CPIM Practice Exam

In a production system, which item should be forecasted as an independent demand item?

1. Only A

2. Only A, B, and C

3. Only D and E

4. Only B, C, D, and E

The correct answer is: Only A

In a production system, independent demand refers to the demand for a product that is not influenced by the demand for other products. This typically applies to finished goods that are sold directly to customers, as their demand is shaped by market conditions, consumer preferences, and other external factors. The correct answer indicates that only the item classified as "A" is considered an independent demand item. This implies that "A" represents a finished good for which demand forecasting is necessary based on market trends and customer orders. Forecasting for independent demand items helps ensure that sufficient stock is available to meet customer needs without being overly reliant on other items or components that may be part of the production process. The rationale behind not forecasting items B, C, D, and E as independent demand items may be that they are components or subassemblies that are influenced by the production schedule or demand for other finished products, and thus are considered dependent demand. Describing any items as dependent means their demand is tied directly to the production of independent demand items. By focusing on the differentiation between independent and dependent demand, individuals can better understand inventory management practices and make informed decisions about production and stock levels in a supply chain context.