CPIM Practice Exam

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What does interplant demand refer to?

The requirement for extra inventory
Demand for parts from external suppliers
The need for products manufactured by other divisions
Requests for products based on regional sales

The correct answer is: The need for products manufactured by other divisions

Interplant demand specifically refers to the demand for products or components that are manufactured or supplied by different divisions or plants within the same organization. This can happen when one division requires certain products to meet its production needs that are fulfilled by another division of the same company. This internal interaction helps streamline operations and manage supply chain logistics effectively. The other options address different concepts within supply chain management. For instance, the requirement for extra inventory relates to safety stock or buffer stock and is not specifically tied to interplant activities. Demand for parts from external suppliers pertains to external, third-party sourcing rather than internal transfers. Requests for products based on regional sales focus on external customer demand rather than interplant interactions. Thus, interplant demand uniquely captures the need for cooperation and supply sharing within an organization's different divisions.