APICS CPIM-BSP Exam Dumps & Practice Test Questions

Question 1:

In an income statement, which category is most directly associated with the cost of goods sold (COGS)?

A. Sales revenue
B. Inventory valuation
C. Promotional and marketing costs
D. Production-related expenses

Correct Answer: D

Explanation:

The Cost of Goods Sold (COGS) represents the direct costs involved in creating the products that a company sells during a specific period. This includes materials, direct labor, and manufacturing overhead directly tied to the production process. As such, COGS is most closely associated with manufacturing or production-related expenses, making Option D the most accurate choice.

To elaborate, when a business manufactures a product, it incurs various costs to bring that product to a saleable condition. These costs encompass the raw materials used, the wages of employees working directly on the product, and factory utilities and equipment depreciation. Once the product is completed and sold, these expenses are aggregated and reported under COGS on the income statement.

Let’s now contrast this with the incorrect options:

• Option A (Sales revenue): This reflects the income a company earns from selling its goods or services. While COGS and sales revenue are both used to calculate gross profit (i.e., sales revenue minus COGS), they serve different purposes. Sales revenue indicates income generated, whereas COGS reflects what it cost to produce that income.

• Option B (Inventory valuation): Though inventory data is part of the COGS formula—which includes beginning inventory, purchases, and ending inventory—inventory itself is a balance sheet item. COGS is derived from how much of the inventory has been used up or sold, but it is not directly equivalent to inventory valuation.

• Option C (Marketing costs): These are part of operating expenses, which include selling, general, and administrative (SG&A) expenses. Marketing and advertising are indirect expenses aimed at generating sales but do not factor into the actual creation of the product and are therefore excluded from COGS.

In summary, COGS is directly linked to the cost of production, not sales figures, marketing efforts, or inventory valuation as standalone components. These production expenses are critical for calculating gross margin and analyzing profitability. Recognizing this connection is essential in financial analysis and managerial decision-making, which is why Option D—production-related expenses—is the correct answer.

Question 2:

Which method is specifically designed to uncover the root cause of a problem rather than just its visible symptoms?

A. Statistical Process Control (SPC)
B. Five Whys Technique
C. Scatter Plot Diagram
D. Pareto Analysis

Correct Answer: B

Explanation:

The Five Whys Technique is a simple yet powerful tool used for root cause analysis. It helps uncover the fundamental reason behind a problem by repeatedly asking "Why?"—usually five times—until the underlying cause is revealed. This technique is particularly effective in environments that aim for continuous improvement, such as Lean manufacturing, Six Sigma, and healthcare quality initiatives.

For instance, imagine a situation where a machine stops unexpectedly. The first “why” might reveal that a component failed. The second “why” could uncover that the component was not maintained. The third “why” might show that there was no maintenance schedule in place. Continuing this line of questioning exposes the deeper, systemic cause rather than settling for surface-level symptoms.

Let’s differentiate this from the other options:

• Option A (Statistical Process Control): SPC uses statistical charts to monitor and control a process. While it can detect anomalies or trends, it doesn’t explain why those issues occur. SPC is diagnostic, not investigative.

• Option C (Scatter Diagram): This visual tool helps determine if there is a correlation between two variables. It can suggest a relationship but does not pinpoint causation or the root cause of a problem.

• Option D (Pareto Chart): Based on the 80/20 rule, a Pareto chart prioritizes issues by showing which problems occur most frequently or have the greatest impact. While it highlights what should be addressed first, it does not explain why those issues are occurring.

The strength of the Five Whys method lies in its ability to drive conversations deeper than surface-level problems. It requires no complex tools or statistical knowledge and can be applied quickly in team settings or formal investigations. It fosters critical thinking and helps organizations implement changes that solve problems permanently rather than temporarily masking symptoms.

In conclusion, when the goal is to identify the root cause of a failure or recurring issue, the Five Whys technique is the most effective and direct method, making Option B the correct answer.

Question 3:

In which plant layout does a single input evolve into several distinct final products during later production stages, representing a divergent flow pattern?

