts receivable from customers for the sale of products or services Cash-to-Cash Cycle Time - Answer An indicator of how efficiently a company manages its assets to improve cash flow. Cash-to-Cash Cycle Time Equation - Answer Inventory days + accounts receivable days - accounts payable days Cause-and-Effect Diagram/Ishikawa Diagram - Answer A tool for analyzing process dispersion. Illustrates the main causes and subcauses leading to an effect Cell - Answer A manufacturing or service unit consisting of a number of workstations and the materials transport mechanisms and storage buffers that interconnect them Cellular Manufacturing - Answer A manufacturing process that produces families of parts within a single line or cell of machines controlled by operators who work only within the line or cell Central Point Scheduling - Answer A variant of scheduling that employs both forward and backward scheduling, starting from the scheduled start date of a particular operation Certificate of Compliance - Answer A supplier's certification that the supplies or services in question meet specified requirements Certification Audits - Answer Audits occurring within registration processes Certified Supplier - Answer A status awarded to a supplier that consistently meets predetermined quality, cost, delivery, financial, and count objectives Changeover/Setup - Answer The work required to change a specific machine, resource, work center, or line from making the last good piece of item A to making the first good piece of item B Changeover Costs/Setup Costs - Answer Costs such as scrap costs, calibration costs, downtime costs, and lost sales associated with preparing the resource for the next product Chase Production Method/Chase Strategy - Answer A production planning method that maintains a stable inventory level while varying production to meet demand. Companies may combine chase and level production schedule methods Check Sheet - Answer A simple data-recording device. Designed by the user to facilitate the user's interpretation of the results. One of the seven tools of quality. Collaborative Planning, Forecasting, and Replenishment (CPFR) - Answer A collaboration process whereby supply chain trading partners can jointly plan key supply chain activities from production and delivery of raw materials to production and delivery of final products to end customers.Collaboration encompasses business planning, sales forecasting, and all operations required to replenish raw materials and finished goods Common Causes - Answer Causes of variation that are inherent in a process over time. They affect every outcome of the process and everyone working in the process Common Parts Bill of Material - Answer A type of planning bill that groups common components for a product or family of products into one bill of material, structured to a pseudo-parent item number Competitive Advantage - Answer The advantage a company has over its rivals in attracting customers and defending against competitors. Sources of the advantage include characteristics that a competitor cannot duplicate without substantial cost and risk Concurrent Design/Concurrent Engineering/Participative Design/Engineering - Answer A concept that refers to the simultaneous participation of all the functional areas of the firm in the product design activity. Suppliers and customers are often also included. The intent is to enhance the design with the inputs of all the key stakeholders. Conformance - Answer An affirmative indication or judgement that a product or service has met the requirements of a relevant specification, contract, or illegal actions