CPIM-PART-2 practice question 21 of 25

The cumulative available-to-promise (ATP) method is based on an assumption that available inventory in a period can be committed to demand in that period and:

Full set: 151 questions
Answer options
A: any future period in the planning horizon. Correct answer
B: any period before the demand time fence (DTF).
C: future periods beyond the DTF.
D: future periods with a planned receipt.
Correct Answer:
A. any future period in the planning horizon.
Explanation

The cumulative available-to-promise (ATP) method is based on an assumption that available inventory in a period can be committed to demand in that period and any future period in the planning horizon. The planning horizon is the time span for which plans are made and executed1. The cumulative ATP is a running total of the ATP figure in the master schedule, which shows the planned production or purchase of a product over a series of time periods2. The cumulative ATP method allows the company to account for future shortages and build up inventory for large or seasonal orders3. The other options are not correct. The demand time fence (DTF) is a point in the near future, usually equal to the cumulative lead time, beyond which changes to the master schedule are not allowed4. The cumulative ATP method does not depend on the DTF, as it considers all future periods in the planning horizon, regardless of whether they are inside or outside the DTF. Future periods with a planned receipt are periods where there is an expected supply of inventory from production or purchase orders2. The cumulative ATP method does not only commit inventory to these periods, but also to any other periods where there is demand. Reference : Available-to-Promise (ATP) - Tutorial; Planning Horizon Definition; Demand Time Fence (DTF) Definition; Cumulative Available-to-Promise | Cargoz.

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