A. A-Plant
B. I-Plant
C. T-Plant
D. V-Plant

Correct Answer: D

Explanation:

The V-Plant configuration is the most accurate model for a production setup where a single initial input branches out into multiple unique outputs. Named for its resemblance to the letter "V", this plant type represents a divergent production flow. The process begins with a common base—such as a raw material or a generic intermediate product—which is then routed through different production paths to become various distinct products.

This model is commonly seen in industries where one material can serve as the foundation for many different end uses. For instance, in dairy processing, milk may be transformed into cheese, yogurt, cream, or butter, depending on the processing method applied. Similarly, in metal manufacturing, raw ingots may be cast into rods, sheets, or wires, each requiring slightly different treatments or machinery but originating from the same input.

What sets the V-Plant apart from other structures is its emphasis on variety derived from a single source. This approach contrasts with:

• A-Plant (Option A): Represents a converging system, where various parts or subassemblies are brought together to form one final product—typical in automobile or aircraft assembly.

• I-Plant (Option B): Illustrates a linear, one-to-one sequence, where a product moves through steps in a straight line, such as in paper production or refining.

• T-Plant (Option C): Features a hybrid flow—starting with a common base and then diverging into customized variations, but it also incorporates convergence by adding different modules or components later on (as seen in computer or mobile device production).

The V-Plant, on the other hand, is strictly divergent. It is efficient for mass customization and allows for maximum flexibility downstream in the process, making it highly suitable in industries that require a range of end-products from one standardized start. Since the initial product remains the same for all final outputs, it also supports cost-saving strategies like bulk procurement and uniform handling during early stages.

Therefore, the plant structure that transforms a single item into multiple distinct products as it moves forward in the production cycle—perfectly matching the divergent scenario described—is the V-Plant.

Question 4:

Which production method is characterized by producing a limited variety of standard products, requiring minimal direct labor, and depending heavily on technical expertise during the manufacturing process?

A. Jobbing
B. Intermittent
C. Flow
D. Project

Correct Answer: C

Explanation:

The correct answer is Flow manufacturing, also known as continuous or mass production. This manufacturing approach is designed to efficiently produce a limited set of standardized products in large volumes, using highly automated systems that reduce the need for hands-on labor while increasing consistency and productivity.

In a flow system, items move sequentially through an optimized set of workstations or machinery. Since products are typically uniform and demand is high, the entire process can be precisely engineered, leaving little room for variation. The reduced complexity and high repetition allow the manufacturer to leverage automation and robotics, resulting in very low direct labor costs per unit.

The dependency on automation and mechanical systems means that technical support is essential. Unlike systems that rely heavily on manual labor, flow manufacturing depends on skilled technicians and engineers who maintain machinery, troubleshoot production issues, and optimize performance. Their expertise ensures that the system operates continuously with minimal downtime, which is critical to keeping costs low and productivity high.

In contrast:

• Jobbing (Option A) involves producing customized, low-volume items, usually requiring significant skilled labor and higher per-unit costs. Each job may differ, making automation difficult.
  
  

• Intermittent (Option B) refers to batch production, where equipment and workers shift between tasks and product types. While more flexible than flow, it lacks the same efficiency and depends more on manual setup and labor.
  
  

• Project (Option D) manufacturing is for unique, large-scale builds like ships, buildings, or aircraft. These are highly customized, non-repetitive, and require intense manual effort and long timelines.

Flow manufacturing is the only method among these options that offers the ideal balance of low labor intensity, standardized output, and high technical involvement. Industries like automotive manufacturing, beverage bottling, and electronics assembly rely heavily on this model to maximize output while keeping unit costs down.

Therefore, the most appropriate answer that matches all criteria in the question is Flow manufacturing.

Question 5:

Which production strategy is characterized by creating completely customized products that require original engineering and design efforts for each order?

