CPIM Practice Exam

What is capacity management?

1. Measuring worker productivity.

2. Establishing and monitoring limits of production capacity.

3. Scheduling production runs based on demand.

4. Determining labor costs for manufacturing.

The correct answer is: Establishing and monitoring limits of production capacity.

Capacity management involves establishing and monitoring the limits of production capacity to ensure that an organization can meet current and future demands effectively. It focuses on understanding the resources available, including machinery, labor, and materials, and determines how to best utilize these resources to optimize production processes. The goal of capacity management is to align the production capabilities with customer demand while minimizing costs and maximizing efficiency. By actively monitoring production capacity, organizations can identify when they are approaching their limits and can make informed decisions about scaling operations, hiring additional staff, or investing in new equipment. This strategic oversight is crucial as it directly influences an organization’s ability to fulfill customer orders on time, maintain quality standards, and adjust operations based on changes in market demand. In this context, the establishment and monitoring aspect is essential, as it allows for proactive adjustments rather than reactive measures, ensuring that production levels are consistently aligned with demand.