CPIM Practice Exam

How is a planned order release derived in MRP?

1. By calculating the safety stock

2. By offsetting planned order receipts

3. By aggregating gross requirements

4. By netting against scheduled receipts

The correct answer is: By offsetting planned order receipts

The correct derivation of a planned order release in Material Requirements Planning (MRP) involves the process of offsetting planned order receipts. This step is crucial as it determines when to place orders for materials based on the timing of expected inventory receipts. In MRP, planned orders are created to ensure that materials are available for production when needed. To efficiently manage inventory levels and ensure that production schedules can be met, MRP systems calculate when these orders should be released. This calculation accounts for lead times, which are the periods required to procure, produce, or transport the materials needed. Offsetting planned order receipts means that the system considers the timing of when materials are expected to arrive (planned order receipts) and works backward to establish when to place the order to ensure that materials are available just in time for production. This process helps prevent stockouts and ensures that resources are utilized efficiently. The other options do not accurately reflect how planned order releases are derived within the MRP framework. Safety stock is a buffer and does not determine order releases, while aggregating gross requirements is part of the overall MRP calculation but does not directly lead to planned order releases. Lastly, netting against scheduled receipts refers to determining net requirements, which is a prior step in the