CPIM-Part-2 Exam Dumps : Certified in Planning and Inventory Management(Part 2)

To calculate the projected available balance in period 5, we need to use the following formula1:

Projected available balance = On-hand inventory + Scheduled receipts - Total demand

We also need to know the values of on-hand inventory, scheduled receipts, and total demand for period 5. These values can be obtained from the master production schedule, which is a table that shows the planned production and inventory levels for a product over a series of time periods2. A possible master production schedule for this question is shown below:

The on-hand inventory for period 5 is the projected available balance for period 4, which is -85 units. This means that there is a shortage of 85 units at the end of period 4. The scheduled receipts for period 5 are zero, as there are no planned order releases in period 4. The total demand for period 5 is the greater of forecast or customer orders, which is 60 units. Therefore, the projected available balance for period 5 can be calculated as:

Projected available balance = -85 + 0 - 60 = -145 units

However, this does not take into account the safety stock, which is the minimum level of inventory that must be maintained to avoid stockouts3. The safety stock for this question is given as 25 units. Therefore, we need to add the safety stock to the projected available balance to get the final answer:

Projected available balance with safety stock = -145 + 25 = -120 units

However, this is still a negative value, which means that there is still a shortage of inventory in period 5. To eliminate the shortage, we need to release an additional order of fixed order quantity, which is given as 100 units. Therefore, we need to add the fixed order quantity to the projected available balance with safety stock to get the final answer:

Projected available balance with safety stock and fixed order quantity = -120 + 100 = -20 units

This is still a negative value, which means that there is still a shortage of inventory in period 5. However, this is the lowest possible value of projected available balance that can be achieved with the given data. Therefore, we need to round up this value to zero, as we cannot have a negative inventory level. Therefore, the final answer is:

Projected available balance in period 5 = max(-20,0) = 0 units

References: 1: Projected Available Balance Formula 2 2: Master Production Schedule Definition 1 3: Safety Stock Definition 4

 Failure Mode and Effects Analysis (FMEA) is a systematic, proactive method for identifying and evaluating the potential causes and impacts of failures in a process, product, or service1. It aims to anticipate and prevent failures by assessing the relative effect and risk of different failure modes1.

The use of FMEA would be most appropriate prior to a new product introduction (NPI). During the NPI phase, FMEA can be used to identify potential failure modes in the design of the product and assess their potential effects on the product’s performance and reliability. This allows for proactive measures to be taken to mitigate or eliminate these risks before the product is launched. FMEA is particularly useful in the early stages of design, as it helps in making informed decisions that can improve the quality and safety of the product1.

In contrast, using FMEA after a one-time quality incident investigation (A) or during evaluation of a new market opportunity © may not be as effective, as these situations do not involve the design or development of a product or process. While FMEA can be used during the define phase of a Six Sigma project (B), its most impactful application is during the design phase of a new product, where it can significantly influence the final outcome.

 A focused differentiation strategy is a type of focus strategy that targets a narrow buyer segment and pursues a unique competitive advantage. A focus strategy is a business-level strategy that involves concentrating on a specific market niche or segment and tailoring the products or services to the needs and preferences of that niche1. A differentiation strategy is a business-level strategy that involves creating a product or service that is perceived as unique, distinctive, or superior by the customers, and charging a premium price for it2. A focused differentiation strategy combines these two approaches by offering a differentiated product or service to a narrow market segment that has unique demands or characteristics. This strategy allows the firm to create value for its customers and charge higher prices than its competitors, while avoiding direct competition with firms that target a broader market or offer lower-cost products or services3.

An example of a focused differentiation strategy is Lululemon, a Canadian company that sells high-end yoga and athletic apparel. Lululemon targets a niche market of health-conscious, affluent, and fashion-oriented women who are willing to pay premium prices for its products. Lululemon differentiates itself from other sportswear brands by offering high-quality, stylish, and innovative products that are designed to enhance the performance and comfort of its customers. Lululemonalso fosters a strong brand identity and community among its customers by providing yoga classes, fitness events, online platforms, and social media engagement4.

References:

• Focus Strategy - Definition, Types and Examples | Marketing Tutor
• Differentiation Strategy - Definition & Examples | Marketing Tutor
• Focused Differentiation Strategy: Definition & Examples - Video & Lesson Transcript | Study.com
• Lululemon’s Focused Differentiation Strategy - Business Strategy Hub