CPIM Sample 2 — Questions and Answers
Question 1: A company uses a periodic review inventory system. Which parameter defines how often the inventory level is checked?
- Reorder point
- Review interval (Correct answer)
- Safety stock level
- Economic order quantity
Correct answer: Review interval
In a periodic review system, the review interval (also called cycle time) determines how frequently inventory is checked and replenishment orders are placed.
Question 2: Which of the following best describes a pull system in manufacturing?
- Production is scheduled based on a master production schedule
- Production is triggered by actual downstream demand or consumption (Correct answer)
- Materials are pushed through the plant based on forecasted demand
- Work orders are released as soon as capacity becomes available
Correct answer: Production is triggered by actual downstream demand or consumption
A pull system triggers production or material movement based on actual downstream demand, as seen in kanban systems, rather than a forecast-driven push.
Question 3: In the context of MRP, what is the term for the time required to perform a process step, excluding waiting time?
- Lead time
- Cycle time (Correct answer)
- Queue time
- Move time
Correct answer: Cycle time
Cycle time is the time to complete one unit of work in a process step, whereas lead time encompasses all components including queue, move, and wait times.
Question 4: A Bill of Materials (BOM) that shows all components at the same level regardless of where they appear in the product structure is called a:
- Modular BOM
- Single-level BOM
- Indented BOM
- Summarized parts list (Correct answer)
Correct answer: Summarized parts list
A summarized parts list (or summarized BOM) consolidates all components to a single level, showing total quantities needed regardless of their position in the product hierarchy.
Question 5: Which capacity planning technique uses historical ratios of labor or machine hours per unit of output to estimate future capacity needs?
- Capacity requirements planning (CRP)
- Resource requirements planning
- Rough-cut capacity planning (Correct answer)
- Bill of resources
Correct answer: Rough-cut capacity planning
Rough-cut capacity planning uses overall factors or bills of resources to quickly validate whether the master production schedule is feasible before detailed CRP.
Question 6: The process of allocating available capacity to production orders based on their priority is known as:
- Dispatching (Correct answer)
- Load leveling
- Sequencing
- Expediting
Correct answer: Dispatching
Dispatching is the function of selecting and sequencing available jobs to be run at a work center, assigning them to specific machines or workers.
Question 7: A company has a finished goods inventory turns ratio of 12. What is the average number of days of inventory on hand?
- 12 days
- 30 days (Correct answer)
- 36 days
- 52 days
Correct answer: 30 days
Days of inventory = 365 / inventory turns = 365 / 12 ≈ 30.4 days, meaning the company holds approximately 30 days of inventory on average.
CPIM Sample 2
A company uses a periodic review inventory system.
Which parameter defines how often the inventory level is checked?