APICS CPIM Exam 1 with Complete
Solutions
ABC classification - ANS-Process of classifying items in descending order based on
annual dollar volume or some other criteria. The list is then split into 3 classes - A, B,
and C. A represents 10-20% of items but 50-70% of dollar volume; B represents 20% of
items and 20% of dollar volume; C represents 60-70% of items but 10-30% of dollar
volume. This principle states that effort and money can be saved by applying looser
controls to the low dollar volume items (C class) than the higher dollar volume items (A
& B classes) and applies to inventory, purchasing, sales, etc.
Advance ship notice (ASN) - ANS-Electronic data interchange (EDI) notification of
shipment of goods
Andon - ANS-Electronic board that provides visibility of floor status and gives info to
help coordinate efforts linked to work centers; green light = running, red light = stop,
yellow light = needs attention
Anticipation inventories - ANS-Any additional inventory above basic pipeline stock to
cover projected trends of increased sales, planned promo programs, seasonal
fluctuation, plant shutdowns, and vacations
Assemble-2-order - ANS-Production environment where a good or service can be
assembled after receipt of a customer's order. The key components (or ingredients)
used in assembly or finishing process are planned and stocked in anticipation of a
customer order. Receipt of order initiates assembly of the customized product. Useful
strategy when a large number of end products can be assembled from common
components
Available inventory - ANS-On-hand inventory balance minus allocations, reservations,
backorders, and quantities held for quality problems
Backflush - ANS-Method of inventory bookkeeping where the book inventory is
automatically reduced after completion of activity on component's upper-level parent
item based on what should have been used as specified on the BOM and allocation
records; disadvantage is difference between book inventory and physical OH inventory
Backhauling - ANS-Process of transportation returning from original destination point to
point of origin; can be full, partial, or empty load
,Backlog - ANS-All customer orders received but not yet shipped (open orders or order
board)
Backorder - ANS-Unfulfilled customer order or commitment. An immediate (or past due)
demand against an item whose inventory is insufficient to satisfy the demand
Back scheduling - ANS-Technique for calculating operation start dates and due dates;
start with order due date and work backwards to calculate required start date and/or due
dates for each operation
Batch - ANS-Qty scheduled to be produced or in production; type of mfg process used
to produce items with similar designs & cover wide range of order volumes; items
ordered are of a repeat nature
Bill of lading - ANS-Document issued by a carrier which details a shipment of
merchandise and gives title of that shipment to a specified party.
Bill of material (BOM) - ANS-Listing of all the subassemblies, intermediates, parts, and
raw materials that go into a parent assembly showing the quantity of each required to
make an assembly; used in conjunction with the master production schedule to
determine the items for which purchase requisitions and production orders must be
released; list of all the materials needed to make one production run of a product, by a
contract manufacturer, of piece parts/components for its customers
Bonded warehouse - ANS-Buildings or parts of a building designated by Sec of
Treasury for storing imported goods, operated under supervision of US Customs
Bottleneck - ANS-Facility, function, department, or resource whose capacity is less than
the demand placed upon it; machine or work center
Break-bulk - ANS-Dividing truckloads of similar items into smaller, more appropriate
qty's for use
Buffer - ANS-Qty of materials awaiting further processing; can refer to raw materials,
semi-finished stores or hold points, or a work backlog that is purposely maintained
behind a work center; in TOC, it can be time or material and support thruput and/or due
date performance maintained at the constraint, convergent points (with a constraint
part), divergent points, and shipping points
Buffer management - ANS-In TOC, process where all expediting in a shop is driven by
what is scheduled to be in the buffers (constraint, shipping, or assembly); by expediting
into buffers, system avoids idleness at the constraint and prevents missed due date
Business plan - ANS-Statement of long-range strategy and revenue, cost, and profit
objectives usually accompanied by budgets, a projected balance sheet, and a cash flow
, (source and application of funds) statement; document consisting of the business
details (organization, strategy, and financing tactics)
Capable-2-promise - ANS-Process of committing orders against available capacity as
well as inventory. May involve multiple manufacturing or distribution sites. Used to
determine when a new or unscheduled customer order can be delivered. Employs a
finite-scheduling model of manufacturing system to determine when an item can be
delivered. Includes any constraints that might restrict production, such as availability of
resources, lead times for raw materials or purchased parts, and requirements for lower-
level components or subassemblies. The resulting delivery date takes into consideration
production capacity, current manufacturing environment, and future order commitments.
