CPIM Practice Exam

Given gross requirements of 100 units for item A and net requirements of 80 units, what was the available inventory of A?

1. 20 units

2. 40 units

3. 60 units

4. Not enough information provided

The correct answer is: 20 units

To understand why the answer is 20 units, it helps to break down the concepts of gross requirements, net requirements, and available inventory. Gross requirements refer to the total demand for a product before any adjustments are made for stock on hand or any scheduled receipts. In this case, there is a gross requirement of 100 units for item A. Net requirements, on the other hand, consider the available inventory to determine how many additional units need to be produced or ordered to meet demand. The net requirement for item A is given as 80 units. This number indicates how many units are needed after accounting for the existing inventory. To find the available inventory, we can apply the formula: Available Inventory = Gross Requirements - Net Requirements. Substituting the values from the question: Available Inventory = 100 units (Gross Requirements) - 80 units (Net Requirements) = 20 units. Therefore, the available inventory for item A is indeed 20 units. This calculation shows that after fulfilling the net requirement, 20 units remain from what was initially needed.