Last Attempt CPIM-8.0 Questions

A pull system initiates production in response to actual customer demand, rather than a forecast. Make-to-order (MTO) and engineer-to-order environments typically operate under pull systems.

“Pull systems authorize production based on actual consumption or customer order.”

— CPIM ECO Module; JIT and Lean Principles

Increasing finished goods inventory investment will improve service levels by reducing the probability of stockouts. However, the relationship between inventory and service level is not linear, but rather asymptotic. This means that as inventory increases, service level increases at a decreasing rate, approaching a maximum value. Therefore, option C is correct. Option A is incorrect because service level will not remain the same when inventory changes. Option B is incorrect because service level will not increase in direct proportion to inventory. Option D is incorrect because service level will not increase at an increasing rate as inventory increases. References: CPIM Part 2 Exam Content Manual, Version 8.0, Section A: Demand Management, Subsection A.3: Demand Management and Customer Service, p. 10.