Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following best describes master planning?

1. A short-term production plan

2. Processes that include demand management, production, and resource planning

3. A tool for supplier performance evaluation

4. A financial forecasting method

The correct answer is: Processes that include demand management, production, and resource planning

Master planning encompasses a comprehensive approach that integrates various essential processes within supply chain management. It includes demand management, which involves forecasting customer demand in order to align production and inventory levels accordingly. Additionally, master planning involves production planning, ensuring that production resources are allocated to meet the forecasted demand effectively. Resource planning is also a critical component, as it involves determining what resources (such as materials, labor, and capacity) are required to meet both current and future demand. This holistic view is what sets master planning apart from other more focused aspects of supply chain management. While short-term production plans might focus on immediate tasks and output, master planning takes a broader perspective that aligns with strategic goals over a longer horizon. Other options, such as evaluating supplier performance or financial forecasting, may play roles within the overall supply chain management framework, but they do not encapsulate the integrated nature of master planning. Hence, recognizing that master planning combines demand management, production, and resource planning highlights its essential function in creating effective supply chain operations.