CPIM Practice Exam

In manufacturing planning, which objectives tend to conflict?

1. Minimize production costs and variety

2. Meet customer service and lead time targets

3. Minimize costs and length of production runs

4. Meet service targets and reduce inventory

The correct answer is: Meet service targets and reduce inventory

The choice specifying the conflict between meeting service targets and reducing inventory captures a fundamental challenge in operations management. High levels of inventory can provide a buffer that helps meet customer service levels by ensuring that products are readily available when needed. However, maintaining large inventories also incurs costs, including storage, insurance, and risk of obsolescence, which creates a tension between the goal of minimizing inventory and the desire to achieve high customer service. When a company aims to reduce inventory to lower costs, it may face the risk of not being able to meet customer demands promptly, leading to potential stockouts and decreased service levels. Therefore, achieving the ideal balance between high service levels and low inventory is a common conflict in manufacturing planning. The other options present objectives that may not inherently conflict to the same extent. For example, minimizing production costs and variety can often be aligned through standardization or reduced complexity in offerings. Meeting customer service and lead time targets can be managed through strategic planning and scheduling, focusing on efficient processes. Lastly, minimizing costs and the length of production runs can be coordinated through optimizing batch processes, allowing for some flexibility in production strategies. Thus, while all these objectives require careful consideration, the conflict between meeting service targets and reducing inventory stands out as particularly challenging in manufacturing