Supply Chain Planning and Execution Flashcards

What is the primary purpose of Sales and Operations Planning (S&OP)?

Answer: To align supply and demand plans across business functions at an aggregate level

S&OP is a cross-functional process that reconciles demand plans with supply capabilities to create a unified business plan.

Which forecasting method uses historical data patterns such as trend and seasonality to predict future demand?

Answer: Time series analysis

Time series analysis extracts patterns from historical demand data — including trends and seasonal cycles — to project future demand.

In a Master Production Schedule (MPS), 'time fences' are used to:

Answer: Define periods where schedule changes are restricted or require management approval

Time fences protect the near-term MPS from disruptive changes by requiring formal approval for modifications within defined periods.

What does 'available-to-promise' (ATP) indicate in order management?

Answer: The uncommitted inventory or planned production that can be promised to new customer orders

ATP calculates the quantity available for commitment to new orders by subtracting already promised inventory from on-hand stock and scheduled receipts.

Material Requirements Planning (MRP) is primarily driven by:

Answer: The Master Production Schedule and the Bill of Materials

MRP uses the MPS as input demand and explodes it through the BOM to calculate time-phased component and material requirements.

Which of the following best describes 'capacity requirements planning' (CRP)?

Answer: Translating planned production orders into workload on production resources to identify capacity gaps

CRP converts planned and released production orders into hours required at each work center to verify that capacity is sufficient.