Rough-cut capacity planning (RCCP) is a type of capacity planning method that uses the master production schedule (MPS) as its primary input. RCCP is a technique for checking the feasibility of the MPS by comparing the available capacity of critical resources (such as machines, labor, or materials) with the capacity required by the MPS. RCCP helps to identify and resolve any potential capacity problems or bottlenecks at an aggregate level, before committing to the MPS. RCCP can also be used to evaluate alternative MPS scenarios and to support the sales and operations planning (S&OP) process12. References: 1 Rough Cut Capacity Planning (RCCP) - Definition, Example, and … 3 2 CPIM Exam References - Association for Supply Chain Management

Substituting capital equipment in place of direct labor can be economically justified for scenario A, where volumes are forecasted to increase. This is because capital equipment can provide higher productivity, efficiency, and quality than direct labor, especially for large-scale and standardized production. Capital equipment can also reduce labor costs, such as wages, benefits, and training, and avoid labor shortages or turnover. However, capital equipment also involves high initial investment, maintenance, and depreciation costs, and may require more skilled workers to operate and monitor. Therefore, the substitution of capital equipment for direct labor should be based on a careful analysis of the trade-offs between the costs and benefits of both alternatives.

Option B is not correct, because material prices are forecasted to increase. This scenario does not directly affect the decision to substitute capital equipment for direct labor, as both alternatives use the same materials. However, increasing material prices may reduce the profitability of the production, and may require the company to find ways to reduce material usage, such as improving material yield, reducing scrap and rework, or sourcing from cheaper suppliers.

Option C is not correct, because implementing a pull system in production. This scenario does not favor the substitution of capital equipment for direct labor, as a pull system is based on the principle of producing only what is needed by the customer, when it is needed, and in the quantity needed. A pull system requires flexibility, responsiveness, and adaptability to the changing customer demand, which may be better achieved by direct labor than capital equipment. A pull system also aims to minimize inventory, waste, and overproduction, which may reduce the need for capital equipment.

Option D is not correct, because functional layouts are being utilized. This scenario does not support the substitution of capital equipment for direct labor, as functional layouts are based on grouping similar or related processes or machines together, regardless of the product flow. Functional layouts may result in long and complex material flows, high transportation and handling costs, high work-in-process inventory, and low visibility and coordination of the production. Functional layouts may also require more direct labor to move and monitor the materials and machines. Capital equipment may be more suitable for product layouts, where the processes or machines are arranged according to the sequence of operations for a specific product or family of products.

References:

• Production and Inventory Management
• Capital Equipment and Labor
• Facility Layout and Design

Point-of-use storage is a stock location system that places inventory close to where it is needed or consumed in the production process. This reduces waste, handling, and transportation costs, and improves material flow and visibility. Point-of-use storage is a key element of a lean environment, where inventory is minimized and replenished frequently based on demand signals. References: EXAM CONTENT MANUAL PREVIEW, page 15, section 7.1.2. Manufacturing Planning and Control for Supply Chain Management: The CPIM Reference, Second Edition, page 462, section 13.3.

Reducing the inventory value by 10% would contribute most to shortening the cash-to-cash cycle time. The cash-to-cash cycle time is calculated as the days of inventory outstanding plus days of sales outstanding minus days of payables outstanding. By reducing the inventory value, the company can decrease the days of inventory outstanding, leading to a shorter cash-to-cash cycle time. This aligns with CPIM’s focus on efficient inventory management to optimize the supply chain. References: The concepts are covered in detail in Module 4: Inventory Management

One advantage of adopting a supply network perspective is that it enhances understanding of competitive and cooperative forces. A supply network perspective is a holistic view of the supply chain that considers the interdependencies and interactions among the various entities involved in the flow of materials, information, and money. A supply network perspective helps to identify the sources of value creation and capture, the opportunities and threats in the market, and the potential synergies and conflicts among the supply chain partners. A supply network perspective also helps to design and implement effective strategies and tactics to achieve competitive advantage and customer satisfaction. The other statements are not advantages of adopting a supply network perspective. Protecting global markets, defining market relationships and partnerships, and encouraging rivals to collaborate are possible outcomes or objectives of adopting a supply network perspective, but they are not the benefits of the perspective itself. References: Supply Network Perspective | APICS Dictionary Term of the Day, APICS CPIM 8 Planning and Inventory Management | ASCM

Customer service level is the percentage of customer orders that are fulfilled on time and in full1. A company that prioritizes customers A, B, and C, filling orders in that sequence, will have different impacts on the service levels for customers B and C, depending on the availability of stock and theorder quantities. Based on the table in the exhibit, customer B will have a higher service level than customer C, because customer B will receive all the ordered units for item 468 and item 617, while customer C will only receive partial units for item 468 and none for item 617. Customer C will also receive none of the ordered units for item 643, while customer B will receive some of them. Therefore, customer B will have a higher percentage of orders fulfilled on time and in full than customer C. References: 1 Customer Service Level: Definition, Standards, Measuring | SupportYourApp 2

Fishbone diagrams would help a service organization determine the source of a quality-of-service issue. A fishbone diagram, also known as a cause-and-effect diagram or an Ishikawa diagram, is a tool for identifying and analyzing the root causes of a problem or an effect. It uses a fish-shaped diagram to display the potential causes of a problem in different categories, such as people, processes, equipment, environment, etc. A fishbone diagram can help a service organization to determine the source of a quality-of-service issue by allowing the organization to brainstorm and organize the possible factors that may affect the quality of the service delivered to the customers, such as staff training, customer feedback, service standards, equipment maintenance, etc. A fishbone diagram can also help the organization to prioritize and test the most likely causes, and to develop and implement solutions to improve the quality of service12. References: 1 What is a Fishbone Diagram? Ishikawa Cause & Effect Diagram | ASQ 3 2 CPIM Exam References - Association for Supply Chain Management 1