CPIM Practice Exam

At what level of production planning can planning occur without managing inventory?

1. Master scheduling

2. Sales and operations planning

3. Material requirements planning

4. It is not possible to manage one without the other

The correct answer is: It is not possible to manage one without the other

In the context of production planning, inventory management is a crucial component that is typically integrated with various planning levels to ensure that the right quantities of materials and products are available when needed. However, at the sales and operations planning level, organizations align supply and demand over a medium-term horizon, focusing more on overall capacity and strategic goals rather than on specific inventory levels. At this stage, companies are examining market demand and planning their operations to meet that demand without directly dealing with the intricacies of inventory management. Sales and operations planning emphasizes balancing supply capabilities with anticipated market demand, which can sometimes lead to decisions being made about production and workforce levels without direct consideration of specific inventory quantities. As a result, it is possible for planning to occur here without the direct management of inventory, highlighting a separation between strategic planning and inventory control.