CPIM Strategic Management and Performance Metrics 1 — Questions and Answers
Question 1: In CPIM, what is the primary goal of strategic management of resources?
- To minimize direct labor costs in all production operations
- To align operations capabilities with long-term business goals and competitive priorities (Correct answer)
- To maximize machine utilization across all work centers
- To reduce the number of suppliers in the supply base
Correct answer: To align operations capabilities with long-term business goals and competitive priorities
Strategic management of resources focuses on developing operations capabilities that support the company's long-term competitive strategy.
Question 2: Which competitive priority is BEST aligned with a make-to-stock production strategy?
- Customization flexibility
- High product variety
- Low cost with high volume standardized products (Correct answer)
- Very short customer response time for unique items
Correct answer: Low cost with high volume standardized products
Make-to-stock is suited for high-volume, standardized products where cost efficiency and immediate availability are the primary competitive advantages.
Question 3: What is 'order winners' vs. 'order qualifiers' in competitive strategy?
- Order winners are minimum standards to compete; order qualifiers are the criteria that win business
- Order qualifiers are the criteria that win business; order winners are minimum standards to compete (Correct answer)
- Both terms refer to the same concept in different industries
- Order winners apply to new customers while order qualifiers apply to repeat customers
Correct answer: Order qualifiers are the criteria that win business; order winners are minimum standards to compete
Order qualifiers are minimum performance thresholds a company must meet to be considered, while order winners are the criteria that actually differentiate and win the business.
Question 4: Which of the following is an example of a 'core competency' in operations strategy?
- The company's current debt-to-equity ratio
- A unique combination of skills, knowledge, and processes that competitors cannot easily replicate (Correct answer)
- The total number of SKUs in the product catalog
- The physical location of the main distribution center
Correct answer: A unique combination of skills, knowledge, and processes that competitors cannot easily replicate
A core competency is a distinctive organizational capability — rooted in skills and processes — that provides competitive advantage and is difficult for rivals to imitate.
Question 5: In CPIM, what does 'make vs. buy' analysis primarily evaluate?
- Whether to manufacture a component internally or outsource it to a supplier (Correct answer)
- Whether to build new warehouse capacity or rent third-party space
- Whether to invest in automation vs. manual labor
- Whether to expand domestically or internationally
Correct answer: Whether to manufacture a component internally or outsource it to a supplier
Make vs. buy analysis weighs the costs, risks, and strategic implications of producing a component in-house versus purchasing it from an external supplier.
Question 6: Which strategy involves building inventory ahead of a known demand spike, such as a seasonal peak?
- Chase strategy
- Level strategy (Correct answer)
- Reactive strategy
- Postponement strategy
Correct answer: Level strategy
A level strategy maintains a constant production rate and builds inventory in advance to absorb demand fluctuations, such as seasonal peaks.
CPIM Strategic Management and Performance Metrics 1
In CPIM, what is the primary goal of strategic management of resources?