Final answer:
Pegging in inventory management is used for identifying parent items that have generated a certain set of requirements for an item, helping in understanding the relationship between a component and its parent items, and in managing production and inventory levels effectively.
Step-by-step explanation:
Pegging is a term used within the context of inventory and production management. The correct answer to the student's question is: D) Identifying parent items that have generated a certain set of requirements for an item.
Pegging is an important feature in material requirements planning (MRP) systems. It allows users to trace individual pieces of inventory back to the source of their demand, which could be a particular finished product or another intermediate item in the production process. By doing so, it helps in understanding the relationship between a component and its parent items, and assists in prioritizing production activities, managing inventory levels more effectively, and addressing any potential disruptions in the supply chain. Pegging does not primarily concern itself with updating material requirements as conditions change, generating exception reports, identifying the supplier of a given component's parent, or identifying the supplier of a given component.