CPIM Practice Exam

Which planning function determines the need to replenish inventory at branch warehouses?

1. Time-phased order point

2. Distribution requirements planning

3. Centralized inventory control

4. Transportation management

The correct answer is: Distribution requirements planning

The planning function that determines the need to replenish inventory at branch warehouses is Distribution Requirements Planning (DRP). DRP is specifically focused on managing inventory across a network of locations, ensuring that the right amounts of inventory are available at the right time in different branches or warehouses. It uses forecasts and existing inventory levels to calculate replenishment needs, making it essential for maintaining service levels and optimizing stock levels across the supply chain. While the other options address various aspects of inventory and supply chain management, they do not specifically focus on the comprehensive planning of inventory replenishment at multiple locations. Time-phased order point is more about managing inventory levels based on time intervals rather than across different warehouses. Centralized inventory control generally refers to managing inventory from a single location without the dynamics of various branch warehouses. Transportation management primarily deals with the logistics and movement of goods rather than the planning of inventory levels needed at various branch locations.