CPIM Part 1, Formulas

Question 1

Total production (In a MTO environment + level prod plan)

Answer 1

Total forecast
+
backorders
+
ending inventory
-
opening inventory

Question 2

Net requirements

Answer 2

Scheduled receipt
-
Prior projected available

Question 3

Ending projected available balance (PAB) - Not time fences

Answer 3

Beginning PAB
+
Scheduled MPS receipt
-
Demand

Question 4

New safety stock

Answer 4

Old safety stock
X
√ (New lead time / Old lead time)

Question 5

Projected available

Answer 5

Prior period projected available
+
Scheduled receipts
+
Planned order receipts
-
Gross requirements

Question 6

Net requirements with safety stock

Answer 6

Scheduled receipts
-
(Prior period available - safety stock)

Question 7

ATP for periods containing MPS

Answer 7

Sum of customer orders before next period containing MPS receipt

Question 8

First period ATP

Answer 8

Sum of customer orders before period containing first scheduled MPS receipt

Question 9

MAD

Answer 9

Sum of absolute actual - forecast
/
Number of periods

Question 10

Tracking signal

Answer 10

Algebraic sum of forecast deviations
/
MAD

Question 11

Ending projected available balance - before demand time fence

Answer 11

Prior period PAB
+
Scheduled MPS receipt
-
Customer orders

Question 12

Ending projected available balance - after demand time fence

Answer 12

Prior period PAB
+
Scheduled MPS receipt
-
Greater of customer orders or forecast

Question 13

Break even in units

Answer 13

Fixed costs
/
(price per unit - variable cost per unit)

Question 14

Ending inventory

Answer 14

Prior period ending inventory
+
Production
-
Demand (forecast)

Question 15

Seasonal index

Answer 15

Period average demand
/
Average demand for all periods

Question 16

Rated capacity

Answer 16

Available hours
X
Efficiency
X
Utilization

Question 17

Utilization

Answer 17

Hours actually worked
/
Available time

Question 18

Efficiency

Answer 18

Standard hours produced
/
Hours actually worked

Question 19

Operation time per workorder

Answer 19

Setup time
+
Run time

Question 20

Demand during lead time

Answer 20

Units per period
X
Lead time

Question 21

Order point

Answer 21

Demand during lead time (DDLT)
+
Safety stock

Question 22

Average ordering cost per order

Answer 22

(Fixed cost / Number of orders)
+
Variable costs

Question 23

Net requirements

Answer 23

Scheduled receipts
-
Prior projected available

Question 24

Average inventory with safety stock

Answer 24

Q
/
w
+
SS

Question 25

Demonstrated capacity

Answer 25

Sum of standard hours per time bucket
/
Number of time buckets

Question 26

Critical ratio

Answer 26

(Due Date - Present Date)
/
Lead time remaining

Question 27

Planned backlog

Answer 27

Previous planned backlog
+
Planned inputs
-
Planned outputs

Question 28

Actual backlog

Answer 28

Previous actual backlog
+
Actual input
-
Actual Output

Question 29

Average inventory

Answer 29

(Inventory at period start + inventory at period end)
/
2

Question 30

Inventory turnover

Answer 30

Annual COGS
/
Average inventory in dollars

Question 31

Safety stock

Answer 31

SD or MAD in units
X
Appropriate service factor for SD or MAD

Question 32

Customer service level

Answer 32

(Orders per period - Stockout chances per period)
/
Orders per period

Question 33

Cumulative variance (outputs)

Answer 33

Previous cumulative variance
+
Actual output
-
Planned output

Question 34

Cumulative variance (Inputs)

Answer 34

Previous cumulative variance
+
Actual input
-
Planned input

Question 35

New forecast
(Exponential smoothing)

Answer 35

(alpha x latest demand)
+
((1-alpha x previous forecast))

Question 36

Forecasted demand
(deseasonalized)

Answer 36

Seasonal index
X
deseasonalized period forecast

Question 37

Deseasonalized demand

Answer 37

Period average demand
/
Seasonal index

Question 38

What is the formula for calculating the target inventory in a periodic review system?

Answer 38

T = D X (R+L) + SS

Demand per period X (review period + lead time) + safety stock

Question 39

What is the formula for calculating annual carrying costs?

Answer 39

(Q/2) x c x i

average inventory X cost per unit X carrying cost rate