Studying for the APICS CPIM Exam

84 Pages·2015·1.18 MB·English

Version 5.0
Stock #09051-V50
APICS CPIM
Exam Content Manual

Version 5.0

Visit apics.org/ecmerrata for APICS CPIM Exam Content Manual errata.
Internet links cited in the bibliographic references can be found in a more usable format on the
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©2016 APICS

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Stock #09051-V50

09051-V50

Table of Contents
Letter to Candidates ................................................................................................................. ii
Introduction .............................................................................................................................. iv
About the APICS CPIM Examinations ...................................................................................... iv
Question Format ................................................................................................................................ v
Taking the Test .................................................................................................................................. vi
Interpreting Test Scores ................................................................................................................... vi
Studying for the APICS CPIM Exam ........................................................................................ vii
APICS CPIM References ................................................................................................................... vii
References For CPIM Exam Modules ............................................................................................ viii
Terminology ........................................................................................................................................ x
Supplemental Glossary .................................................................................................................. xxxi
Additional Resources for APICS CPIM Candidates ............................................................. xxxi
APICS CPIM Instructor-Led Review Courses ................................................................................. xxxi
Independent Study Courses ......................................................................................................... xxxii
APICS Educational Programs ........................................................................................................ xxxii
APICS Online Study Tools ............................................................................................................. xxxii
CPIM Exam Simulator ................................................................................................................... xxxii
APICS Certified Fellow in Production and Inventory Management (CFPIM) ..................... xxxii
APICS CPIM Certification Maintenance: Continuing Professional Development ............ xxxiii
The Importance of Certification Maintenance ........................................................................... xxxiii
APICS Code of Ethics .......................................................................................................... xxxiii
Basics of Supply Chain Management ..................................................................................... 1
Master Planning of Resources ................................................................................................ 8
Detailed Scheduling and Planning ........................................................................................ 15
Execution and Control of Operations .................................................................................... 26
Strategic Management of Resources ................................................................................... 33
Answers to Sample Questions .............................................................................................. 38

CPIM Exam Content Manual i
Letter to Candidates 1. Entry module—Basics of Supply Chain
Management: Terminology and basic

Dear Candidate: concepts related to managing the flow
of materials from suppliers to customers
For more than a generation, the Certified in both internal and external throughout
Production and Inventory Management (CPIM) the supply chain
program has been recognized as the international
standard for individual assessment in the field of 2. Core competency modules—Master
operations managements as it relates to Planning of Resources, Detailed Scheduling
transformation of products and services. Initiated and Planning, Execution and Control of
by APICS in 1973, it provides a standard for Operations: Available methodologies and
individuals and organizations to evaluate their techniques to drive processes and the
knowledge of this evolving field. APICS has application of these techniques
administered more than 1 million tests in over 40
3. Capstone module—Strategic Management
countries, and more than 100,000 professionals
of Resources: Choosing the appropriate
have earned the APICS CPIM designation—3,000
structures and methodologies to achieve
of them at the Fellow level. The mission of the
organizational strategic objectives and an
APICS CPIM program is to be the premier
understanding of the integration of
professional certification for supply chain and
operations within the greater context of
operations management that tests the
the organization
candidate’s knowledge and understanding of the

