CPIM-Part-2 APICS Certified in Planning and Inventory Management(Part 2) Free Practice Exam Questions (2025 Updated)

 A cradle-to-cradle sustainability model is a design approach that seeks to reuse all materials and components and eliminate waste. It is based on the concept of circular economy, which aims to keep materials in use for as long as possible and regenerate natural systems12. A cradle-to-cradle sustainability model follows the principle of a potentially infinite circular economy, where all products are designed to be either biodegradable or recyclable3.

An example of a cradle-to-cradle sustainability model would be a coffee shop that collects paper waste in its restaurants, has a selected supplier collect the paper waste to be recycled, and then purchases paper products from that supplier. This example shows how the coffee shop closes theloop of the paper material cycle, by reusing the paper waste as an input for new paper products. This way, the coffee shop reduces its environmental impact, saves resources, and supports the circular economy.

The other options are not examples of a cradle-to-cradle sustainability model, because they do not reuse all materials and components and eliminate waste. A laundry service that collects dirty baby clothes from families, cleans them in large, efficient batches, and then sorts and delivers them back to each family is an example of a service-based business model, which reduces the need for owning products and extends their lifespan, but does not necessarily reuse or recycle the materials4. A company that uses wood that has been gathered from multiple sources to construct items, such as beds and toys for babies and young children is an example of a product-based business model, which may use renewable or recycled materials, but does not guarantee that the products are biodegradable or recyclable5. A bank that offers the lowest interest rates on loans to firms that are committed to using recycled materials and implementing zero-waste initiatives in their processes is an example of a financial incentive scheme, which encourages sustainable practices, but does not directly reuse or recycle materials6.

A lean relationship is a type of supplier-customer relationship that focuses on eliminating waste, improving quality, and reducing costs throughout the supply chain. A lean relationship requires a high level of collaboration, trust, and transparency between the supplier and the customer. Communication between the counterparts at the two companies is an essential activity that will enhance a successful lean relationship. Communication can help to align the goals, expectations, and performance measures of the supplier and the customer, as well as to identify and resolve any issues or problems that may arise. Communication can also facilitate information sharing, feedback, and continuous improvement initiatives. References: CPIM Exam Content Manual Version 7.0, Domain 7: Plan and Manage Distribution, Section 7.1: Develop Distribution Plans, Subsection 7.1.3: Describe how to develop supplier-customer relationships (page 66).

Carrying cost is the cost of holding inventory over a period of time. Carrying cost includes the cost of storage, insurance, taxes, obsolescence, spoilage, and opportunity cost of capital. Carrying cost is usually expressed as a percentage of the inventory value per year. An order point is the level of inventory that triggers a replenishment order. An order point is calculated based on the demand rate, the lead time, and the safety stock. An order point is used to maintain a balance between inventory availability and inventory cost. A planner who chooses to increase the order point for a raw material is most likely to increase the carrying cost, as a higher order point means a higher average inventory level, which in turn means a higher carrying cost. Increasing the order point may reduce the risk ofstockouts and improve customer service, but it also increases the inventory investment and its associated costs.

The other options are not likely to increase as a result of increasing the order point. Ordering cost is the cost of placing and receiving an order. Ordering cost includes the cost of processing, transportation, inspection, and setup. Ordering cost is usually expressed as a fixed amount per order. Ordering cost is not affected by the order point, but by the order quantity and the number of orders. Landed cost is the total cost of delivering a product or service to the customer. Landed cost includes the cost of production, transportation, taxes, duties, and fees. Landed cost is usually expressed as a percentage of the product or service value. Landed cost is not affected by the order point, but by the sourcing, pricing, and logistics decisions. Product cost is the total cost of producing a product or service. Product cost includes the cost of materials, labor, and overhead. Product cost is usually expressed as a variable amount per unit. Product cost is not affected by the order point, but by the production methods, techniques, and efficiency. References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.1: Inventory Management Concepts, p. 30; Order Point; Carrying Cost.

Point-of-use storage is a stock location system that places inventory close to where it is needed in the production process, reducing transportation and handling costs and improving efficiency. It is often used in repetitive manufacturing, lean environment, where the demand is stable and predictable, and the inventory is replenished frequently. Fixed location and central storage are stock location systems that store inventory in a designated area, which may require more space and movement. Floating location is a stock location system that assigns inventory to any available space, which may cause confusion and inefficiency. References: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2: Inventory Management Methods, p. 32.