A. Make-to-order
B. Assemble-to-order
C. Make-to-stock
D. Engineer-to-order

Correct Answer: D

Explanation:

The Engineer-to-Order (ETO) production strategy is used when each customer order demands a unique product design, custom specifications, and tailored engineering before manufacturing can begin. In ETO environments, no product exists until an order is placed. Unlike pre-designed or partially configured products, ETO items are built from scratch based on client-provided requirements, making this approach ideal for highly specialized or complex projects.

Examples of ETO applications include industries like aerospace, shipbuilding, industrial machinery, and customized infrastructure, where no two products are exactly the same. Because the process begins with design and engineering before entering production, it often includes extensive collaboration between the engineering team and the client. Steps include conceptualization, prototyping, CAD modeling, and specification approval, followed by manufacturing.

ETO projects generally involve longer lead times, higher costs, and lower production volume, but they deliver maximum customization and client-specific value. The strategy supports intricate and mission-critical use cases that cannot be met through standard configurations.

Now, let's differentiate ETO from the other strategies:

• Option A: Make-to-Order (MTO) involves waiting to start production until an order is placed, but unlike ETO, the product design already exists. Only minor customizations (like color or size) are offered. This model is common in furniture and premium electronics.

• Option B: Assemble-to-Order (ATO) relies on pre-manufactured components that are assembled into a final product after receiving an order. Customers can choose from configurable options (like computer builds), but the components themselves are not custom-designed.

• Option C: Make-to-Stock (MTS) focuses on mass-producing standard products in advance based on forecasted demand. These items are stored in inventory and sold off-the-shelf, with little to no customization—think of items like bottled drinks or packaged clothing.

In summary, Engineer-to-Order is the only production model among the choices that begins with unique engineering work based entirely on customer requirements. It offers unmatched personalization but demands significant time, expertise, and resource allocation. For businesses producing custom, non-repetitive products, ETO is the optimal approach—making Option D the correct answer.

Question 6:

Which layout approach is most effective in lean manufacturing for reducing waste and enhancing process flow?

A. Islands
B. Connected islands
C. Functional layout
D. Cells

Correct Answer: D

Explanation:

In the context of lean production, which aims to eliminate waste and streamline efficiency, the cellular layout (also known as cells) is widely regarded as the most effective type of production layout. This strategy organizes machinery, tools, and workstations into dedicated clusters, or "cells," that handle all tasks related to producing a specific product or product family.

A cellular layout promotes smooth material flow and reduces waste associated with transportation, motion, waiting time, and excess inventory. Each cell operates semi-independently, with equipment arranged in a logical, often U-shaped configuration that minimizes movement and handling. This setup encourages one-piece flow or small-batch processing, which aligns with the lean principles of reducing cycle time, improving quality, and enhancing responsiveness.

Key benefits of using cells in lean environments include:

• Faster detection and resolution of production issues

• Reduced material handling and transport time

• Improved team communication and cross-training

• Enhanced flexibility to scale or modify processes

• Lower work-in-process (WIP) inventory

Now, consider why the other options are less suitable:

• Option A: Islands consist of isolated workstations or departments that operate independently. This leads to inefficient communication, increased material movement, and longer lead times—contrary to lean principles.

• Option B: Connected Islands improve slightly on isolated islands by introducing some integration, but still lack the tight, synchronized flow that cellular layouts provide. These often rely on manual handoffs or conveyors between disconnected steps.

• Option C: Functional Layout groups equipment by function (e.g., all lathes in one area, all welders in another). While helpful in job-shop environments, this layout leads to long travel distances, complex scheduling, and high inventory levels, making it unsuitable for lean operations.

In contrast, cells are purpose-built to streamline workflow, eliminate bottlenecks, and enable just-in-time (JIT) production. They support lean tools such as visual management, standardized work, and kaizen (continuous improvement).

In conclusion, the cellular layout is central to successful lean implementation, offering clear advantages in flexibility, quality, and efficiency. It is the only option among those listed that fully aligns with lean goals, making Option D the correct answer.

Question 7:

In the context of operations and Lean manufacturing, what does the Japanese term "Gemba" most accurately refer to?

