CPIM Practice Exam

What does the cumulative variance measure in production control?

1. Difference between actual production and planned production

2. Rate of employee turnover

3. Costs associated with downtime

4. Efficiency of resource utilization

The correct answer is: Difference between actual production and planned production

The cumulative variance measures the difference between actual production and planned production over a specific timeline. This metric is essential in production control as it helps organizations assess their performance against established production goals. By tracking cumulative variance, businesses can identify trends, understand deviations from the plan, and take corrective actions if necessary. This continuous measurement assists in pinpointing issues such as inefficiencies or unexpected disruptions that may be impacting productivity. While the other concepts mentioned—employee turnover, costs associated with downtime, and efficiency of resource utilization—are important for overall business operations, they do not directly relate to how cumulative variance is quantified. Hence, the cumulative variance's primary focus on the actual vs. planned output makes it a crucial indicator in production control.