Discuss CIPS L5M10 Exam Topic 10 Question 1

Baby Ltd manufactures 100 prams each quarter. In Q1, it sold 78 prams. A customer phones in March to order 3 prams for the following month. Is there Availability to Promise (ATP)?

AYes -- 22 prams were unsold last quarter

BYes -- 100 prams will be manufactured in Q2 so the customer can order one of these

CMaybe -- it depends on the number of customer orders already received for Q2

DMaybe -- the customer must wait until Q2 to be sure

Suggested Answer: C

Comprehensive and Detailed Explanation From Exact Extract:

Availability to Promise (ATP) is the portion of inventory or planned production that is not yet committed to existing customer orders. It depends on confirmed orders and forecasted production. Without knowing Q2's confirmed demand, ATP cannot be guaranteed.

(Reference: CIPS L5M10 Study Guide, ATP definition and application, p. 182)

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31 comments · newest first

Alex 6 months ago

B is the best choice. They can fulfill the order from new stock.

Amie 6 months ago

I agree with C. It’s uncertain without more info.

Katina 7 months ago

A is wrong. Unsold prams don’t count for future orders.

Portia 7 months ago

D seems reasonable too. Waiting might be necessary.

Marylyn 7 months ago

I feel like C is more accurate. We need to know Q2 orders first.

Laine 7 months ago

I think it's B. They will make 100 more prams.

Rose 7 months ago

Wait, they only sold 78? I thought prams were in high demand!

Lisha 7 months ago

Totally agree with B! Makes sense.

Herman 8 months ago

C) Maybe -- it depends on the number of customer orders already received for Q2

Cornell 8 months ago

B) Yes -- 100 prams will be manufactured in Q2 so the customer can order one of these

Ryan 8 months ago

I'll take one pram, two prams, three prams, four! How many prams can I get?

Mattie 9 months ago

Prams? I thought we were talking about llamas. Where's the llama option?

Mariko 9 months ago

B) 100 prams in Q2? That's a lot of baby-carrying capacity! The customer's order should be no problem.

Marti 9 months ago

D) Better safe than sorry. Waiting until Q2 is the way to go.

Tammara 9 months ago

C) Hmm, gotta consider those other customer orders for Q2. Can't promise anything until we know the full picture.

Veronica 9 months ago

I lean towards B because they will manufacture 100 prams in Q2, so there should be enough for the order, right?

Maurine 9 months ago

I'm not entirely sure, but I feel like D could be correct since the customer has to wait until Q2 to see if they can actually get the prams.

Leatha 10 months ago

I remember a similar question where we had to consider unsold inventory, so maybe A is also a possibility since there were 22 prams left.

Nieves 10 months ago

I think the answer might be C because we need to know how many orders are already in for Q2 before confirming availability.

Fletcher 10 months ago

Okay, I've got it. The answer is C. We don't have enough information to definitively say if there's ATP or not, since we don't know how many orders have already been placed for Q2. The customer will have to wait until Q2 to find out for sure.

Alishia 10 months ago

I think the key here is that the customer is ordering 3 prams for the following month, not the whole quarter. So we need to look at the monthly production and sales, not just the quarterly numbers. The answer is probably C or D, depending on how many orders have already been placed for that month.

Orville 10 months ago

Okay, let me think this through. We know the company sold 78 prams in Q1 and has 100 prams per quarter. So that leaves 22 unsold prams, which would be the answer to A. But the question is asking about availability for the next month, not the whole quarter, so I'm not sure if that's the right approach.

Michael 11 months ago

A) Seems like the obvious choice. 22 prams unsold last quarter, easy peasy.

Rory 11 months ago

A) Yes -- 22 prams were unsold last quarter

Ronald 11 months ago

Hmm, I'm a bit confused. I was thinking the answer might be B since the company manufactures 100 prams per quarter, so the customer could just order one of those. But I'm not totally sure.

Herman 12 months ago

I'm pretty sure the answer is C. We need to know how many customer orders have already been received for Q2 to determine if there's enough availability.

Vincent 6 months ago

↳ replying to Herman

I wonder how many prams were ordered last quarter too.

Louann 6 months ago

↳ replying to Herman

Exactly! C covers that uncertainty well.

Dalene 10 months ago

↳ replying to Herman

I think C makes sense. We need to check the orders first.

Larue 11 months ago

↳ replying to Herman

Agreed, C is the best choice. Can't assume there's enough.

Ashton 11 months ago

↳ replying to Herman

But what if they have a lot of orders already?

CIPS L5M10 Exam - Topic 10 Question 1 Discussion