principles and practices of operations and The following is a summary of each of the APICS
inventory management. The APICS CPIM program CPIM modules.
is designed to educate individuals in the various
concepts, methodologies, terminology, and Basics of Supply Chain Management (BSCM)
integration of topics within the supply chain and As the introductory module, Basics of Supply
operations manage- ment function and to test Chain Management introduces the material
candidates’ in-depth knowledge of these presented in depth in the other four modules.
concepts. APICS has worked to ensure that APICS Experience has shown us that APICS CPIM
CPIM exams are consistently reliable and that the candidates who master the material in Basics
highest professional standards are used to of Supply Chain Management first find the
develop and administer the program. other modules easier to understand;
therefore, we strongly recommend that all
Because organizations operate in a changing APICS CPIM candidates start with this module.
and challenging international environment,
the APICS body of knowledge continues to This module introduces the definitions and
grow to include recognized concepts and tools concepts for planning and controlling the flow of
to improve competiti- veness and products and services into, though, and out of an
effectiveness organizations. The CPIM Exam organization. Many of the key terms in this module
Content Manual (ECM) is updated regularly to are expanded in the other modules. This module
reflect these changes in the body of explains funda- mental relationships among the
knowledge and to assist candidates in their various activities that may occur in the supply
understanding of the scope of material chain network from suppliers to customers. In
covered in the program. addition, the module covers types of
manufacturing and service systems, forecasting,
Using a typical business process orientation, the
master planning, material requirements planning,
APICS CPIM program integrates individual
capacity management, production activity control,
modules in a progression of increased
purchasing, inventory management, and distri-
understanding.
bution. Four main management philosophies are
It is highly recommended that candidates
covered: enterprise resources planning, lean,
follow this sequence of examinations to
quality management, and the theory of constraints.
increase both understanding and success:
ii ©APICS
Master Planning of Resources (MPR) Strategic Management of Resources (SMR)
In Master Planning of Resources, candidates In Strategic Management of Resources,
explore processes used to develop sales and candidates explore the relationship of existing
operations plans, identify and assess internal and emerging processes and technologies to
and external demand management operations strategy and supply chain-related
requirements, planning and replenishment in functions for both manufacturing and service
a networked distribution environment, and organizations. The module addresses three
gain an understanding of the importance of main topics: understanding the business
producing feasible master schedules that are environment, developing operations strategy,
consistent with business policies, objectives, and implementing operations strategy. For
and resource constraints. The module focuses maximum comprehension, candidates are
on developing and validating a plan of supply; strongly encouraged to be familiar with the
relating management of demand to information and concepts outlined in the other
manufacturing, distribution and service APICS CPIM modules before taking this
environments; and developing and validating course. Historical performance data confirms
the master schedule. that candidates who successfully complete
the other four modules approximately double
Detailed Scheduling and Planning (DSP) their chances of passing the Strategic
In Detailed Scheduling and Planning, Management of Resources capstone module.
candidates focus on the various techniques
for inventory, procurement, and material and The APICS CPIM program continues to evolve,
capacity scheduling. This module includes incorporating relevant and current concepts
detailed descriptions of material requirements and techniques into the body of knowledge,
planning, capacity requirements planning, such as supply chain management, lean,
inventory management practices, and service industries, globalization, theory of
procurement and supplier planning. constraints, sales and operations planning,
Techniques, such as material and capacity- outsourcing, critical chain, and sustainability.
constrained scheduling, are included and APICS CPIM is an outstanding educational
applicable to a variety of manufacturing and program, and APICS relies on your comments
service organizations. Candidates will also and suggestions to maintain and improve the
become familiar with sustainable practices, program for future candidates. We wish you
supplier partnerships, lean principles, and success in your pursuit of your operations
outsourcing strategies and techniques. management knowledge.

Execution and Control of Operations (ECO)
Execution and Control of Operations focuses
on four main areas: execution of operational
plans and schedules, control of the work
completed and the analysis of results, the
management of and communication in the
workplace, and the importance of utilizing
appropriate design principles. The module
explains techniques for scheduling and
controlling operations within available
capacity and deals with the execution of
quality initiatives, cost management, and
problem solving. Finally, this module presents

techniques for making the most of resources,

the environment, and continuous
William R. Leedale, CFPIM, CIRM, and CSCP
improvement activities.
Chair, CPIM Subcommittee

CPIM Exam Content Manual iii
Introduction Sufficient references are given for each
topical area to provide different approaches to

material covered in each module and different
This ECM provides assistance for those
styles of presenting it. Reading the available
studying in the production and inventory
APICS periodical material, including APICS
management field, developing and conducting
magazine, the Production and Inventory
educational courses and workshops, and
Management Journal, and the APICS
preparing for the certification examinations.
Operations Management Now e-newsletter
The objective of this manual is to outline the
will help you maintain an awareness of
APICS CPIM body of knowledge, which the
changes in the state of this discipline.
APICS Certification Committee has organized

