CPIM Practice Exam

What are net requirements in an MRP system?

1. The total gross requirements before scheduling

2. The available inventory after demand and receipts are considered

3. The projected available inventory over time

4. The sum of planned order receipts and scheduled receipts

The correct answer is: The available inventory after demand and receipts are considered

Net requirements in an MRP (Material Requirements Planning) system refer to the available inventory after accounting for demand and receipts. This concept is crucial within MRP because it helps in determining the actual inventory needed to fulfill production goals. In this context, net requirements are calculated by taking the total gross requirements (the total amount required for production) and subtracting any inventory already on hand as well as any planned receipts. By doing this calculation, companies can accurately identify how much additional inventory needs to be ordered, ensuring that production can continue without interruption. This approach allows for better inventory management, preventing excess stock and reducing carrying costs while ensuring that enough materials are available to meet production schedules. It's essential for effective planning and helps optimize supply chain operations. The other options represent different aspects of the MRP process but do not accurately describe net requirements. For instance, total gross requirements refer to the total material needed before considering existing inventory or receipts, which is a step prior to calculating net requirements. Similarly, projected available inventory is a forecast rather than a measure of net requirements, and the sum of planned order and scheduled receipts also does not align with the definition of net requirements as it does not take into account current inventory status.