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The master production schedule (MPS) and final assembly schedule (FAS) are most closely linked in the assemble-to-order (ATO) production strategy. ATO is a production strategy that producescustomized products or services by assembling standardized components or modules according to customer specifications. The MPS is a plan that specifies the quantity and timing of finished products to be produced in a given period. The FAS is a plan that specifies the quantity and timing of final assembly operations to be performed in a given period. In the ATO strategy, the MPS and FAS are closely linked because the MPS determines the demand for the finished products, and the FAS determines the demand for the components or modules. The MPS and FAS are synchronized to ensure that the components or modules are available when needed for the final assembly, and that the finished products are delivered on time to the customers.

The MPS and FAS are not closely linked in the other production strategies. Make-to-stock (MTS) is a production strategy that produces standardized products or services in advance of customer demand, and stores them in inventory until they are sold. The MPS is based on the forecasted demand, and the FAS is not relevant for this strategy, as there is no customization involved. Make-to-order (MTO) is a production strategy that produces customized products or services from raw materials or components after receiving customer orders. The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no assembly involved. Engineer-to-order (ETO) is a production strategy that produces customized products or services that require engineering design or modification after receiving customer orders. The MPS is based on the actual customer orders, and the FAS is not relevant for this strategy, as there is no standardization involved. References: CPIM Exam Content Manual Version 7.0, Domain 4: Plan and Manage Supply, Section 4.1: Supply Planning Concepts, p. 23; Master Production Schedule; Final Assembly Schedule; Assemble to order.

 In a make-to-stock (MTS) environment, improving estimates of customer demand would improve the trade-off between the cost of inventory and the level of customer service. MTS is a production strategy that manufactures products in anticipation of customer demand, based on forecasts. The main challenge of MTS is to balance the inventory costs and the customer service levels. Inventory costs include holding costs, ordering costs, and obsolescence costs. Customer service levels measure the ability to meet customer demand without delay or stockout. A trade-off exists between these two objectives, as higher inventory levels can increase customer service levels but also increase inventory costs, and vice versa.

Improving estimates of customer demand can help reduce the trade-off between inventory costs and customer service levels, as it can lead to more accurate production planning and inventory management. By forecasting demand more accurately, a company can avoid overproduction or underproduction, which can result in excess inventory or stockouts, respectively. By producing the right amount of products at the right time, a company can lower its inventory costs and increase its customer service levels.

Eliminating raw material stockouts would not improve the trade-off between inventory costs and customer service levels in a MTS environment, as it would not affect the finished goods inventory or the customer demand. Raw material stockouts are a supply issue that can disrupt the production process and cause delays or shortages in the finished goods. However, they do not directly impact the inventory costs or the customer service levels of the finished goods, which are determined by the demand forecasts and the production plans.

Decreasing the frozen time zone would not improve the trade-off between inventory costs and customer service levels in a MTS environment, as it would increase the variability and uncertainty in the production process. The frozen time zone is the period of time in which no changes can be made to the production schedule, as it is considered fixed and final. Decreasing the frozen time zone would allow more flexibility and responsiveness to changes in demand or supply, but it would also increase the risk of errors, disruptions, or inefficiencies in the production process. This could resultin higher production costs, lower quality, or longer lead times, which could negatively affect the inventory costs and the customer service levels.

Reducing manufacturing overtime would not improve the trade-off between inventory costs and customer service levels in a MTS environment, as it would reduce the production capacity and output. Manufacturing overtime is a way of increasing the production capacity and output by extending the working hours of the production resources, such as labor or equipment. Reducing manufacturing overtime would lower the production costs, but it would also lower the production output. This could result in insufficient inventory to meet customer demand, which could lower the customer service levels. References := Make-to-Stock (MTS) Definition, Make-to-Stock (MTS) vs Make-to-Order (MTO) | TradeGecko, Value Creation: Assessing the Cost-Service Trade-off

A bill of resources is a tool that is used to evaluate the impact that a production plan has on capacity. A bill of resources is a document that lists the required resources, such as machines, labor, materials, and space, for each product or service in the production plan1. A bill of resources can help estimate the total capacity requirements for the production plan, as well as the capacity utilization and availability for each resource2. A bill of resources can also help identify potential capacity gaps, bottlenecks, or excesses, and evaluate alternative production plans or resource allocations3.

A bill of resources can be created by using the following steps4:

Step 1: Identify the products or services in the production plan and their quantities and timings.

Step 2: Identify the resources needed for each product or service and their quantities and timings. This can be done by using tools such as product routings, process maps, or work breakdown structures.

Step 3: Aggregate the resource requirements for each product or service and for the entire production plan. This can be done by using tools such as spreadsheets, tables, or charts.

Step 4: Compare the resource requirements with the resource capacities and availability. This can be done by using tools such as capacity planning matrices, load profiles, or resource histograms.

Step 5: Analyze the results and make adjustments or recommendations. This can be done by using tools such as what-if analysis, simulation, or optimization.

Therefore, a bill of resources is a tool that is used to evaluate the impact that a production plan has on capacity.

References: 1: Bill of Resources Definition 1 2: Capacity Planning Definition 2 3: Capacity Planning Tools 3 4: How to Create a Bill of Resources 4

Sales and operations planning (S&OP) is a process that aligns the sales plan, the production plan, the inventory plan, and the financial plan to achieve the business objectives. S&OP helps to balance supply and demand, optimize resources, reduce inventory costs, and improve customer service. S&OP is done on an aggregate or family level, and covers a sufficient span of time to make sure that the necessary resources will be available. S&OP also involves regular reviews and updates of the plans based on the changes in the market and the company’s performance.

Business planning is a process that defines the long-term vision, mission, goals, and strategies of the organization. Business planning provides the direction and framework for the operational plans, but does not address the specific issues of inventory management and financial performance.

Detailed material planning is a process that determines the quantity and timing of material requirements for each item or component in the production plan. Detailed material planning is based on the master schedule, which is derived from the S&OP. Detailed material planning does not address the alignment of sales and operations at an aggregate level.

Master scheduling is a process that translates the S&OP into a detailed plan for each product or service in a specific time period. Master scheduling specifies the quantityand timing of finished goods to be produced or delivered to meet the demand. Master scheduling is dependent on the S&OP, and does not address the coordination of sales and operations at an aggregate level.

References:

APICS Exam Handbook, page 12

CPIM Part 1 Study Guide, page 19

CPIM Part 2 Study Guide, page 17

Sales and Operations Planning (S&OP) 101| Smartsheet

Sales, Inventory & Operations Planning - What It Is and How to Operate

Mean time between failures (MTBF) is the predicted elapsed time between inherent failures of a mechanical or electronic system during normal system operation1. MTBF can be calculated as the arithmetic mean (average) time between failures of a system1. MTBF is a useful measure of reliability, because it indicates how long a system is likely to work before failing. The higher the MTBF, the more reliable the system2. Reliability is the probability that a system will perform its intended function without failure for a specified period of time under specified conditions3.

The other statements about MTBF are false. MTBF is not used for non-repairable products, but for repairable systems. For non-repairable products, mean time to failure (MTTF) is used instead4. MTTF is the expected time to failure for a non-repairable system1. An increase in MTBF is not proportional to an increase in quality, because quality is not only determined by reliability, but also by other factors such as performance, functionality, durability, and customer satisfaction5. MTBF is not the same as operating life or service life, because operating life or service life is the total time that a system can operate before it reaches the end of its useful life, while MTBF is the average time between failures during the operating life6.

A two-bin system is a type of inventory management technique that uses two containers or bins to store and replenish items. When the first bin is empty, the second bin is used to supply the demand while the first bin is reordered. A two-bin system is most responsive to changes in demand levels because it triggers replenishment orders based on actual consumption rather than fixed time intervals or reorder points. A two-bin system can reduce stockouts, improve service levels, and lower inventory costs. References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2: Implement Inventory Plans, Subsection 5.2.3: Describe how to implement inventory replenishment techniques (page 46).

Shop backlogs are the amount of work that has been ordered but not yet completed by a production facility1. Shop backlogs remain constant when the work input, which is the rate of incoming orders, equals the work output, which is the rate of finished products2. This means that the production facility is able to match the demand and supply of its products, and maintain a steady level of backlog. This can indicate that the production facility is operating efficiently and effectively, and has a stable market position.

The other options are not correct. Forecasts are updated on the basis of the longest lead time item means that the production facility uses the item that takes the longest time to produce as a reference for planning its future production3. This may help the production facility to avoid underestimating its capacity or overcommitting its resources, but it does not guarantee that the shop backlogs will remain constant, as it depends on the actual demand and supply of its products. Capacity is assumed to be infinite means that the production facility does not consider anylimitations or constraints on its ability to produce its products. This may help the production facility to simplify its production planning and scheduling, but it does not reflect the reality of its operations, and may lead to unrealistic expectations or poor performance. Shop orders are released at a steady rate means that the production facility releases a fixed number of orders to its shop floor at regular intervals. This may help the production facility to smooth out its production flow and reduce variability, but it does not ensure that the shop backlogs will remain constant, as it depends on the actual work input and output.

References : Backlog Definition, Implications, and Real-World Examples - Investopedia; Production Planning - an overview | ScienceDirect Topics; [Production Planning: Definition & Types | Study.com]; [Production Planning: Definition & Types | Study.com]; What is a Sprint Backlog? Create With Examples [2023] • Asana.

The bullwhip effect is a supply chain phenomenon that causes fluctuations in demand to amplify as they move upstream, from the consumer to the retailer, to the distributor and then to the producer1. The bullwhip effect can result in inefficiencies and costs such as excess inventory, lost revenues, superfluous capacity and poor customer service1.