Objective is to reduce time spent by planners in expediting orders and adjusting plans
because of inaccurate delivery-date promises
Capacity control - ANS-Process of measuring production output and comparing it with
the capacity plan to determine if variance exceeds pre-established limits and taking
action to get back on plan if limits are exceeded
Capacity management - ANS-Function of establishing, measuring, monitoring, and
adjusting limits of capacity in order to execute all mfg schedules; executed at 4 levels:
resource requirements planning, rough-cut capacity planning, capacity requirements
planning, and input/output control
Capacity planning - ANS-Process of determining amount of capacity required to
produce in the future; may be performed at aggregate or product-line (RRP), master-
schedule level (R-CCP), and materials requirements planning (CRP)
Capacity requirements planning (CRP) - ANS-Process of determining in detail amount
of labor and machine resources required to complete task of production; inputs are
open orders and planned orders; checks against all time periods
Carrying cost - ANS-% of dollar value of inventory per unit of time (generally one year);
depends mainly on the cost of capital invested as well as such costs of maintaining the
inventory as taxes and insurance, obsolescence, spoilage, and space occupied; varies
from 10% to 35% annually, depending on type of industry
Cash flow - ANS-Net flow of dollars into or out of the proposed project; algebraic sum, in
any time period, of all cash receipts, expenses, and investments
Cause-and-effect diagram - ANS-Tool for analyzing process dispersion
Cellular manufacturing - ANS-Mfg 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
Chase production method - ANS-Production planning method that maintains stable
inventory level while varying production to meet demand
Solutions
ABC classification - ANS-Process of classifying items in descending order based on
annual dollar volume or some other criteria. The list is then split into 3 classes - A, B,
and C. A represents 10-20% of items but 50-70% of dollar volume; B represents 20% of
items and 20% of dollar volume; C represents 60-70% of items but 10-30% of dollar
volume. This principle states that effort and money can be saved by applying looser
controls to the low dollar volume items (C class) than the higher dollar volume items (A
& B classes) and applies to inventory, purchasing, sales, etc.
Advance ship notice (ASN) - ANS-Electronic data interchange (EDI) notification of
shipment of goods
Andon - ANS-Electronic board that provides visibility of floor status and gives info to
help coordinate efforts linked to work centers; green light = running, red light = stop,
yellow light = needs attention
Anticipation inventories - ANS-Any additional inventory above basic pipeline stock to
cover projected trends of increased sales, planned promo programs, seasonal
fluctuation, plant shutdowns, and vacations
Assemble-2-order - ANS-Production environment where a good or service can be
assembled after receipt of a customer's order. The key components (or ingredients)
used in assembly or finishing process are planned and stocked in anticipation of a
customer order. Receipt of order initiates assembly of the customized product. Useful
strategy when a large number of end products can be assembled from common
components
Available inventory - ANS-On-hand inventory balance minus allocations, reservations,
backorders, and quantities held for quality problems
Backflush - ANS-Method of inventory bookkeeping where the book inventory is
automatically reduced after completion of activity on component's upper-level parent
item based on what should have been used as specified on the BOM and allocation
records; disadvantage is difference between book inventory and physical OH inventory
Backhauling - ANS-Process of transportation returning from original destination point to
point of origin; can be full, partial, or empty load
,Backlog - ANS-All customer orders received but not yet shipped (open orders or order
board)
Backorder - ANS-Unfulfilled customer order or commitment. An immediate (or past due)
demand against an item whose inventory is insufficient to satisfy the demand
Back scheduling - ANS-Technique for calculating operation start dates and due dates;
start with order due date and work backwards to calculate required start date and/or due
dates for each operation
Batch - ANS-Qty scheduled to be produced or in production; type of mfg process used
to produce items with similar designs & cover wide range of order volumes; items
ordered are of a repeat nature
Bill of lading - ANS-Document issued by a carrier which details a shipment of
merchandise and gives title of that shipment to a specified party.
