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Compared to traditional supplier relationships, a more strategic view of supplier relationships would require maintaining communication based on trust. Trust is a key factor that enables effective collaboration, information sharing, problem solving, and innovation between supply chain partners12. Trust can also reduce transaction costs, conflicts, and opportunism, and increase commitment, loyalty, and performance34. Therefore, maintaining communication based on trust is essential for developing and sustaining strategic supplier relationships that can create value and competitive advantage for both parties.

The other options are not necessarily required for a more strategic view of supplier relationships, because they are either insufficient or irrelevant. Offering the supplier more business may increase the volume or frequency of transactions, but it does not guarantee a more strategic or long-term relationship. Adopting electronic data interchange (EDI) may improve the efficiency or accuracy of information exchange, but it does not ensure a more collaborative or innovative relationship. Implementing concurrent engineering may enhance the product design or development process, but it does not address the other aspects of a strategic relationship, such as quality, delivery, or risk management.

Finite loading is a capacity planning approach that considers adjustments to plans based on planned capacity utilization. It does not allow overloading of resources and schedules operations only when there is enough capacity available. Finite loading creates a more realistic schedule for the production processes than other approaches, such as infinite loading, that ignore the capacityconstraints and assume that the due dates of orders are absolute. Finite loading is not highly dependent on advanced computer software, although it can benefit from it. It is not only managed by shop floor supervisors, but also by planners and schedulers. It can use historical information, but it is not the only approach that can do so. Therefore, the fundamental difference between finite loading and other capacity planning approaches is that it considers adjustments to plans based on planned capacity utilization. References := CPIM Part 2 Exam Content Manual, Domain 6: Plan, Manage, and Execute Detailed Schedules, Section B: Schedule Production Activities, Subsection 1: Develop a detailed production schedule (p. 28)

A part that is sold as a service part and also used as a component in another part is called a dual-sourced item. A dual-sourced item has two sources of demand: the external demand from the customers who buy the service part, and the internal demand from the parent part that uses the component. The planning for a dual-sourced item should include both sources of demand in the gross requirements, so that the net requirements can be calculated correctly. The service part demand can be included in the gross requirements by using a planning bill of material, which is a special bill of material that shows the relationship between a parent item and its service parts. A planning bill of material allows the system to explode the service part demand to the component level and generate planned orders for both the service part and the component.

The other statements about the planning for this part are false. Its low-level code is not zero, because it is not an independent item. It has a higher low-level code than its parent item, because it is a component of another item. The material requirements for the part will not be understated, if both sources of demand are included in the gross requirements. It should have some safety stock, to protect against demand and supply uncertainties. References: CPIM Part 2 Exam Content Manual, Domain 4: Plan and Manage Supply, Section 4.2: Material Requirements Planning (MRP), p. 22-23.

 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