APICS Certified in Production and Inventory Management Flashcards

Which inventory cost category includes the expense of physically counting stock on hand?

Answer: Ordering cost

Physical counting labor is part of ordering (acquisition) costs because it supports replenishment decisions.

In a pull production system, what triggers the release of a work order to a upstream workstation?

Answer: A downstream signal indicating consumption

Pull systems use downstream consumption signals (e.g., kanban cards) to authorize upstream production.

What does the term 'throughput' measure in the Theory of Constraints (TOC)?

Answer: Rate at which the system generates money through sales

In TOC, throughput is the rate at which the system generates revenue minus totally variable costs.

Which document authorizes a supplier to deliver materials within a specified time window under a long-term agreement?

Answer: Release order

A release order (or delivery schedule) calls off specific quantities against an existing blanket purchase order.

Safety stock is primarily calculated to protect against which two sources of variability?

Answer: Demand variability and lead time variability

Safety stock buffers against uncertainty in both customer demand and supplier/production lead times.

In a Lean environment, what is the purpose of a Heijunka box?

Answer: To level production volume and mix over time

A Heijunka box is a visual scheduling tool that smooths production by sequencing work orders across time slots.

Which planning horizon does the Sales and Operations Planning (S&OP) process typically cover?

Answer: Two to eighteen months

S&OP typically covers a rolling horizon of 2–18 months, balancing supply capacity with aggregate demand.