Bill of material (BOM) - ANS-Listing of all the subassemblies, intermediates, parts, and
raw materials that go into a parent assembly showing the quantity of each required to
make an assembly; used in conjunction with the master production schedule to
determine the items for which purchase requisitions and production orders must be
released; list of all the materials needed to make one production run of a product, by a
contract manufacturer, of piece parts/components for its customers
Bonded warehouse - ANS-Buildings or parts of a building designated by Sec of
Treasury for storing imported goods, operated under supervision of US Customs
Bottleneck - ANS-Facility, function, department, or resource whose capacity is less than
the demand placed upon it; machine or work center
Break-bulk - ANS-Dividing truckloads of similar items into smaller, more appropriate
qty's for use
Buffer - ANS-Qty of materials awaiting further processing; can refer to raw materials,
semi-finished stores or hold points, or a work backlog that is purposely maintained
behind a work center; in TOC, it can be time or material and support thruput and/or due
date performance maintained at the constraint, convergent points (with a constraint
part), divergent points, and shipping points
Buffer management - ANS-In TOC, process where all expediting in a shop is driven by
what is scheduled to be in the buffers (constraint, shipping, or assembly); by expediting
into buffers, system avoids idleness at the constraint and prevents missed due date
Business plan - ANS-Statement of long-range strategy and revenue, cost, and profit
objectives usually accompanied by budgets, a projected balance sheet, and a cash flow
, (source and application of funds) statement; document consisting of the business
details (organization, strategy, and financing tactics)
Capable-2-promise - ANS-Process of committing orders against available capacity as
well as inventory. May involve multiple manufacturing or distribution sites. Used to
determine when a new or unscheduled customer order can be delivered. Employs a
finite-scheduling model of manufacturing system to determine when an item can be
delivered. Includes any constraints that might restrict production, such as availability of
resources, lead times for raw materials or purchased parts, and requirements for lower-
level components or subassemblies. The resulting delivery date takes into consideration
production capacity, current manufacturing environment, and future order commitments.
Objective is to reduce time spent by planners in expediting orders and adjusting plans
because of inaccurate delivery-date promises
Capacity control - ANS-Process of measuring production output and comparing it with
the capacity plan to determine if variance exceeds pre-established limits and taking
action to get back on plan if limits are exceeded
Capacity management - ANS-Function of establishing, measuring, monitoring, and
adjusting limits of capacity in order to execute all mfg schedules; executed at 4 levels:
resource requirements planning, rough-cut capacity planning, capacity requirements
planning, and input/output control
Capacity planning - ANS-Process of determining amount of capacity required to
produce in the future; may be performed at aggregate or product-line (RRP), master-
schedule level (R-CCP), and materials requirements planning (CRP)
Capacity requirements planning (CRP) - ANS-Process of determining in detail amount
of labor and machine resources required to complete task of production; inputs are
open orders and planned orders; checks against all time periods
Carrying cost - ANS-% of dollar value of inventory per unit of time (generally one year);
depends mainly on the cost of capital invested as well as such costs of maintaining the
inventory as taxes and insurance, obsolescence, spoilage, and space occupied; varies
from 10% to 35% annually, depending on type of industry
Cash flow - ANS-Net flow of dollars into or out of the proposed project; algebraic sum, in
any time period, of all cash receipts, expenses, and investments
Cause-and-effect diagram - ANS-Tool for analyzing process dispersion
Cellular manufacturing - ANS-Mfg 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
Chase production method - ANS-Production planning method that maintains stable
inventory level while varying production to meet demand
