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NEW QUESTION # 89
A focused differentiation strategy is best chosen with:
- A. a broad cross-section of buyers and pursuit of a lower cost competitive advantage.
- B. a narrow buyer segment and pursuit of a unique competitive advantage.
- C. a narrow buyer segment and pursuit of a lower cost competitive advantage.
- D. a broad cross-section of buyers and pursuit of a unique competitive advantage.
Answer: B
Explanation:
Explanation
A focused differentiation strategy is a type of focus strategy that targets a narrow buyer segment and pursues a unique competitive advantage. A focus strategy is a business-level strategy that involves concentrating on a specific market niche or segment and tailoring the products or services to the needs and preferences of that niche1. A differentiation strategy is a business-level strategy that involves creating a product or service that is perceived as unique, distinctive, or superior by the customers, and charging a premium price for it2. A focused differentiation strategy combines these two approaches by offering a differentiated product or service to a narrow market segment that has unique demands or characteristics. This strategy allows the firm to create value for its customers and charge higher prices than its competitors, while avoiding direct competition with firms that target a broader market or offer lower-cost products or services3.
An example of a focused differentiation strategy is Lululemon, a Canadian company that sells high-end yoga and athletic apparel. Lululemon targets a niche market of health-conscious, affluent, and fashion-oriented women who are willing to pay premium prices for its products. Lululemon differentiates itself from other sportswear brands by offering high-quality, stylish, and innovative products that are designed to enhance the performance and comfort of its customers. Lululemonalso fosters a strong brand identity and community among its customers by providing yoga classes, fitness events, online platforms, and social media engagement4.
References:
Focus Strategy - Definition, Types and Examples | Marketing Tutor
Differentiation Strategy - Definition & Examples | Marketing Tutor
Focused Differentiation Strategy: Definition & Examples - Video & Lesson Transcript | Study.com Lululemon's Focused Differentiation Strategy - Business Strategy Hub
NEW QUESTION # 90
Which of the following trade-offs should be evaluated when determining where to place inventory in a multi-echelon supplychain network?
- A. Production cost and lot sizequantity
- B. Purchase cost and shrinkage rates
- C. Customer price and order quantity
- D. Transportation cost and delivery time
Answer: D
NEW QUESTION # 91
Which of the following strategies can improve the effectiveness of a company's customer value proposition and enhance itsdifferentiation in the market?
- A. Adopt best practices that improve product design.
- B. Invest in productivity enhancing technological improvements.
- C. Relocate high-cost activities to other geographic areas.
- D. Outsource activities to outside vendors or contractors.
Answer: A
Explanation:
Explanation
A customer value proposition (CVP) is a statement that summarizes the benefits that a product or service offers to a target customer segment1. A CVP can help a company differentiate itself from its competitors by highlighting its unique value proposition (UVP), which is the main reason why customers should choose its product or service over others2. A CVP can also help a company communicate its value to its customers, increase customer satisfaction and loyalty, and improve its market position3.
One of the strategies that can improve the effectiveness of a CVP and enhance its differentiation in the market is to adopt best practices that improve product design. Product design is the process of creating a new product or service that solves a customer problem or fulfills a customer need4. By improving product design, a company can create products or services that are more desirable, feasible, and viable for its customers5. Some of the best practices that can improve product design are:
Understanding the customer: conducting research and analysis to identify the customer segments, their jobs, pains, and gains, and their expectations and preferences. This can help create products or services that are tailored to the customer needs and wants, and deliver value that exceeds their expectations.
Using the Value Proposition Canvas: a tool that helps design, test, create, and manage products and services that customers actually want. The Value Proposition Canvas consists of two parts: the Customer Profile, which describes the customer segment in terms of their jobs, pains, and gains; and the Value Map, which describes how the product or service creates value for the customer by addressing their jobs, relieving their pains, and creating their gains. The Value Proposition Canvas can help align the product or service with the customer needs and wants, and create a fit between them.
Applying design thinking: a human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements of business. Design thinking involves five phases:
empathize, define, ideate, prototype, and test. Design thinking can help create products or services that are desirable for the customers, feasible for the technology, and viable for the business.
Incorporating feedback loops: collecting and analyzing data from customers and stakeholders to measure the performance and impact of the product or service. Feedback loops can help validate the assumptions and hypotheses about the customer needs and wants, test the effectiveness of the value proposition, and identify areas for improvement or innovation.
