CPIM Practice Exam

What is the main purpose of safety stock in an MRP system?

1. To ensure all scheduled receipts are fulfilled

2. To provide a buffer against variability in demand

3. To calculate net requirements accurately

4. To replace items as soon as they are used

The correct answer is: To provide a buffer against variability in demand

Safety stock serves as a crucial buffer within an MRP (Material Requirements Planning) system, primarily designed to address unpredictability in demand and supply. By maintaining a reserve of inventory, safety stock helps prevent stockouts, which can occur due to unexpected spikes in customer demand or delays in supplier deliveries. This buffer is essential for ensuring that operations can continue smoothly even when actual usage deviates from forecasted levels. In an environment where demand can fluctuate due to factors like market trends, seasonal variations, and other uncertainties, safety stock mitigates the risk of running out of important items. This is particularly vital for organizations that operate in industries with high variability in customer orders or where lead times for production and procurement are long. By having safety stock, companies can maintain service levels, meet customer satisfaction, and optimize their inventory management processes. The purpose of safety stock is not primarily to fulfill scheduled receipts, accurately calculate net requirements, or to replace items immediately upon use. Those functions are related to different aspects of inventory control and MRP, emphasizing that safety stock's specific role is to act as a necessary cushion against variability in demand.