into five modules:
About the APICS CPIM

 Basics of Supply Chain Management Examinations
 Master Planning of Resources

 Detailed Scheduling and Planning Candidates answer a predetermined number
 Execution and Control of Operations of questions to assess their knowledge in key
 Strategic Management of Resources areas. Each of the APICS CPIM exams (except
Basics of Supply Chain Management) consists
In this manual, each exam module begins with of 75 multiple-choice questions. The Basics
a statement of the scope of the subject exam consists of 105 multiple-choice
matter, followed by a descriptive outline of the questions. There is a three-hour time limit for
content as well as a bibliography of the each APICS CPIM exam. For more information
references. Key terminology for the particular about testing and registration policies and
exam modules is provided on pages x-xxx. procedures you can download the bulletins
Each exam module concludes with sample from the APICS website at apics.org/cpim, or
questions typical of those that appear on the call APICS Customer Service at 1-800-444-
examinations. The correct answers for the 2742 (United States and Canada) or +1-773-
sample questions, with brief explanations of 867-1777.
why they are correct, appear at the end the
manual. Students who successfully complete CPIM
examinations may be eligible to receive hours
The recommended procedure for mastering of college credit recommendations from the
the subject matter is to review the content New York State Regents Research Fund,
outline, which defines the material, and then National College Credit Recommendation
to study each topic, using the references. At Service, based on an academic evaluation of
the end of each major section is a list of the student learning outcomes. The semester
references that apply to the topics in that hours of undergraduate credit per exam are
section. The first number indicates the as follows:
sequence number for the reference in the  BSCM: 3 semester hours
Bibliography section, and the numbers in
 MPR: 2 semester hours
parentheses indicate the chapter(s) within
 DSP: 2 semester hours
that reference. These outlines form the
content and structure for the certification  ECO: 2 semester hours
examinations. Candidates should understand  SMR: 3 semester hours
the definitions of the key terms in the content

outline, as well as the outlined techniques—
Detailed information about the outcomes and
why and how to apply them and which ones to
credit recommendations is available at
select for different situations.
www.nationalccrs.org. Transcripts are

New developments in the state of the industry available through APICS.
may be described in current literature.
iv ©APICS
Question Format statements, are always followed by four-
answer choices labeled A, B, C, and D. When
The questions on the CPIM examination are
answering multiple-choice questions of this
intended to test a candidate’s understanding
type, read each question and the statements
of the CPIM body of knowledge. In addition, it
carefully to determine whether each
is helpful to understand the various formats of
statement (I through IV) is true or false.
questions on the examination. The following

seven examples illustrate the types of
Next, look at the four choices. While this form
multiple-choice questions that may be found
of question is increasingly less common, the
on the examination.
correct response requires determining if one

or a combination of choices best answers the
For Example 1, choose the response that best
question. In Example 4, you should choose
completes the statement.
option A if you believe statements I and III are

true. You should choose option B if you
Example 1: The key to a successful
believe statements I and IV are true. You
production plan is:
should choose option C if you believe

(A) capacity requirements planning. statements II and III are true. Finally, you
(B) material requirements planning. should choose option D if you believe
(C) dynamic priority planning. statements II and IV are true.
(D) adequate production capacity.
(The correct answer is D.) Example 4: If a company changes from
make-to-stock to assemble-to-order, the
For Example 2, choose the response that best effects on inventory levels are which two
answers the question. of the following?

Example 2: Which of the following I. Lower finished-goods inventory
approaches enables MRP techniques to II. Higher finished-goods inventory
be used for planning and controlling III. Lower work in process
independent demand items? IV. Higher work in process

(A) pegged orders (A) I and III
(B) two-bin system (B) I and IV
(C) time-phased order point (C) II and III
(D) reorder point (D) II and IV
(The correct answer is C.) (The correct answer is B.)

