CPIM Practice Exam

What does the critical ratio (CR) help determine in job processing?

1. Order of jobs based on machine availability

2. Relative priority of orders at the work center

3. Overall production costs

4. Worker efficiency rates

The correct answer is: Relative priority of orders at the work center

The critical ratio (CR) is a key performance metric used in job processing to prioritize tasks by evaluating their urgency and importance. It is calculated by taking the time remaining until the due date of a job and dividing it by the time required to complete the job. This ratio helps determine which jobs should be completed first based on their relative priorities in relation to their deadlines. When the critical ratio is less than one, it indicates that the job is behind schedule and may require immediate attention. Alternatively, when the ratio is greater than one, it suggests that the job is ahead of schedule and can be deprioritized. Thus, the critical ratio effectively guides decision-makers in resource allocation and workflow management by highlighting which orders need to be prioritized at a work center. This makes it clear why the determination of relative priority of orders is the correct interpretation of what the critical ratio accomplishes in job processing.