CPIM Practice Exam

Which formula calculates cumulative variance for inputs?

1. Actual Input - Planned Input

2. Previous Cumulative Variance + Actual Output - Planned Output

3. Previous Cumulative Variance + Actual Input - Planned Input

4. Previous Actual Backlog + Actual Input - Actual Output

The correct answer is: Previous Cumulative Variance + Actual Input - Planned Input

The correct formula for calculating cumulative variance for inputs is established by considering both the previous cumulative variance and the difference between actual input and planned input. This approach ensures that you not only account for the most recent input performance but also build upon the past variances that have already been established. Using this formula, you effectively track how much the actual input deviates from what was planned over time. The inclusion of the previous cumulative variance allows you to maintain a running total of discrepancies, offering a clear and comprehensive picture of performance over a specified period. This is crucial for understanding trends, making informed decisions, and identifying areas for improvement within the supply chain process. In contrast, the other formulas do not adequately capture the cumulative nature of input variance. They either address output variance or omit the necessary historical context, which is vital for understanding overall input performance in relation to planned expectations. Therefore, the chosen formula uniquely fulfills the requirement for calculating cumulative variance for inputs systematically and accurately.