CPIM Practice Exam

What is the demonstrated capacity of a work center that produced 320, 325, 330, and 322 standard hours over 4 weeks?

1. 320 standard hours

2. 324 standard hours

3. 330 standard hours

4. 332 standard hours

The correct answer is: 324 standard hours

To determine the demonstrated capacity of a work center based on the production over four weeks, one must calculate the average output during that period. Demonstrated capacity is often considered as the average actual output, providing a practical perspective on the work center's capabilities. In this scenario, the work center produced 320, 325, 330, and 322 standard hours over four weeks. To find the average, you sum the total production for the four weeks and then divide by the number of weeks: 1. First, add the produced standard hours: - 320 + 325 + 330 + 322 = 1297 standard hours 2. Next, divide the total by the number of weeks: - 1297 standard hours / 4 weeks = 324.25 standard hours Since demonstrated capacity is typically reported in whole hours, rounding to the nearest standard hour provides 324 standard hours. This explains why 324 standard hours is the correct answer for demonstrated capacity, reflecting the average actual output of the work center across the time period. Understanding this approach helps assess the overall effectiveness of the work center, as it takes into account fluctuations in production output and provides a more realistic reflection of the capacity available for planning and scheduling purposes