Which of the following statements is TRUE about pegging?
A) It traces downward in the BOM from the parent item to the component.
B) It causes system nervousness.
C) It allows a segment of the master schedule to be designated as "not to be scheduled."
D) It allows the production planner to determine the cause for the requirement and make a judgment about the necessity for a change in the schedule.
E) It is an excellent tool for make-to-order environments.

Question

Quizplus · Accepted Answer

Pegging in inventory and production management refers to the ability to trace the relationships between inventory items, particularly how the demand for a finished product translates into demand for its components. This allows production planners to understand why certain items need to be produced or ordered, helping them make informed decisions about adjustments to the production schedule. It does not inherently cause system nervousness, designate parts of the master schedule as unschedulable, or trace downward in the BOM; rather, it provides visibility across the supply chain. While it can be useful in make-to-order environments, this is not its defining feature.

Which of the Following Statements Is TRUE About Pegging