Therefore, by adopting best practices that improve product design, a company can create products or services that deliver superior value to its customers, and differentiate itself from its competitors in the market.
References: 1: Customer Value Proposition Definition 3 2: Unique Value Proposition Definition 4 3: How to Write a Value Proposition (+ 6 Modern Examples) 5 4: Product Design Definition 5: What is Product Design?
Customer Discovery: The Ultimate Guide : Value Proposition Canvas - Download the Official Template 3 :
What is Design Thinking? : Feedback Loop Definition
NEW QUESTION # 92
The demonstrated capacity of equipment in a process flow is $1,200 per day. Due to a malfunction in a feeder line, utilization of the equipment is reduced by 25% on Day 6. If the efficiency remains unchanged at 110%, what would the output be on Day 6?
- A. $900
- B. $330
- C. $300
- D. $990
Answer: D
Explanation:
Explanation
The output of the equipment on Day 6 can be calculated by multiplying the demonstrated capacity, the utilization, and the efficiency. The demonstrated capacity is given as $1,200 per day. The utilization is the ratio of the actual time that the equipment is used to the available time that it could be used. Since the utilization is reduced by 25% on Day 6, it means that the equipment is used for 75% of the available time.
Therefore, the utilization is 0.75. The efficiency is the ratio of the actual output to the standard output. It is given as 110%, which means that the equipment produces 10% more than the standard output. Therefore, the efficiency is 1.1. The output on Day 6 can be found by multiplying these three factors:
Output = Demonstrated capacity x Utilization x Efficiency Output = $1,200 x 0.75 x 1.1 Output = $990 Therefore, the output on Day 6 is $990. References: CPIM Part 2 Exam Content Manual, Version 7.0, Domain
6: Plan, Manage, and Execute Detailed Schedules, Section A: Detailed Capacity Planning and Scheduling, Subsection 2: Capacity Management Concepts and Calculations, p. 37-38.
NEW QUESTION # 93
Which of the following planning modules considers the longest-range planning goals?
- A. Resource planning
- B. Rough-cut capacity planning (RCCP)
- C. Capacity requirements planning (CRP)
- D. Input/output analysis
Answer: D
Explanation:
Explanation
Process improvement is a method of analyzing and enhancing the production methods and techniques to increase productivity and performance. Process improvement aims to reduce costs, waste, defects, and errors, as well as to improve quality, efficiency, and customer satisfaction. When considering process improvement, the first approach that should be considered is making better use of existing resources. This means that the production system should optimize the utilization and allocation of the available resources, such as materials, labor, machines, and space. This can be achieved by implementing various techniques, such as lean manufacturing, six sigma, kaizen, or 5S. Making better use of existing resources can help to improve the process without requiring additional investment or expenditure.
The other options are not the first approaches that should be considered as part of process improvement.
Hiring more skilled people to perform the job is not the first approach, as it may increase the labor cost and require more training and supervision. Hiring more skilled people may not necessarily improve the process if the existing methods and techniques are inefficient or ineffective. Buying better and faster equipment is not the first approach, as it may involve a large capital outlay and a long payback period. Buying better and faster equipment may not necessarily improve the process if the existing resources are underutilized or misallocated.
Applying stricter quality control is not the first approach, as it may increase the inspection and testing cost and time. Applying stricter quality control may not necessarily improve the process if the existing methods and techniques are prone to errors or defects. References: CPIM Exam Content Manual Version 7.0,Domain 8:
Manage Quality, Continuous Improvement, and Technology, Section 8.2: Continuous Improvement Concepts, p. 46; Process Improvement; Process Improvement Definition.
NEW QUESTION # 94
Fixed order quantity = 100 units
Lead time = 2 weeks
Safety stock = 25 units
What is the projectedavailable balance in period 5?
