QUESTION: 29

Which of the following circumstances would cause a move from acceptance sampling to 100% inspection?

History shows that the quality level has been stable from lot to lot.
The company uses one of its qualified suppliers.
Downstream operators encounter recurring defects.
The percent of defects is expected to be greater than 5%.

Answer(s): C

Explanation:

Acceptance sampling is a statistical quality control technique that involves inspecting a sample of products or materials from a lot and deciding whether to accept or reject the lot based on the sample results. Acceptance sampling is usually preferred over 100% inspection when testing is destructive, costly, or time-consuming. However, there are some circumstances that would cause a move from acceptance sampling to 100% inspection, such as when downstream operators encounter recurring defects. This means that the acceptance sampling plan is not effective in detecting and preventing defective products or materials from reaching the next stage of the production process,

which may result in rework, scrap, customer complaints, or safety issues. In this case, 100% inspection may be necessary to ensure that every product or material meets the quality standards and specifications, and to identify and correct the root causes of the defects.

Reference:

1 Acceptance sampling - Wikipedia 4 2 100% Inspection or Sampling Inspection? Which is Best. 3 CPIM Exam Reference - Association for Supply Chain Management 1

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QUESTION: 30

In pyramid forecasting, the "roll up" process begins with:

combining individual product item forecasts into forecasts for product families.
combining forecasts for product families into a total business forecast.
allocating total business forecast changes to product families.
allocating product family forecast changes to individual products.

Answer(s): A

Explanation:

Pyramid forecasting is a method of forecasting that uses a hierarchical structure of data to improve the accuracy and consistency of the forecasts. The lowest level of the pyramid represents the most detailed data, such as individual product items, while the higher levels represent more aggregated data, such as product families or total business. The "roll up" process is the process of aggregating the forecasts from the lower level to the higher level, starting with the most detailed level. This process helps to align the forecasts across different levels and reduce the forecast error.

Reference:

1: Pyramid Forecasting Process 2: Rolling Forecast Model | FP&A Tutorial + Excel Template
3: ROLL-UP FORECASTS

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QUESTION: 31

Exhibit:

A company has prioritized customers A, B, and C, filling orders in that sequence.
What are the impacts to customer service levels for customers B and C?

100% service levels for B and C
Customer B has higher service level
Customer C has higher service level
Customer B and C have same service level

Answer(s): B

Explanation:

Customer service level is the percentage of customer orders that are fulfilled on time and in full. A company that prioritizes customers A, B, and C, filling orders in that sequence, will have different impacts on the service levels for customers B and C, depending on the availability of stock and the order quantities. Based on the table in the exhibit, customer B will have a higher service level than customer C, because customer B will receive all the ordered units for item 468 and item 617, while customer C will only receive partial units for item 468 and none for item 617. Customer C will also receive none of the ordered units for item 643, while customer B will receive some of them. Therefore, customer B will have a higher percentage of orders fulfilled on time and in full than customer C.

Reference:

1 Customer Service Level: Definition, Standards, Measuring | SupportYourApp 2

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QUESTION: 32

Which of the following statements correctly describes the relationship between the strategic plan and the business plan?

These are two names for the same plan.
The strategic plan constrains the business plan.
The two plans are developed independently.
The two plans are the output of a single process.

Answer(s): B

Explanation:

A strategic plan is a document that outlines the long-term vision, goals, and direction of an organization. It defines the scope and purpose of the organization, identifies the key stakeholders and customers, analyzes the external and internal environment, and sets the strategic priorities and initiatives. A business plan is a document that describes the details of a specific business venture, product, or service. It covers the market analysis, marketing strategy, financial plan, operational plan, and risk assessment. The relationship between the strategic plan and the business plan is that the strategic plan constrains the business plan, meaning that the business plan must align with and support the strategic plan. The strategic plan provides the overall framework and guidance for the business plan, which must be consistent with the vision, goals, and direction of the organization. The business plan must also consider the opportunities and threats identified in the strategic plan, and show how the business venture, product, or service will contribute to the strategic objectives and performance indicators.

Reference:

1 Strategic Plan vs. Business Plan: What's the Difference? 4 2 Business Plan Definition - Entrepreneur Small Business Encyclopedia 5 3 Difference between a

Business vs Strategic Plan | OnStrategy 6 4 CPIM Exam Reference - Association for Supply Chain Management 1

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