APICS CPIM-Part-2 Exam Questions - Navigate Your Path to Success

Correct : B

Activity-based costing (ABC) is a method of allocating costs to products or services based on the activities that consume resources in the production or delivery process. ABC identifies the cost drivers, which are the factors that cause or influence the amount of resources used for each activity. ABC then assigns costs to products or services based on the amount of cost drivers they use. An advantage of ABC is that it uses cost drivers to allocate costs to products, which provides a more accurate and realistic picture of the cost structure and profitability of each product or service. ABC helps to identify the value-added and non-value-added activities, and to eliminate or reduce the waste and inefficiency in the process. ABC does not allow raw material costs to be allocated on a per unit basis, as raw material costs are usually considered as direct costs that can be traced to each product or service. ABC does not make it easier to establish standard costs, which are the predetermined or expected costs of producing or delivering a product or service. ABC does not enable overhead costs to be allocated evenly across all products, as overhead costs are the indirect costs that cannot be traced to each product or service. ABC allocates overhead costs based on the cost drivers, which may vary for different products or services.Reference: CPIM Exam Content Manual Version 7.0, Domain 8: Manage Quality, Continuous Improvement, and Technology, Section 8.2: Continuous Improvement Concepts, p. 46; Activity-Based Costing (ABC) Definition; Activity-based costing.

Correct : C

A priority control technique is a method of determining the sequence and timing of production orders in a manufacturing system. A priority control technique can be either push or pull, depending on whether the production orders are initiated by the upstream or downstream processes. A cellular production system is a process of manufacturing that organizes the machines and workers into self-contained cells that can produce different products efficiently and flexibly. A cellular production system is usually based on the principles of lean manufacturing and group technology, which aim to eliminate waste and improve quality.

A pull production activity control (PAC) is a priority control technique that is most appropriate for a firm using a cellular production system. A pull PAC is a method of controlling the flow of materials and work-in-progress in a manufacturing system by using signals from the downstream processes to trigger the release of production orders from the upstream processes. A pull PAC helps to reduce inventory, lead time, and overproduction, as well as to synchronize the production with the customer demand. A pull PAC can be implemented using various techniques, such as kanban cards, containers, or electronic signals.

A shortest processing time (SPT) rule is a priority control technique that assigns the highest priority to the production order that has the shortest processing time at each workstation. An SPT rule helps to minimize the average waiting time and flow time of the production orders, as well as to increase the utilization of the machines and workers. However, an SPT rule does not consider the due dates or the customer demand of the production orders, and may result in poor customer service or low delivery performance.

A distribution requirements planning (DRP) is a priority control technique that determines the quantity and timing of finished goods to be delivered to various distribution centers or customers. A DRP is based on the forecasted demand, the inventory status, and the transportation lead time of the finished goods. A DRP helps to optimize the inventory level, reduce stockouts, and improve customer service. However, a DRP is not suitable for a cellular production system, as it does not control the flow of materials and work-in-progress within the manufacturing system.

A push production activity control (PAC) is a priority control technique that initiates the production orders based on the master production schedule or the forecasted demand from the upstream processes. A push PAC releases the production orders in batches or lots, regardless of the capacity or status of the downstream processes. A push PAC may result in high inventory, long lead time, and overproduction, as well as low flexibility and responsiveness to customer demand. A push PAC is not compatible with a cellular production system, as it contradicts the principles of lean manufacturing and group technology.Reference: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.1: Detailed Scheduling Concepts, p. 36;Cellular manufacturing; [Production Activity Control].