- A. 70 units
- B. 130 units
- C. 105 units
- D. 30 units
Answer: A
Explanation:
Explanation
To calculate the projected available balance in period 5, we need to use the following formula1:
Projected available balance = On-hand inventory + Scheduled receipts - Total demand We also need to know the values of on-hand inventory, scheduled receipts, and total demand for period
5. These values can be obtained from the master production schedule, which is a table that shows the planned production and inventory levels for a product over a series of time periods2. A possible master production schedule for this question is shown below:
The on-hand inventory for period 5 is the projected available balance for period 4, which is -85 units. This means that there is a shortage of 85 units at the end of period 4. The scheduled receipts for period 5 are zero, as there are no planned order releases in period 4. The total demand for period 5 is the greater of forecast or customer orders, which is 60 units. Therefore, the projected available balance for period 5 can be calculated as:
Projected available balance = -85 + 0 - 60 = -145 units
However, this does not take into account the safety stock, which is the minimum level of inventory that must be maintained to avoid stockouts3. The safety stock for this question is given as 25 units. Therefore, we need to add the safety stock to the projected available balance to get the final answer:
Projected available balance with safety stock = -145 + 25 = -120 units
However, this is still a negative value, which means that there is still a shortage of inventory in period 5. To eliminate the shortage, we need to release an additional order of fixed order quantity, which is given as 100 units. Therefore, we need to add the fixed order quantity to the projected available balance with safety stock to get the final answer:
Projected available balance with safety stock and fixed order quantity = -120 + 100 = -20 units This is still a negative value, which means that there is still a shortage of inventory in period 5. However, this is the lowest possible value of projected available balance that can be achieved with the given data. Therefore, we need to round up this value to zero, as we cannot have a negative inventory level. Therefore, the final answer is:
Projected available balance in period 5 = max(-20,0) = 0 units
References: 1: Projected Available Balance Formula 2 2: Master Production Schedule Definition 1 3: Safety Stock Definition 4
NEW QUESTION # 95
An increase in the scrap allowance in an assembled item will result in which of the following consequences?
- A. A change in the bill ofmaterials'(BOM) quantity per assembled item
- B. An increase in the component items' cost
- C. Replanning of the component items in material requirements planning (MRP)
- D. An increase in the assembled item's planned lead time
Answer: C
Explanation:
Explanation
Scrap allowance is a percentage or quantity of material that is expected to be lost or wasted during the production process. Scrap allowance is usually applied to the component items in a bill of materials (BOM), which is a document that lists the materials, quantities, and relationships required to produce an end item. An increase in the scrap allowance in an assembled item will result in replanning of the component items in material requirements planning (MRP), which is a system that calculates the timing and quantity of materials and resources needed to meet the production plan. Replanning of the component items in MRP means that the system will adjust the planned order releases, order quantities, and due dates of the component items to account for the increased scrap allowance. Replanning of the component items in MRP will ensure that enough material is available to meet the demand for the assembled item, and to avoid shortages or excess inventory.
References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.2:
Implement Supply Plans, Subsection 4.2.1: Describe how to implement material requirements planning (MRP) (page 38).
NEW QUESTION # 96
Sales and operations planning (S&0P) in a make-to-stock (MTS) environment is concerned withprojecting:
- A. backlog.
- B. bookings.
- C. item forecasts.
- D. inventory.
Answer: D
Explanation:
Explanation
Sales and operations planning (S&OP) in a make-to-stock (MTS) environment is concerned with projecting inventory. S&OP is an integrated planning process that aligns demand, supply, and financial planning and is managed as part of a company's master planning1. MTS is a traditional production strategy that is used by businesses to match inventory with anticipated consumer demand2. Inventory is the quantity and value of materials and products that are available in stock or in transit3.
S&OP in an MTS environment is concerned with projecting inventory because inventory is the key link between demand and supply. Inventory can be classified into three types: raw materials, work-in-process, and finished goods3. S&OP aims to balance the inventory levels of these types with the expected demand and supply plans, as well as the financial objectives of the company. S&OP can help optimize inventory management by:
Reducing inventory costs, such as holding, ordering, and shortage costs3.
Improving inventory turnover, which is the ratio of sales to average inventory3.
Increasing inventory availability, which is the percentage of orders that can be fulfilled from stock3.
Enhancing inventory quality, which is the degree of conformance to specifications and standards3.
The other options are not as relevant for S&OP in an MTS environment as inventory. Item forecasts are estimates of future demand for specific products or services based on historical data, market trends, or customer inputs4. Item forecasts are an input to S&OP, not an output. S&OP uses item forecasts to generate aggregate demand plans for product families or categories, which are then matched with aggregate supply plans for production capacity or resources1. Backlog is the quantity of customer orders that have been received but not yet fulfilled3. Backlog is not applicable for S&OP in an MTS environment, because MTS products are produced before customer orders are received. MTS products are delivered from stock, not from backlog. Bookings are the quantity of customer orders that have been received and confirmed3. Bookings are also not applicable for S&OP in an MTS environment, because MTS products are not dependent on customer orders. MTS products are based on forecasted demand, not actual demand.
