CPIM-8.0 Exam Dumps - APICS CPIM Questions and Answers

The economic order quantity (EOQ) model is a formula that calculates the optimal order quantity that minimizes the total inventory costs, such as ordering costs and holding costs. The EOQ model is based on several assumptions, one of which is that the order preparation costs and inventory-carrying costs are constant and known. This means that the costs of placing and receiving an order, and the costs of storing and maintaining the inventory, do not change with the order quantity or the inventory level, and that they can be estimated accurately12.

The other options are not correct because:

•A. Customer demand is known but seasonal. This is not an assumption of the EOQ model, but rather a violation of it. The EOQ model assumes that the customer demand is constant and known, and that the orders are placed at regular intervals. However, if the customer demand is seasonal, it means that it varies over time and may not be predictable. This can affect the accuracy and applicability of the EOQ model, as the optimal order quantity may change with the demand pattern12.

•B. Items are purchased and/or produced continuously and not in batches. This is not an assumption of the EOQ model, but rather a contradiction of it. The EOQ model assumes that the items are purchased and/or produced in batches, and that the inventory level decreases gradually until it reaches zero, at which point a new order is placed and received. However, if the items are purchased and/or produced continuously, it means that there is no need to place orders or maintain inventory, and the EOQ model becomes irrelevant12.

•D. Holding costs, as a percentage of the unit cost, are variable. This is not an assumption of the EOQ model, but rather a complication of it. The EOQ model assumes that the holding costs, as a percentage of the unit cost, are constant and known. This means that the cost of storing and maintaining one unit of inventory does not depend on the unit cost of the item, and that it can be estimated accurately. However, if the holding costs, as a percentage of the unit cost, are variable, it means that the cost of storing and maintaining one unit of inventory changes with the unit cost of the item, and that it may not be easy to estimate. This can affect the accuracy and applicability of the EOQ model, as the optimal order quantity may depend on the unit cost of the item12.

References := 1 Economic Order Quantity Model in Inventory Management - Investopedia1 2 Economic Order Quantity: What Does It Mean and Who Is It Important For? - Investopedia2

Total productive maintenance (TPM) is a holistic approach to equipment maintenance that strives to achieve perfect production: no breakdowns, no small stops or slow running, no defects, and no accidents. TPM emphasizes proactive and preventative maintenance to maximize the operational efficiency of equipment. It blurs the distinction between the roles of production and maintenance by placing a strong emphasis on empowering operators to help maintain their equipment. The implementation of a TPM program creates a shared responsibility for equipment that encourages greater involvement by plant floor workers. In the right environment, this can be very effective in improving productivity and quality12. One of the eight pillars of TPM is planned maintenance, which aims to reduce the frequency of breakdowns and minimize the impact of failures on production. Planned maintenance involves scheduling maintenance activities based on the actual condition of the equipment, rather than on a fixed time interval. This reduces the risk of over-maintenance or under-maintenance, and optimizes the use of resources. Planned maintenance also involves improving the maintainability and reliability of the equipment, by identifying and eliminating the root causes of failures, and implementing design changes or modifications34. References: Total Productive Maintenance | Lean Production, Total productive maintenance - Wikipedia, Total Productive Maintenance (TPM): 8 Pillars, Benefits and … - Appvizer

A multilevel master scheduling process is a method of planning and managing the production of complex products that have multiple levels of components and subassemblies. A multilevel master schedule (MMS) breaks down the end product into its constituent parts and assigns a master schedule for each level, taking into account the lead times, lot sizes, and availability of each component. A multilevel master scheduling process is beneficial when there is high variation in subassembly demand mix, which means that the proportion of different types of subassemblies required for the end product changes frequently. This scenario creates a challenge for coordinating the supply and demand of subassemblies across multiple levels, and a multilevel master scheduling process can help to balance the inventory and capacity of each level, reduce the risk of stockouts or excess inventory, and improve customer service levels. References := CPIM Part 2 Exam Content Manual, Version 8.0, ASCM, 2021, p. 23. CPIM Part 2 Learning System, Version 8.0, Module 2, Section B, Topic 3.

Demonstrated capacity is the actual output achieved by a resource or a system over a period of time, such as a day, a week, or a month. It is determined from actual results, such as production records, time studies, or historical data. Demonstrated capacity reflects the past performance, not the future load, of a resource or a system. It may be lower or higher than the rated capacity, which is the theoretical or design capacity of a resource or a system. Demonstrated capacity considers utilization and efficiency factors, such as machine availability, operator skills, product mix, quality issues, or maintenance schedules, that affect the actual output. References:

Managing Supply Chain Operations, Chapter 5: Capacity Planning and Management, Section 5.2: Capacity Planning Decisions, page 132-133.

Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, Chapter 6: Capacity Management, Section 6.2: Capacity Planning, page 156-157.

CPIM 8.0 Exam Content Manual Preview, Module 5: Plan and Manage Supply, Section 5.1: Plan and Manage Capacity, page 9.