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Question 502 - CSCP discussion

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In distribution requirements planning (DRP), projected on-hand inventory is equal to the prior week's on-hand inventory minus the current week's gross requirements plus:

A.
planned production.
Answers
A.
planned production.
B.
planned orders.
Answers
B.
planned orders.
C.
safety stock.
Answers
C.
safety stock.
D.
scheduled receipts.
Answers
D.
scheduled receipts.
Suggested answer: D

Explanation:

In Distribution Requirements Planning (DRP), the calculation of projected on-hand inventory is a crucial aspect. The formula used for this calculation is:

ProjectedOn-HandInventory=PriorWeek'sOn-HandInventoryCurrentWeek'sGrossRequirements+ScheduledReceiptsProjectedOn-HandInventory=PriorWeek'sOn-HandInventoryCurrentWeek'sGrossRequirements+ScheduledReceipts

Here's the breakdown:

Prior Week's On-Hand Inventory: This is the amount of inventory available at the end of the previous period.

Current Week's Gross Requirements: These are the total demands for the current period, which includes customer orders and forecasted demand.

Scheduled Receipts: These are the quantities of inventory that are expected to be received in the current period from previously placed orders.

Therefore, to maintain an accurate calculation of on-hand inventory, you subtract the current week's gross requirements from the prior week's on-hand inventory and add any scheduled receipts that are expected to arrive.

APICS Dictionary, 16th Edition

'Distribution Requirements Planning: The Gateway to Supply Chain Management' by Donald J. Bowersox, David J. Closs, M. Bixby Cooper

'Manufacturing Planning and Control for Supply Chain Management' by F. Robert Jacobs, William Berry, D. Clay Whybark, Thomas E. Vollmann

asked 16/09/2024
Syed Azar
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