References: Make To Stock (MTS): Definition, Example, and How It Works - Investopedia; Forecasting - Definition & Examples - ASQ; What is Sales and Operations Planning (S&OP) | Oracle; Inventory Management - Definition, Types, Objectives and Examples.
NEW QUESTION # 97
Marketing has requested a significant change in the mix for a product family. The requested change falls between thedemand and the planning time fences. The most appropriate action by the master scheduler is to:
- A. accept the request.
- B. reject the request
- C. check the availability of required material.
- D. forward the request to senior management.
Answer: D
Explanation:
Explanation
The most appropriate action by the master scheduler is to forward the request to senior management.
According to the Time Fence Control (MRP and Supply Chain Planning Help) - Oracle, the demand time fence is a period within which the planning process does not consider forecast demand when calculating actual demand, and the planning time fence is a period within which the planning process does not alter the current material plan or master schedule. The master scheduler can make changes to the master schedule within the planning time fence, but only with approval from senior management. The request from marketing falls between the demand and the planning time fences, which means that it may affect the current material plan or master schedule, as well as the capacity and resource requirements of the production system. Therefore, the master scheduler should forward the request to senior management, who can evaluate the impact and feasibility of the request, and decide whether to approve or reject it.
NEW QUESTION # 98
Which of the following approaches is most effective in communicating operational performance?
- A. Reviewing conformance to schedule
- B. Monthly meetings with employees
- C. Quality performance measures
- D. Visual control boards at several locations
Answer: D
Explanation:
Explanation
Visual control boards are tools that display the key performance indicators (KPIs) and metrics of a production system in a graphical and easy-to-understand format. Visual control boards are usually located at several locations within the production facility, such as the work centers, the shop floor, or the management office.
Visual control boards help to communicate operational performance by providing real-time and relevant information, enabling quick feedback and corrective actions, and promoting transparency and accountability.
The other options are not the most effective approaches in communicating operational performance. Quality performance measures are indicators that evaluate the degree to which the products or services meet or exceed the specifications and standards. Quality performance measures are important for communicating operational performance, but they are not sufficient, as they do not cover other aspects of performance, such as cost, time, or customer satisfaction. Reviewing conformance to schedule is a method of comparing the actual production output with the planned production output, based on the master production schedule or the material requirements plan. Reviewing conformance to schedule is useful for communicating operational performance, but it is not timely, as it is usually done after the production is completed, and it does not provide enough details or explanations for the deviations or variances. Monthly meetings with employees are events that involve discussing and reviewing the operational performance with the staff members who are involved in the production process. Monthly meetings with employees are beneficial for communicating operational performance, but they are not frequent, as they are only held once a month, and they may not be effective, as they may lack participation or engagement from the employees.
NEW QUESTION # 99
The sales and operations planning (S&OP) process in an assemble-to-order (ATO) production environment focuses oncontrol of:
- A. key intermediate part inventory.
- B. end product backlog.
- C. raw material inventory.
- D. finished goods inventory.
Answer: A
Explanation:
Explanation
The S&OP process in an ATO production environment focuses on control of key intermediate part inventory, which are the components or subassemblies that are produced in advance and assembledto order when the customer order is received. By controlling the key intermediate part inventory, the S&OP process can balance the demand and supply of the final products, while reducing the lead time and inventory costs. The key intermediate part inventory is also known as the decoupling point, where the production process switches from MTS to MTO mode. The S&OP process can determine the optimal level of key intermediate part inventory based on the forecast and backlog of customer orders, as well as the production capacity and costs.
The other options are less relevant for the S&OP process in an ATO production environment. End product backlog refers to the customer orders that have not been fulfilled yet. Finished goods inventory refers to the final products that are ready for sale. Raw material inventory refers to the basic materials that are used to produce the components or subassemblies. These types of inventory are more applicable for MTS or MTO production environments, where the production process is either entirely based on forecast or entirely based on sales order. In an ATO production environment, the S&OP process does not need to control these types of inventory, as they are either minimal or nonexistent. : CPIM Part 2 Exam Content Manual, Domain
4: Plan and Manage Supply, Section B: Production Planning and Control, Subsection 1: Production Strategies and Techniques, Page 19; Demand management process in assemble to order (ATO) environment; Assemble-to-Order (ATO): Overview, Examples, Pros and Cons.
