CPIM Practice Exam

Which of the following best describes the role of scheduled MPS receipt in the ending PAB calculations?

1. It is the cost of materials

2. It is the number of units planned to receive in a specific period

3. It impacts the total labor hours needed

4. It is a forecast of sales demand

The correct answer is: It is the number of units planned to receive in a specific period

The scheduled Master Production Schedule (MPS) receipt plays a crucial role in calculating the planned available balance (PAB) by providing a specific quantity of units that are intended to be received during a designated time period. This planned receipt forms a key component of inventory management, allowing production planners to accurately anticipate the availability of goods to meet demand. In the context of PAB calculations, the scheduled MPS receipt ensures that production and inventory levels are aligned with the company’s goals. By knowing how many units are expected to arrive, planners can make informed decisions regarding production runs, inventory replenishment, and overall supply chain optimization. This enhances the efficiency of inventory control, as it provides clarity on how much stock will be available for fulfilling customer orders, and helps in minimizing stockouts or excess inventory. This understanding is essential for effective planning and coordination in a manufacturing or production environment, ensuring that resources are allocated efficiently and that production schedules are effectively managed. The other options do not accurately reflect this function of the scheduled MPS receipt in relation to PAB calculations.