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APICS Certified in Planning and Inventory Management(Part 2) Sample Questions:

1. A supplier making a part with a specified dimension of 50 mm + 0.3 mm changes the tolerance range to + 0.5 mm. Which ofthe following pairs correctly identifies the changes to the percentage of defective parts and the process capability index?

A) The percentage of defective parts increases, and the process capability index decreases.
B) The percentage of defective parts increases, and the process capability index increases.
C) The percentage of defective parts decreases, and the process capability index decreases.
D) The percentage of defective parts decreases, and the process capability index increases.

2. Potential reasons to make instead of buy a product may include:

A) less capital investment, large volume changes, and reduce cost.
B) eliminate risks associated with single sourcing, create intermittent flow, and reduce cost.
C) maintain core competencies, increase capital expense, and reduce cost.
D) maintain quality, reduce cost, and keep confidential processes within the firm.

3. An advantage of adopting a capacity-leading strategy is that:

A) there is sufficient demand to consume capacity.
B) there is sufficient capacity to meet demand.
C) overcapacity problems are minimized.
D) all demand is satisfied, and profit is maximized.

4. An advantage of activity-based costing (ABC) is:

A) it enables overhead costs to be allocated evenly across all products.
B) it allows raw material costs to be allocated on a per unit basis.
C) it uses cost drivers to allocate costs to products.
D) it is easier to establish standard costs.

5. When a certified supplier's delivery performance declines, a company should respond initially by:

A) tightening performance criteria for the supplier.
B) increasing the standard lead time of the component to allow for supplier delays.
C) communicating with the supplier to investigate the source of the problem.
D) establishing a temporary buffer of finished goods inventory at the supplier.

Solutions: