CPIM Problems

First Exam – Basics of Supply Chain Management

Problem One

Beginning Inventory = 300 units

Ending Inventory = 400 units
Sales Forecast:
Month: 1 2 3 4 5
Quantity: 300 100 400 300 500

What is the required monthly production to achieve level production?

Answer:

Total forecast = 300 + 100 + 400 + 300 + 500 = 1,300

1300 - beg bal (300) + end bal (400) = 1400
1400 / 5 months = 280 / month to achieve level production goal

Problem Two

Lead time = 5 weeks

Average demand = 200 / week
Safety stock = 300 units
Order quantity = 1500 units

What is the reorder point?

Answer:

5 weeks * 200 units / week = 1000 units + 300 (safety stock) = 1300

(note that the order quantity is irrelevant for this question)

What is the average inventory?

Answer:

1500 (order quantity) / 2 + 300 (safety stock) = 1050

1
 CPIM Problems
First Exam – Basics of Supply Chain Management

Problem Three

On hand = 400
Forecast:
week 1 2 3 4
amount: 100 200 300 200

MPS receipts: 200 150 400 300

What is the projected available balance at the end of weeks 1-4?

Answer:

week 1 2 3 4
500 450 550 650

Problem Four

# of machines = 5
# of shifts = 1
shift length = 30 hours
efficiency = 80%
utilization = 90%
Week 1 2 3 4
Actual output 130 100 140 80

What is the rated capacity?

Answer:

(30 hours * 5 machines * 1 shift) = 150 * .8 (efficiency) = 120 * .9 (utilization) = 108

hours

What is the demonstrated capacity?

Answer:

130 + 100 + 140 + 80 / 4 = 113 hours