APICS CPIM-Part-2 Exam Dumps

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.Reference: CPIM Exam Content Manual Version 7.0, Domain 5: Plan and Manage Inventory, Section 5.2: Inventory Management Methods, p. 32.

A customer value proposition (CVP) is a statement that summarizes the benefits that a product or service offers to a target customer segment1.A CVP can help a company differentiate itself from its competitors by highlighting its unique value proposition (UVP), which is the main reason why customers should choose its product or service over others2.A CVP can also help a company communicate its value to its customers, increase customer satisfaction and loyalty, and improve its market position3.

One of the strategies that can improve the effectiveness of a CVP and enhance its differentiation in the market is to adopt best practices that improve product design.Product design is the process of creating a new product or service that solves a customer problem or fulfills a customer need4.By improving product design, a company can create products or services that are more desirable, feasible, and viable for its customers5. Some of the best practices that can improve product design are:

Understanding the customer: conducting research and analysis to identify the customer segments, their jobs, pains, and gains, and their expectations and preferences. This can help create products or services that are tailored to the customer needs and wants, and deliver value that exceeds their expectations.

Using the Value Proposition Canvas: a tool that helps design, test, create, and manage products and services that customers actually want. The Value Proposition Canvas consists of two parts: the Customer Profile, which describes the customer segment in terms of their jobs, pains, and gains; and the Value Map, which describes how the product or service creates value for the customer by addressing their jobs, relieving their pains, and creating their gains. The Value Proposition Canvas can help align the product or service with the customer needs and wants, and create a fit between them.

Applying design thinking: a human-centered approach to innovation that integrates the needs of people, the possibilities of technology, and the requirements of business. Design thinking involves five phases: empathize, define, ideate, prototype, and test. Design thinking can help create products or services that are desirable for the customers, feasible for the technology, and viable for the business.

Incorporating feedback loops: collecting and analyzing data from customers and stakeholders to measure the performance and impact of the product or service. Feedback loops can help validate the assumptions and hypotheses about the customer needs and wants, test the effectiveness of the value proposition, and identify areas for improvement or innovation.

Therefore, by adopting best practices that improve product design, a company can create products or services that deliver superior value to its customers, and differentiate itself from its competitors in the market.

Finished goods inventory is a type of inventory that consists of the final products that are ready for sale to the customers. Finished goods inventory investment is the value of the finished goods inventory held by the company. Service level is a measure of customer satisfaction that indicates the percentage of customer orders that can be fulfilled from the available inventory. Service level typically will increase when finished goods inventory investment is increased, because more inventory means more ability to meet the customer demand. However, the relationship between service level and finished goods inventory investment is not linear, but rather asymptotic. This means that service level will increase at a decreasing rate as finished goods inventory investment increases. In other words, the marginal benefit of increasing finished goods inventory investment will diminish as the service level approaches 100%. This is because there is a limit to how much inventory can improve the service level, and beyond a certain point, the additional inventory will not have a significant impact on customer satisfaction.

Safety stock is a type of inventory that is held in excess of the expected demand to protect against uncertainties such as demand variability, lead time variability, or supply disruptions. Safety stock can help to reduce the risk of stockouts, which are situations where the inventory level falls below the demand level and the customer orders cannot be fulfilled. Safety stock can be determined by using different methods, such as statistical models, service level policies, or empirical rules. One of the common criteria that is used to determine safety stock in a distribution center (DC) is the probability of stocking out, which is the likelihood that the inventory level will be insufficient to meet the demand during a replenishment cycle. The probability of stocking out can be calculated by using the normal distribution, assuming that the demand and lead time are normally distributed. The probability of stocking out can also be expressed as the complementary value of the service level, which is the percentage of customer orders that can be satisfied from the available inventory. A higher probability of stocking out implies a lower service level and a lower safety stock. A lower probability of stocking out implies a higher service level and a higher safety stock.