A. Shop floor
B. Shop order
C. Shop packet
D. Shop traveler

Correct Answer: A

Explanation:

The Japanese word “Gemba” (sometimes written as Genba) translates to “the actual place” or “the real place.” In operational and manufacturing contexts—especially within Lean manufacturing, Six Sigma, and Kaizen methodologies—Gemba refers specifically to the shop floor, where real work happens and value is created for customers.

The concept of Gemba is a foundational principle in Lean thinking. It promotes the idea that management and decision-makers should regularly go to the actual site of activity—the shop floor, factory, or service area—instead of relying solely on reports, charts, or second-hand accounts. This practice is often referred to as the “Gemba Walk.” During such walks, managers observe processes directly, interact with workers, and identify inefficiencies or improvement opportunities. The goal is to gain firsthand insight into how operations function and to encourage continuous improvement by addressing real-world problems where they actually occur.

The importance of Gemba lies in its emphasis on direct observation and engagement. Managers who spend time on the shop floor develop a more realistic understanding of workflows, challenges, and employee experiences. This method helps uncover hidden inefficiencies, safety concerns, or communication gaps that would otherwise go unnoticed.

Let’s evaluate the answer choices:

• Option A: Shop floor – This is the correct answer. The shop floor is the physical location where products are assembled, services are delivered, and operational activities are executed. It is the true “Gemba” because it is the source of value creation.

• Option B: Shop order – A shop order refers to the documentation that authorizes or outlines a production job. While important, it is not a physical location and doesn’t represent where value is directly created.

• Option C: Shop packet – This term usually refers to a collection of documents (like routing instructions, quality checklists, or materials lists) that accompany a work order. Again, it's documentation, not a location.

• Option D: Shop traveler – Similar to a shop packet, a shop traveler is paperwork that follows a job through each production stage, but it is not the actual place where work occurs.

In conclusion, Gemba is about going to the source of value—the shop floor—to understand processes and drive improvements, making A the correct choice.

Question 8:

In an Assemble-to-Order (ATO) manufacturing system, which type of components are typically planned and tracked in the Master Production Schedule (MPS)?

A. Standard items
B. Finished items
C. Raw materials
D. Subassemblies

Correct Answer: D

Explanation:

In an Assemble-to-Order (ATO) manufacturing strategy, companies prepare standardized parts and modules in advance and then wait until a customer order is received before assembling the final product. This strategy strikes a balance between customization and responsiveness. It allows manufacturers to offer personalized products without the long delays of make-to-order systems or the excess inventory risks of make-to-stock models.

The Master Production Schedule (MPS) is a key planning document in manufacturing that dictates what needs to be produced and when. In an ATO setup, the MPS does not focus on finished goods because they are not built until an order is confirmed. Instead, the MPS prioritizes subassemblies—intermediate components that are pre-manufactured and stored in anticipation of various product configurations.

Subassemblies include items like circuit boards, chassis components, or modules that can be combined in different ways to form a customized final product. By pre-producing these parts and maintaining adequate inventory, the manufacturer can quickly respond to incoming orders with minimal delay, improving lead times and customer satisfaction.

Now let’s examine the other options:

• Option A: Standard items – While subassemblies may be considered standard components, the term "standard items" is too vague. It does not clearly define the specific level of planning focus required in an ATO system.

• Option B: Finished items – In contrast to make-to-stock (MTS) environments where the MPS focuses on finished goods based on forecasts, ATO delays final assembly until a specific order is placed. Therefore, finished items are not part of the MPS in this model.

• Option C: Raw materials – These are the basic inputs like metals, plastics, or chemicals. While essential to production, raw materials are managed through the Material Requirements Planning (MRP) system, not the MPS, which focuses on scheduling and inventory of higher-level items.

• Option D: Subassemblies – This is the most appropriate answer. These are the partially completed components that can be combined quickly into finished products once customer orders arrive. By scheduling subassemblies in the MPS, manufacturers can maintain flexibility and reduce fulfillment time.

