Certified Supply Chain Professional (CSCP) Practice Exam

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What does backflushing in an MRP context involve?

Automatically scheduling new orders based on inventory levels
Deducting component quantities from inventory after unit completion
Identifying discrepancies in inventory
Forecasting future inventory needs

The correct answer is: Deducting component quantities from inventory after unit completion

Backflushing in the context of Material Requirements Planning (MRP) is a method used to automatically decrease inventory levels after the final assembly of a product is completed. This process simplifies inventory management by eliminating the need to manually track component usage during manufacturing. Instead, once a finished product is completed, the system automatically deducts the quantities of the components used from inventory, ensuring that the inventory records accurately reflect the components consumed in production. This approach is beneficial for companies that have a relatively predictable bill of materials and where the timing of component usage aligns closely with the manufacturing process. It streamlines operations and helps maintain an accurate inventory count, making it easier to monitor stock levels and manage supply chain operations effectively.