QUESTION: 49

Price negotiation is most appropriate when purchasing which of the following product categories?

Commodities
Standard products
Items of small value
Made-to-order (MTO) items

Answer(s): A

Explanation:

Price negotiation is most appropriate when purchasing commodities. Commodities are products or materials that are standardized, widely available, and have low differentiation. Examples of commodities include metals, grains, oil, gas, etc. Price negotiation is a process of bargaining with the supplier to obtain the best possible price for the purchase. Price negotiation is suitable for commodities because they have high price volatility, meaning that their prices fluctuate frequently and unpredictably due to changes in supply and demand, market conditions, and other factors. Price negotiation can help the buyer to take advantage of the price fluctuations and secure a lower price or a better contract term with the supplier. Price negotiation can also help the buyer to reduce the total cost of ownership, which includes not only the purchase price but also the costs of transportation, storage, quality, and risk.

Reference:

1 How to negotiate price: negotiation tips for salespeople 3 2 CPIM Exam Reference - Association for Supply Chain Management 1

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QUESTION: 50

Which of the following capacity planning methods uses the master production schedule (MPS) as its primary input?

Resource planning
Rough-cut capacity planning (RCCP)
Finite loading
Input/output analysis

Answer(s): B

Explanation:

Rough-cut capacity planning (RCCP) is a type of capacity planning method that uses the master production schedule (MPS) as its primary input. RCCP is a technique for checking the feasibility of the MPS by comparing the available capacity of critical resources (such as machines, labor, or materials) with the capacity required by the MPS. RCCP helps to identify and resolve any potential capacity problems or bottlenecks at an aggregate level, before committing to the MPS. RCCP can also be used to evaluate alternative MPS scenarios and to support the sales and operations planning (S&OP) process.

Reference:

1 Rough Cut Capacity Planning (RCCP) - Definition, Example, and ... 3 2 CPIM Exam Reference - Association for Supply Chain Management

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QUESTION: 51

When the discrete available-to-promise (ATP) method is used, the master production receipt quantity is committed to:

any request for shipment prior to the planning time fence.
any request for shipment prior to the demand time fence (DTF).
requests only for shipment before the next master production schedule (MPS) receipt.
requests only for shipment in the period of the receipt.

Answer(s): C

Explanation:

The discrete available-to-promise (ATP) method is a calculation based on the available-to-promise figure in the master schedule. For the first period, the ATP is the sum of the beginning inventory plus the MPS quantity minus backlog for all periods until the item is master scheduled again. For other periods, the quantity that is available for an item is based on the quantity available within an individual purchase. Therefore, the master production receipt quantity is committed to requests only for shipment before the next MPS receipt.

Reference:

* 1: APICS CPIM Part 2 Exam Content Manual, Version 8.0, p. 29
* 2: NetSuite Applications Suite - Available to Promise Methods.

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QUESTION: 52

In which of the following phases of the product life cycle is product price most effective in influencing demand?

Introduction
Growth
Maturity
Decline

Answer(s): A

Explanation:

Product price is most effective in influencing demand in the introduction phase of the product life cycle, when the product is new and unfamiliar to the market. In this phase, customers are not aware of the product's benefits, features, or quality, and may be reluctant to try it. Therefore, a lower price can help attract customers and stimulate demand, as well as deter potential competitors from entering the market. A lower price can also help the product gain market share and establish a loyal customer base. As the product moves to the growth, maturity, and decline phases, price becomes less effective in influencing demand, as other factors, such as product differentiation, quality, promotion, and customer satisfaction, become more important.

Reference:

* Product Life Cycle Explained: Stage and Examples
* The 6 Stages of the Product Life Cycle [+Examples]
* Product Life Cycle - Definition, Stages, Usage

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