In summary, in an ATO manufacturing strategy, the Master Production Schedule is primarily concerned with the availability and planning of subassemblies, making D the correct answer.

Question 9:

In an intermittent manufacturing setup, which characteristic most accurately defines how production areas are arranged?

A. The workload in each work center remains consistent and predictable.
B. Every product follows the exact same production routing.
C. Workstations are grouped according to the type of function they perform.
D. Kanban scheduling is the most suitable method used.

Correct Answer: C

Explanation:

Intermittent manufacturing is a production strategy where goods are created in smaller, distinct batches rather than through a continuous flow. This approach is ideal for businesses that produce a broad variety of products in lower volumes, such as job shops or custom manufacturers. A key distinguishing feature of intermittent manufacturing is that work centers are organized by function rather than by product flow, which aligns with Option C.

In this functional layout (also known as a process layout), similar types of equipment or tasks are grouped together into specialized departments. For instance, all welding operations may be housed in one area, machining in another, and painting in a separate section. Products move through different departments based on their individual processing requirements, often following custom routing paths.

This setup provides flexibility in handling customized or diverse product orders but introduces challenges such as complex scheduling, varying workloads, and material handling inefficiencies. Because not all products take the same path through the facility, production planning becomes more dynamic and less predictable.

Option A is incorrect because predictable workloads are typically seen in repetitive or continuous manufacturing environments, not intermittent ones. Due to the varied routing of products and inconsistent batch sizes, the load at each work center in an intermittent system fluctuates significantly.

Option B misrepresents how intermittent systems operate. In fact, the opposite is true—product routing is often highly variable, depending on the specific design, materials, or customer requirements for each product.

Option D, while Kanban is an effective pull-based scheduling method, it is best suited for environments with steady, repetitive production, such as assembly lines. Intermittent systems often cannot support the level of consistency needed for Kanban to function optimally.

In summary, intermittent manufacturing environments are defined by functional grouping of resources, which supports product variety and customization. This structure requires more intricate planning and control but allows manufacturers to be responsive and adaptable. Therefore, the most accurate description of an intermittent manufacturing environment is that work centers are arranged by function.

Question 10:

Which Lean manufacturing concept is most directly designed to prevent defects during the production process?

A. Hansei
B. Jidoka
C. Muri
D. Heijunka

Correct Answer: B

Explanation:

Among the Lean manufacturing principles listed, Jidoka is the most effective practice for real-time prevention and control of product defects. It is a cornerstone of the Toyota Production System (TPS) and plays a vital role in building quality directly into the manufacturing process.

Jidoka can be translated as “automation with a human touch.” The concept encompasses two primary functions:

1. Immediate detection of abnormalities or defects during production.

2. Automatic or manual halting of the process the moment a problem is detected.

This approach ensures that defective products are not passed on to the next stage of production, preventing waste and reducing the cost of rework. When an error is identified, either a machine stops automatically, or an operator pulls a line-stop cord (andon). This triggers an investigation into the root cause, allowing corrective action before work resumes. This proactive model fosters continuous improvement, enhances accountability, and supports quality at the source.

Option A, Hansei, means reflection or introspection. While it promotes learning from past mistakes, it is reactive rather than proactive. It is often used in retrospective reviews, which help prevent recurrence but do not stop defects during production.

Option C, Muri, refers to overburden of people or equipment and is one of the three types of waste (Muri, Muda, Mura) in Lean. While reducing overburden can improve overall process stability, it is indirectly related to defect reduction and doesn't provide an immediate mechanism for stopping quality issues.

Option D, Heijunka, stands for production leveling. It helps reduce uneven workloads and smoothens demand variability, improving efficiency and predictability. However, Heijunka does not focus specifically on detecting or stopping defects.

In conclusion, Jidoka is the only method among the options that enables immediate detection and response to quality issues, embedding defect prevention into the process. It empowers workers and systems to act autonomously to preserve quality. For organizations aiming to minimize defects at the source, Jidoka represents a critical pillar of operational excellence.