CPIM Practice Exam

What is a planned order receipt?

1. The quantity to be received at a future date

2. The total gross requirements for an item

3. A record of scheduled receipts

4. The quantity on hand in inventory

The correct answer is: The quantity to be received at a future date

A planned order receipt refers specifically to the quantity of items that is scheduled to be received at a predetermined future date. This concept is essential in production and inventory management as it helps organizations plan their resources and schedules effectively. When a planned order receipt is created, it indicates that a specific order has been placed or will be placed for production or procurement to fulfill future demand. This ensures that there is a clear understanding of upcoming inventory levels to meet demand forecasts, supporting efficient production scheduling and inventory control. The calculation and monitoring of planned order receipts allow companies to make informed decisions regarding purchasing and manufacturing timelines to avoid shortages or excess inventory. Understanding the other options provides additional context. The total gross requirements for an item is a broader concept that encompasses all units needed for a certain period, not specifically tied to a planned order. A record of scheduled receipts relates to actual orders that are confirmed for arrival but does not specify the future orders per se, while the quantity on hand in inventory refers to items that are already available and does not reflect future receipts. Thus, the idea that a planned order receipt focuses specifically on the future expected quantity is what makes this choice correct.