CPIM Sales and Operations Planning 2 — Questions and Answers
Question 1: Which metric is MOST commonly used to measure S&OP forecast accuracy at the family level?
- Mean absolute percentage error (MAPE) (Correct answer)
- Standard deviation of demand
- Fill rate percentage
- Inventory turnover ratio
Correct answer: Mean absolute percentage error (MAPE)
MAPE is the standard S&OP forecast accuracy metric because it expresses error as a percentage, enabling comparison across product families with different volumes.
Question 2: In S&OP, a 'chase strategy' for production planning means the company:
- Adjusts workforce or capacity each period to match demand (Correct answer)
- Maintains a constant production rate and uses inventory as a buffer
- Outsources production whenever demand spikes
- Chases the lowest-cost supplier for each planning period
Correct answer: Adjusts workforce or capacity each period to match demand
A chase strategy matches production output directly to demand each period, typically by varying workforce size, overtime, or subcontracting.
Question 3: The primary purpose of the Pre-S&OP meeting is to:
- Resolve cross-functional gaps and prepare recommendations for executive review (Correct answer)
- Approve the final production plan for the upcoming period
- Update customer orders in the ERP system
- Conduct detailed scheduling for shop floor operations
Correct answer: Resolve cross-functional gaps and prepare recommendations for executive review
The Pre-S&OP meeting reconciles supply and demand imbalances at the functional level so that unresolved issues and recommended scenarios are escalated to the executive S&OP session.
Question 4: When demand exceeds available capacity in an S&OP plan, which action is NOT typically considered a supply-side response?
- Reducing the sales forecast (Correct answer)
- Authorizing overtime production
- Adding a third production shift
- Engaging a subcontractor
Correct answer: Reducing the sales forecast
Reducing the sales forecast is a demand-side lever, not a supply-side response; supply-side options include overtime, extra shifts, and subcontracting.
Question 5: A 'level production' strategy in S&OP results in:
- Inventory building during low-demand periods and drawdown during peak periods (Correct answer)
- Frequent changes to workforce size to match monthly demand
- Zero finished-goods inventory at all times
- Higher per-unit production costs during off-peak months
Correct answer: Inventory building during low-demand periods and drawdown during peak periods
Level production keeps output constant, so inventory accumulates when demand is low and is consumed when demand peaks.
Question 6: Which of the following best describes the role of the demand review step in the S&OP process?
- Develop and validate an unconstrained demand plan before supply constraints are applied (Correct answer)
- Confirm available inventory positions in the warehouse
- Set final prices for the upcoming fiscal quarter
- Review open purchase orders with key suppliers
Correct answer: Develop and validate an unconstrained demand plan before supply constraints are applied
The demand review produces an unconstrained demand plan—reflecting market opportunity—which is then tested against supply capability in subsequent S&OP steps.
Question 7: In the context of S&OP, 'product families' are typically defined by groupings that:
- Share similar manufacturing processes or market channels (Correct answer)
- Have the same unit cost and selling price
- Are produced by the same individual machine
- Are ordered exclusively through the same distribution center
Correct answer: Share similar manufacturing processes or market channels
S&OP product families are aggregated by common production resources or go-to-market channels so that planning is manageable and decisions are relevant across the supply chain.
CPIM Sales and Operations Planning 2
Which metric is MOST commonly used to measure S&OP forecast accuracy at the family level?