For Example 3, choose the one response that Example 5 is similar to Example 4, but the number
does NOT correctly complete the statement. of possible combinations is greater. The best
strategy for answering these questions is to
Example 3: Group technology identifies consider each statement, decide whether it is
the similarities among all of the true, and then search for the correct combination.
following EXCEPT: If the combination you seek is not given,
reconsider each statement carefully.
(A) costs
(B) parts Example 5: Management policies and
(C) shapes decisions about which of the following
(D) processes have a direct impact on investment?
(The correct answer is A.)
I. Customer service levels
For Example 4, another type of multiple-choice II. Intra-company transportation modes
question, there are two or more statements, III. Placement of distribution centers
or possibilities. The question, and the IV. Types of production processes
CPIM Exam Content Manual v
(A) I and II only Read each question carefully and thoroughly. If
(B) III and IV only a question includes stimulus material, such as a
(C) I, II, and IV only table, graph, or situation, be sure to study it
(D) I, II, III, and IV before you answer the question. Take care to
(The correct answer is D.) avoid assuming information not given, as well as
assuming you know what is being asked without
Examples 6 and 7 ask for a judgment or reading the question completely, or second-
evaluation of the MOST or LEAST appropriate guessing the question. Every effort has been
choice. The judgment is not one person’s made to avoid misleading wording and to
opinion, but is the accepted choice according provide sufficient information for each question.
to the APICS body of knowledge. Example 6
asks for the MOST appropriate choice. Example Choose the best answer from the choices
7 calls for the LEAST appropriate choice. given. Do not look for hidden tricks or
exceptions to the norm. For each question,
Example 6: The MOST significant one and only one of the four choices
advantage of aggregating demand data represents the correct answer.
before they are stored is that:
Once you begin the test, approach the questions
(A) information about demand is lost. in order, but do not waste time on those that are
(B) there is risk of input error in the unfamiliar or seem difficult to you. Go on to the
aggregation process. other questions and return to the difficult ones
(C) data will usually be inconsistent with later if you have time. If you have some
financial information. knowledge about a particular question, you may
(D) the processing time required to be able to eliminate one or more choices as
aggregate is extensive. incorrect. Your score on the test will be based
(The correct answer is A.) on the number of questions you answer
correctly, with no penalty for incorrect answers;
Example 7: Which of the following lot- therefore, it is to your advantage to guess rather
sizing calculations would be LEAST than not answer a question. Avoid changing an
sensitive to changes in unit costs? answer unless you are absolutely certain that
you marked the wrong answer.
(A) least total cost

(B) period order quantity
Interpreting Test Scores
(C) part period balancing
Scoring is based on your correct responses.
(D) lot-for-lot
There is no penalty for incorrect answers. The
(The correct answer is D.)
omission of an answer will be counted the

same as an incorrect answer.
Taking the Test

The test is designed to evaluate a candidate’s The CPIM scaled score range is 265–330:
knowledge of the subject matter. Therefore, the
key to success is a thorough understanding of 265–299: Fail
the subject matter. All questions are based on
the current CPIM body of knowledge as defined 300–330: Pass
in the exam content manual.
320 and greater: Fellow level
When you start your exam, read all the
directions carefully. Be sure you understand For each examination, you receive a score for
the directions before you begin to answer any the total test. All candidates will also receive
questions. diagnostic information on their performance.

vi ©APICS
Studying for the APICS CPIM A candidate may discover that the material
covered in one reference duplicates material
Exam
covered in another reference. Both sources
are included as references to provide
APICS offers a number of resources to help candidates some discretion in selecting test
individuals prepare for the APICS CPIM preparation materials that they find accessible
examinations. and understandable. For instance, a
candidate who uses a specific reference in
preparing for a certification exam that he or
APICS CPIM References she passed may feel comfortable using that
same reference to prepare for other
Bibliography. The APICS CPIM examination
certification exams. In deciding if a single
subcommittees have identified a number of
reference is sufficient, candidates should
references for each APICS CPIM module.
assess their own levels of knowledge against
These are listed in the bibliography section of
both the descriptive examination
each module. All references contain excellent
specifications and the detailed topic list
material that will assist in test preparation. For
contained in the respective module’s content
additional information on the APICS CPIM
outline. If there are any areas of weakness,
references, visit the APICS website at
the candidate should consult another
apics.org/cpim, or call APICS Customer
reference as part of the test preparation
Service at1-800-444-2742 (United States and
process.
Canada) or [phone].

CPIM Exam Content Manual vii