CPIM Strategic Management of Resources 2 — Questions and Answers
Question 1: The 'order winner' concept in manufacturing strategy refers to:
- The criteria that cause customers to choose one supplier over competitors (Correct answer)
- The internal measure of on-time delivery performance
- The financial metric that determines investment priorities
- The quality standard required to enter a market
Correct answer: The criteria that cause customers to choose one supplier over competitors
Order winners are the competitive criteria (price, quality, speed, flexibility) that actually win orders from customers, distinguishing one supplier from another in a specific market.
Question 2: What is the primary purpose of a 'technology roadmap' in manufacturing strategy?
- Tracking current IT system versions for maintenance
- Aligning technology investments and development timelines with business and product strategy over time (Correct answer)
- Mapping the physical layout of manufacturing equipment
- Documenting supplier technology capabilities
Correct answer: Aligning technology investments and development timelines with business and product strategy over time
A technology roadmap is a strategic planning tool that links business objectives with technology development plans across time, guiding investment decisions.
Question 3: In CPIM strategic management, 'vertical integration' means a company:
- Expands geographically into new markets
- Acquires control of adjacent stages in its supply chain (suppliers or customers) (Correct answer)
- Increases the number of product lines offered
- Implements enterprise resource planning across all functions
Correct answer: Acquires control of adjacent stages in its supply chain (suppliers or customers)
Vertical integration is a strategy where a company takes ownership of supply chain stages it previously outsourced, either backward (toward suppliers) or forward (toward customers).
Question 4: Total Cost of Ownership (TCO) when evaluating suppliers includes:
- Purchase price only
- Purchase price, transportation, quality costs, inventory costs, and supplier development costs (Correct answer)
- Invoice price plus freight charges
- Material cost plus direct labor cost
Correct answer: Purchase price, transportation, quality costs, inventory costs, and supplier development costs
TCO captures all costs associated with a supplier relationship beyond the purchase price, including logistics, quality failures, inventory holding, and the cost of managing the supplier.
Question 5: What is 'mass customization' in manufacturing strategy?
- Producing large volumes of identical standard products at lowest cost
- Delivering individually customized products at near mass-production cost and volume (Correct answer)
- Customizing products only for the largest customers
- Allowing customers to design products from scratch with no standard components
Correct answer: Delivering individually customized products at near mass-production cost and volume
Mass customization combines the efficiency of mass production with the flexibility to deliver product configurations that meet individual customer needs at competitive cost.
Question 6: Which approach to capacity strategy adds capacity in advance of projected demand to prevent lost sales?
- Lag strategy
- Lead strategy (Correct answer)
- Match strategy
- Reactive strategy
Correct answer: Lead strategy
A lead capacity strategy proactively adds capacity before demand materializes, accepting higher short-term costs to avoid stockouts and capture market share.
CPIM Strategic Management of Resources 2
The 'order winner' concept in manufacturing strategy refers to: