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APICS Certified in Planning and Inventory Management(Part 2) Sample Questions:

1. A company can easily change its workforce, but inventory carrying costs are high. Which of the followingstrategies would bemost appropriate during times of highly fluctuating demand?

A) Produce at a constant level
B) Produce to the sales forecast
C) Produce to backorders
D) Produce to demand

2. An online retailer moves from delivering hard copy books to offering digital downloads only. This action may result in an increased possibility of:

A) forecast inaccuracy.
B) supply disruptions.
C) supply delays.
D) loss of intellectual property.

3. An advantage of activity-based costing (ABC) is:

A) it uses cost drivers to allocate costs to products.
B) it is easier to establish standard costs.
C) it enables overhead costs to be allocated evenly across all products.
D) it allows raw material costs to be allocated on a per unit basis.

4. Substituting capital equipment in place of direct labor can be economically justified for which of the following scenarios?

A) Functional layouts are being utilized
B) Implementing a pull system in production
C) Material prices are forecasted to increase
D) Volumes are forecasted to increase

5. Which of the following approaches should first be considered as part of process improvement?

A) Buying better and faster equipment
B) Applying stricter quality control
C) Making better use of existing resources
D) Hiring more skilled people to perform the job

Solutions: