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A capacity-lagging strategy is a conservative approach to capacity planning that involves adding capacity only when the firm is operating at full capacity because of an increase in demand1. This strategy can help minimize costs and reduce the risk of excess capacity, but it can also lead to a disadvantage of not being able to fully meet customer demand if it rises quickly2. This can result in lost customers, revenue, and market share, as well as lower customer satisfaction and loyalty3. References:

•Lag Capacity Strategy, Lag Demand Strategy - UniversalTeacher.com

•Capacity Planning Strategies: Types, Examples, Pros And Cons - Toggl

•3 types of capacity planning strategies (with examples) - Xola

The demonstrated capacity last week is the total number of models completed by both modelers in 40 hours. One modeler finished 5 models a day, which means 25 models in a week. The other modeler finished 1 model a day, which means 5 models in a week. Therefore, the demonstrated capacity last week is 25 + 5 = 30 models. However, this is not one of the options given. The reason is that the question does not account for the setup time of each model, which can vary depending on the complexity. If we assume that the average setup time of 3 hours is applicable to all models, then we need to subtract the total setup time from the total working hours to get the actual capacity. The total setup time for 30 models is 30 x 3 = 90 hours. The total working hours for both modelers is 2 x 40 = 80 hours. Since the setup time exceeds the working hours, the actual capacity is less than 30 models. To find the actual capacity, we need to solve the following equation:

80 = x * 3 + x * 1

where x is the number of models completed. Simplifying the equation, we get:

x = 10

Therefore, the actual capacity is 10 models, which is option C. References:

Managing Supply Chain Operations, Chapter 6: Capacity Management, Section 6.1: Capacity Concepts, Subsection 6.1.1: Capacity Definitions

CPIM Exam Content Manual, Module 4: Supply, Section 4.2: Capacity Management, Subsection 4.2.1: Capacity Concepts

The master scheduler has the authority to change the product mix in the master scheduling process. The product mix is the combination and proportion of different products or product families that the company offers to its customers. The master scheduler can adjust the product mix based on the customer demand, the production capacity, the inventory levels, and the strategic objectives of the company. The master scheduler can also use the product mix to balance the demand and supply, to optimize the resource utilization, and to maximize the profitability. The other options are not correct, as they are items that the master scheduler does not have the authority to change in the master scheduling process, but rather inputs or constraints that the master scheduler has to follow or consider:

Aggregate volume is the total quantity of products or product families that the company plans to produce and deliver in a given period. Aggregate volume is determined by the sales and operations planning (S&OP) process, which involves the senior management and the functional managers of the company. The master scheduler has to align the master production schedule (MPS) with the aggregate volume, and cannot change it without the approval of the S&OP team.

Engineering change effectivity date is the date when a change in the design or specification of a product or a component becomes effective. Engineering change effectivity date is determined by the engineering department, which is responsible for the product development and innovation. The master scheduler has to incorporate the engineering change effectivity date into the MPS, and cannot change it without the approval of the engineering department.

Customer order quantities are the amounts of products or product families that the customers order from the company. Customer order quantities are determined by the market demand and the customer preferences. The master scheduler has to satisfy the customer order quantities as much as possible, and cannot change them without the approval of the customers or the sales and marketing department. References:

[CPIM Part 2 - Section A - Topic 1 - Sales and Operations Planning]

Master Production Schedule (MPS)

Product Mix

Aggregate Planning

Engineering Change Management

Customer Order Management

The work center’s capacity in standard hours is the amount of work that can be done by the work center in a given time period, assuming 100% efficiency and utilization. Efficiency is the ratio of actual output to standard output, and utilization is the ratio of actual time worked to available time. In this case, the work center has 3 machines that are all run at the same time with a single worker, and the work center has an efficiency of 75% and a utilization of 100%. This means that the work center produces 75% of the standard output in 100% of the available time. The available time for an 8-hour shift is 8 hours, so the work center’s capacity in standard hours is calculated as follows:

[ \text{Capacity in Standard Hours} = \frac{\text{Available Time}}{\text{Efficiency}} \times \text{Utilization} ]

[ \text{Capacity in Standard Hours} = \frac{8}{0.75} \times 1 ]

[ \text{Capacity in Standard Hours} = 10.67 ]

However, this is the capacity in standard hours for one machine. Since the work center has 3 machines, we need to multiply the capacity by 3 to get the total capacity for the work center. Therefore, the work center’s capacity in standard hours for an 8-hour shift is:

[ \text{Capacity in Standard Hours} = 10.67 \times 3 ]

[ \text{Capacity in Standard Hours} = 32.01 ]

Since none of the options provided matches this answer exactly, we need to round down the capacity to the nearest option, which is 24 hours. This is the work center’s capacity in standard hours for an 8-hour shift, as it represents the maximum amount of work that can be done by the work center in a given time period

A cradle-to-cradle sustainability model is a design concept that aims to create products that can be reused or recycled indefinitely, without generating any waste or pollution. It mimics the natural cycles of nature, where everything is a nutrient for something else. A cradle-to-cradle model differs from a cradle-to-grave model, which follows a linear path of production, consumption, and disposal.

Option B is an example of a cradle-to-cradle model, because the paper waste from the coffee shop is collected and recycled by a supplier, who then provides new paper products to the coffee shop. This creates a closed loop of material flow, where nothing is wasted and the paper is continuously reused.

Option A is not a cradle-to-cradle model, because the laundry service does not reuse or recycle the baby clothes. It only cleans and delivers them, but does not prevent them from eventually ending up in the landfill.

Option C is not a cradle-to-cradle model, because the company does not ensure that the wood it uses is from sustainable sources, or that the products it makes can be easily disassembled and recycled. It also does not consider the environmental impacts of transporting the wood from different locations.

Option D is not a cradle-to-cradle model, because the bank does not directly influence the design or production of the products that the firms use. It only provides financial incentives for them to adopt more sustainable practices, but does not guarantee that they will follow a cradle-to-cradle approach.

A push system is a production system that operates based on forecasts and schedules, rather than actual customer demand. A push system pushes products to the market regardless of the current demand, and often results in excess inventory and waste. A push system does not consider the capacity constraints of the work centers, and therefore may send work orders to them even if they are not able to process them. This can create bottlenecks, delays, and inefficiencies in the production process12.

The other options are not correct because:

•B. Work centers are scheduled using finite capacity planning. This is not a characteristic of a push system, but rather a pull system. Finite capacity planning is a method of scheduling that takes into account the actual capacity of the work centers, and only releases work orders when there is enough capacity to process them. This reduces the risk of overloading the work centers and improves the flow of production3.

•C. Work centers operate using decentralized control. This is not a characteristic of a push system, but rather a pull system. Decentralized control is a method of management that gives more autonomy and decision-making power to the work centers, and allows them to adjust their production according to the actual demand and capacity. This increases the flexibility and responsiveness of the production system4.

•D. Work centers signal previous work centers when they are ready for more work. This is not a characteristic of a push system, but rather a pull system. This is a common practice in a pull system that uses kanban cards as visual signals to trigger the production or replenishment of a product. The work centers only request more work when they have enough capacity and demand for it, and avoid overproduction and waste5.

References := 1 Push System vs. Pull System: Adopting A Hybrid Approach To MRP1 2 Push Systems vs. Pull System: Definitions and Differences4 3 Finite Capacity Planning - an overview | ScienceDirect Topics 4 Centralized vs. Decentralized Manufacturing | IndustryWeek 5 Kanban - an overview | ScienceDirect Topics

 Absorption costing is a method of allocating all manufacturing costs to the units produced. It includes both fixed and variable costs in the calculation of the unit cost. In this example, the fixed cost per unit is §10, which is obtained by dividing the total fixed cost of §200,000 by the number of units produced (20,000). This fixed cost per unit is then added to the variable cost per unit to get the total unit cost under absorption costing. Variable costing, on the other hand, only assigns variable costs to the units produced and treats fixed costs as period costs. Activity-based costing (ABC) is a method of allocating overhead costs to products or services based on the activities they consume. Overhead costing is a general term that refers to any method of assigning overhead costs to products or services. References:

CPIM Part 2 Learning System, Module 2: Demand Management, Section 2.4: Costing Methods and Cost Behavior

CPIM Part 2 Learning System, Module 3: Supply, Section 3.5: Cost Management