CPIM Practice Exam

What is the name of the set of priority planning techniques for planning component items below the end-item level?

1. Master scheduling

2. Material requirements planning

3. Capacity planning

4. Production activity control

The correct answer is: Material requirements planning

The correct answer is Material Requirements Planning (MRP). This technique focuses on managing inventory levels to ensure that the right quantities of components are available for production as needed, while also minimizing excess inventory. MRP works by breaking down the end-item production into its component parts and analyzing their demand based on the master production schedule. MRP is essential for efficiently planning and scheduling the procurement of materials, which helps businesses maintain operational efficiency and reduce costs associated with overstock or stockouts. By using MRP, organizations can ensure they have the necessary materials at the right time to meet production schedules and customer demand. The other options refer to different aspects of production and planning: Master scheduling pertains to planning of finished goods, Capacity planning focuses on managing the resources needed for production, and Production activity control involves monitoring and controlling the actual production process on the shop floor. Each of these plays a role in production planning, but only MRP specifically addresses component-level planning.