CPIM – CERTIFIED IN PRODUCTION & INVENTORY
MANAGEMENT PROFESSIONAL CERTIFICATION EXAM 200
PRACTICE QUESTIONS COVERING ALL EXAM TESTED DOMAINS
COMPLETE WITH 100% VERIFIED ANSWERS
Question 1: Which of the following competitive priorities focuses on a
company's ability to quickly introduce new products to the market?
A. Cost leadership
B. Delivery speed
C. Innovation
D. Quality
CORRECT ANSWER: C. Innovation
Rationale: Innovation as a competitive priority emphasizes a company's
capability to develop and introduce new products rapidly. Cost
leadership focuses on minimizing production costs, delivery speed on
order fulfillment velocity, and quality on product reliability and
performance.
Question 2: In a make-to-stock (MTS) environment, what drives the
production schedule?
A. Customer orders
B. Forecasted demand
C. Supplier delivery schedules
D. Available warehouse space
,CORRECT ANSWER: B. Forecasted demand
Rationale: In a make-to-stock environment, production is driven by
forecasted demand rather than actual customer orders. Products are
manufactured and held in inventory awaiting customer purchase.
Customer orders (A) drive make-to-order environments, supplier
schedules (C) are input constraints, and warehouse space (D) is a
capacity consideration.
Question 3: Which of the following is NOT a characteristic of lean
manufacturing?
A. Continuous improvement
B. Large batch sizes
C. Waste elimination
D. Pull production systems
CORRECT ANSWER: B. Large batch sizes
Rationale: Lean manufacturing emphasizes small batch sizes, quick
changeovers, and reduced work-in-process inventory to minimize waste
and increase flexibility. Large batch sizes are characteristic of traditional
mass production, not lean manufacturing.
Question 4: What is the economic order quantity (EOQ) formula
designed to minimize?
A. Total inventory costs
B. Purchase costs only
,C. Stockout costs only
D. Transportation costs
CORRECT ANSWER: A. Total inventory costs
Rationale: The EOQ formula balances ordering costs and holding costs
to minimize the total cost of inventory management. It does not
address purchase costs (B), stockout costs (C) independently, or
transportation costs (D) directly.
Question 5: Which of the following is a push system characteristic?
A. Production based on actual customer demand
B. Kanban cards trigger production
C. Production based on forecasted demand
D. Inventory is minimized
CORRECT ANSWER: C. Production based on forecasted demand
Rationale: Push systems produce goods based on forecasted demand
and push them through the supply chain. Pull systems (A, B, D) produce
based on actual customer demand and work to minimize inventory
levels.
Question 6: What is the primary purpose of a bill of materials (BOM)?
A. To list all suppliers for raw materials
B. To define the components and subassemblies needed to produce a
finished product
C. To schedule production orders
D. To track employee productivity
, CORRECT ANSWER: B. To define the components and subassemblies
needed to produce a finished product
Rationale: A BOM is a structured document that lists all components,
subassemblies, and raw materials required to manufacture a finished
product. Supplier information (A) is typically in a separate document,
production scheduling (C) uses the BOM as input, and employee
productivity tracking (D) is unrelated.
Question 7: Which of the following is a benefit of implementing a just-
in-time (JIT) system?
A. Increased safety stock levels
B. Reduced setup times
C. Larger batch sizes
D. Higher inventory carrying costs
CORRECT ANSWER: B. Reduced setup times
Rationale: JIT systems aim to reduce setup times to enable smaller
batch sizes and more frequent production runs. Safety stock levels are
decreased (A), batch sizes are smaller (C), and inventory carrying costs
are reduced (D), not increased.
Question 8: What does the ABC classification system in inventory
management primarily address?
A. Supplier performance evaluation
B. Customer service levels
MANAGEMENT PROFESSIONAL CERTIFICATION EXAM 200
PRACTICE QUESTIONS COVERING ALL EXAM TESTED DOMAINS
COMPLETE WITH 100% VERIFIED ANSWERS
Question 1: Which of the following competitive priorities focuses on a
company's ability to quickly introduce new products to the market?
A. Cost leadership
B. Delivery speed
C. Innovation
D. Quality
CORRECT ANSWER: C. Innovation
Rationale: Innovation as a competitive priority emphasizes a company's
capability to develop and introduce new products rapidly. Cost
leadership focuses on minimizing production costs, delivery speed on
order fulfillment velocity, and quality on product reliability and
performance.
Question 2: In a make-to-stock (MTS) environment, what drives the
production schedule?
A. Customer orders
B. Forecasted demand
C. Supplier delivery schedules
D. Available warehouse space
,CORRECT ANSWER: B. Forecasted demand
Rationale: In a make-to-stock environment, production is driven by
forecasted demand rather than actual customer orders. Products are
manufactured and held in inventory awaiting customer purchase.
Customer orders (A) drive make-to-order environments, supplier
schedules (C) are input constraints, and warehouse space (D) is a
capacity consideration.
Question 3: Which of the following is NOT a characteristic of lean
manufacturing?
A. Continuous improvement
B. Large batch sizes
C. Waste elimination
D. Pull production systems
CORRECT ANSWER: B. Large batch sizes
Rationale: Lean manufacturing emphasizes small batch sizes, quick
changeovers, and reduced work-in-process inventory to minimize waste
and increase flexibility. Large batch sizes are characteristic of traditional
mass production, not lean manufacturing.
Question 4: What is the economic order quantity (EOQ) formula
designed to minimize?
A. Total inventory costs
B. Purchase costs only
,C. Stockout costs only
D. Transportation costs
CORRECT ANSWER: A. Total inventory costs
Rationale: The EOQ formula balances ordering costs and holding costs
to minimize the total cost of inventory management. It does not
address purchase costs (B), stockout costs (C) independently, or
transportation costs (D) directly.
Question 5: Which of the following is a push system characteristic?
A. Production based on actual customer demand
B. Kanban cards trigger production
C. Production based on forecasted demand
D. Inventory is minimized
CORRECT ANSWER: C. Production based on forecasted demand
Rationale: Push systems produce goods based on forecasted demand
and push them through the supply chain. Pull systems (A, B, D) produce
based on actual customer demand and work to minimize inventory
levels.
Question 6: What is the primary purpose of a bill of materials (BOM)?
A. To list all suppliers for raw materials
B. To define the components and subassemblies needed to produce a
finished product
C. To schedule production orders
D. To track employee productivity
, CORRECT ANSWER: B. To define the components and subassemblies
needed to produce a finished product
Rationale: A BOM is a structured document that lists all components,
subassemblies, and raw materials required to manufacture a finished
product. Supplier information (A) is typically in a separate document,
production scheduling (C) uses the BOM as input, and employee
productivity tracking (D) is unrelated.
Question 7: Which of the following is a benefit of implementing a just-
in-time (JIT) system?
A. Increased safety stock levels
B. Reduced setup times
C. Larger batch sizes
D. Higher inventory carrying costs
CORRECT ANSWER: B. Reduced setup times
Rationale: JIT systems aim to reduce setup times to enable smaller
batch sizes and more frequent production runs. Safety stock levels are
decreased (A), batch sizes are smaller (C), and inventory carrying costs
are reduced (D), not increased.
Question 8: What does the ABC classification system in inventory
management primarily address?
A. Supplier performance evaluation
B. Customer service levels