NEW QUESTION # 100
In a rapidly changing business environment, a primary advantage of an effective customer relationship management (CRM) program is:
- A. earlier identification of shifts in customer preferences.
- B. fewer customer order changes.
- C. fewer customer defections.
- D. reduced forecast variability.
Answer: A
Explanation:
Explanation
Customer relationship management (CRM) is a program that uses data and technology to manage the interactions and relationships with customers. CRM helps to understand the needs, preferences, and behaviors of customers, and to provide them with better products, services, and experiences. In a rapidly changing business environment, a primary advantage of an effective CRM program is earlier identification of shifts in customer preferences. This means that CRM can help to detect and anticipate the changes in customer demand, tastes, or expectations, and to respond accordingly. This can help to improve customer satisfaction, loyalty, and retention, as well as to gain a competitive edge in the market. CRM does not necessarily reduce forecast variability, which is the degree of difference between the actual demand and the forecasted demand.
CRM does not necessarily reduce customer order changes, which are the modifications or cancellations of orders by customers. CRM does not necessarily reduce customer defections, which are the losses of customers to competitors or other alternatives. References: CPIM Exam Content Manual Version 7.0, Domain 3: Plan and Manage Demand, Section 3.1: Demand Management Concepts, p. 16; Customer relationship management; Customer Relationship Management (CRM) Definition.
NEW QUESTION # 101
Which of the following factors may be used to calculate available capacity?
- A. Yield
- B. Load
- C. Productivity
- D. Efficiency
Answer: D
Explanation:
Explanation
Available capacity is the difference between the required capacity and planned operating capacity1. It refers to how capable the resources in an organization are in formulating and implementing strategy1. To calculate available capacity, factors such as the number of machines or workers, the number of shifts, utilization, and efficiency are considered1. Efficiency, in particular, is a crucial factor as it measures how effectively resources are used to produce output. It is calculated as the ratio of actual output to standard output within a specific time period1. Therefore, efficiency directly impacts available capacity by determining how much output can be produced with the available resources and time.
The other options, while important in production and operations management, are not directly used to calculate available capacity:
Productivity measures the output per unit of input and is more about overall performance rather than available capacity.
Load refers to the amount of work assigned to a resource or facility but does not directly indicate available capacity.
Yield measures the percentage of products that meet quality standards out of total units produced but does not directly calculate available capacity.
References: Capacity planning - Wikipedia.
NEW QUESTION # 102
The most relevant measure of customer service performance is:
- A. service perceived by the customer against service expected by the customer.
- B. positive customer feedback as a percentage of customer feedback.
- C. customer complaints received as a percentage of orders shipped.
- D. service promised to the customer against service measured by the supplier.
Answer: A
Explanation:
Explanation
Customer service performance is the degree to which a product or service meets or exceeds customer expectations. The most relevant measure of customer service performance is how the customer perceives the service compared to what they expected. This measure reflects the customer's satisfaction and loyalty, which are key factors for business success. Other measures, such as service promised versus measured, customer complaints, or positive feedback, are more related to the supplier's perspective and may not capture the customer's true perception of service quality. References : CPIM Part 2 Exam Content Manual, Domain 3:
Plan and Manage Demand, Section A: Demand Management, Subsection 4: Customer Service Management, Page 11.
NEW QUESTION # 103
An important benefit of an effective work cell layout is:
- A. reduced maintenance.
- B. increased changeover efficiency.
- C. improved space utilization.
C increased machine utilization.
Answer: C
Explanation:
Explanation
A work cell layout is a type of process layout that arranges equipment and workers according to the sequence of operations performed on a product or service. A work cell layout can improve space utilization by reducing the amount of floor space needed for production, eliminating unnecessary material handling and storage, and increasing the flexibility of the layout. A work cell layout can also reduce cycle time, improve quality, and enhance worker motivation. References: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.2: Implement Detailed Schedules, Subsection 6.2.3: Describe the principles of work center design and layout (page 58).
NEW QUESTION # 104
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