APICS CPIM Exam 1 (100% Errorless Answers) 2024.

ABC classification correct answers Process of classifying items in descending order based on annual dollar volume or some other criteria. The list is then split into 3 classes - A, B, and C. A represents 10-20% of items but 50-70% of dollar volume; B represents 20% of items and 20% of dollar volume; C represents 60-70% of items but 10-30% of dollar volume. This principle states that effort and money can be saved by applying looser controls to the low dollar volume items (C class) than the higher dollar volume items (A & B classes) and applies to inventory, purchasing, sales, etc. Advance ship notice (ASN) correct answers Electronic data interchange (EDI) notification of shipment of goods Andon correct answers Electronic board that provides visibility of floor status and gives info to help coordinate efforts linked to work centers; green light = running, red light = stop, yellow light = needs attention Anticipation inventories correct answers Any additional inventory above basic pipeline stock to cover projected trends of increased sales, planned promo programs, seasonal fluctuation, plant shutdowns, and vacations Assemble-2-order correct answers Production environment where a good or service can be assembled after receipt of a customer's order. The key components (or ingredients) used in assembly or finishing process are planned and stocked in anticipation of a customer order. Receipt of order initiates assembly of the customized product. Useful strategy when a large number of end products can be assembled from common components Available inventory correct answers On-hand inventory balance minus allocations, reservations, backorders, and quantities held for quality problems Backflush correct answers Method of inventory bookkeeping where the book inventory is automatically reduced after completion of activity on component's upper-level parent item based on what should have been used as specified on the BOM and allocation records; disadvantage is difference between book inventory and physical OH inventory Backhauling correct answers Process of transportation returning from original destination point to point of origin; can be full, partial, or empty load Backlog correct answers All customer orders received but not yet shipped (open orders or order board) Backorder correct answers Unfulfilled customer order or commitment. An immediate (or past due) demand against an item whose inventory is insufficient to satisfy the demand