One of the activities that would be effective to mitigate the bullwhip effect is to reduce lead times, which are the time intervals between placing an order and receiving the goods2. Reducing lead times can help to reduce the uncertainty and variability in demand, as well as improve the responsiveness and flexibility of the supply chain2. By reducing lead times, the supply chain partners can order less frequently and in smaller quantities, while still meeting customer demand. This can reduce the need for safety stock, cycle stock and pipeline stock, and thus lower the inventory carrying costs and risks2.

The other options are not effective activities to mitigate the bullwhip effect. Implementing track and trace technology, which is a method for tracking the origin, history, location and status of a product or its parts throughout the supply chain3, may help to improve the visibility and transparency of the supply chain, but it may not reduce the demand fluctuations or inventory imbalances caused by the bullwhip effect. Using a push system, which is a production system where goods are produced based on forecasted demand rather than actual customer orders4, may increase the risk of overproduction or underproduction, as well as create more inventory and waste in the supply chain. Increasing inventory, which is the stock of goods or materials held by a company to meet customer demand5, may increase the inventory carrying costs and risks, as well as tie up cash flow and working capital.

References : Lead Time Reduction: Definition & Benefits; The bullwhip effect: causes, intensity, and mitigation - Academia.edu; What is Traceability in Supply Chain Management?; Push vs Pull System: What Is The Difference?; Inventory Definition.

 Inventory turns, also known as inventory turnover or stock turnover, is a measure of how many times a company sells and replaces its inventory in a given period. It is calculated as the ratio of cost of goods sold (COGS) to average inventory1. A higher inventory turnover indicates that the company is selling its inventory quickly and efficiently, while a lower inventory turnover indicates that the company is holding too much inventory or having difficulty selling its products.

Increasing safety stock to improve customer fill rate would result in a decrease in inventory turns, as it would increase the average inventory level. Safety stock is the extra inventory that is held to prevent stockouts and meet unexpected demand2. Customer fill rate is the percentage of customer orders that are fulfilled from available inventory without delay3. Increasing safety stock can improve customer fill rate by reducing the risk of stockouts and ensuring high service levels. However, increasing safety stock also increases the inventory carrying costs and risks, such as storage, handling, obsolescence, shrinkage, and opportunity costs4. Therefore, increasing safety stock is a trade-off between customer satisfaction and inventory efficiency.

The other options are not correct. Pipeline inventory is the inventory that is in transit between locations or stages in the supply chain5. Increasing safety stock would not affect pipeline inventory, as it is determined by the lead time and demand rate. Transportation costs are the expenses incurred for moving goods from one location to another6. Increasing safety stock would not affect transportation costs, as it is determined by the distance, mode, volume, and frequency of transportation. Sales revenue is the income generated from selling goods or services to customers7. Increasing safety stock would not affect sales revenue directly, as it is determined by the price and quantity of sales. However, increasing safety stock may have an indirect positive effect on sales revenue by improving customer satisfaction and loyalty.

References : Inventory Turnover Ratio | Formula | Calculator (Updated 2021); Safety Stock: The Ultimate Guide; Fill Rate - Definition, Formula & Example; Inventory Carrying Cost: Definition & Formula; Pipeline Inventory: Definition & Example; Transportation Costs: Definition & Examples; Sales Revenue: Definition & Examples.

 A production cell is a group of machines or workstations that are arranged in a layout that facilitates the flow of materials and work-in-progress in a manufacturing system. A production cell is usually designed to produce a family of products or services that have similar characteristics or requirements. A production cell is often based on the principles of lean manufacturing and group technology, which aim to eliminate waste and improve quality. When designing a production cell, the most important consideration is the flow of materials into the cell and sequencing of operations to minimize total cycle time. The flow of materials into the cell refers to the movement and direction of the raw materials, components, or modules that enter the cell for processing. The sequencing of operations refers to the order and arrangement of the machines or workstations that perform the processing steps within the cell. Minimizing total cycle time refers to reducing the time it takes to complete a product or service from start to finish. By considering these factors, a production cell can achieve high efficiency, flexibility, and productivity.

The other options are not the most important considerations when designing a production cell. The unit per hour requirement for the production cell to meet the sales forecast is not the most important consideration, as it is a result of the demand planning and capacity planning functions, which are separate from the production cell design. The unit per hour requirement indicates how many units of a product or service the production cell needs to produce in an hour to meet the expected customer demand. The output rate for the first operation and move time after the last workstation are not the most important considerations, as they are only parts of the total cycle time calculation, which also includes the processing time and waiting time for each operation. The output rate for the first operation is the number of units that the first machine or workstation in the cell can produce in an hour. The move time after the last workstation is the time it takes to transport the finished product or service from the last machine or workstation in the cell to the next stage or destination. The take time requirement for each operator to meet the monthly production goals of the plant is not the most important consideration, as it is a measure of labor productivity, which is affected by factors such as skill, training, motivation, and supervision. The take time requirement for each operator is the amount of time that an operator needs to complete one unit of a product or service. References: CPIM Exam Content Manual Version 7.0, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section 6.2: Detailed Scheduling Methods, p. 38; Cellular manufacturing; Production Cell.