Deck 14: Material Requirements Planning Mrp and Erp

Question 1

The master production schedule is a forecast of demand for families of products.

Answer 1

False

Question 2

Reduced inventory levels and faster response to market changes are both benefits of MRP.

Answer 2

True

Question 3

Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.

Answer 3

True

Question 4

The time-phased product structure, unlike the bill of material, adds the concept of lead times.

Question 5

MRP is generally practiced on items with dependent demand.

Question 6

Gross material requirements do not take into account the amount of inventory on hand.

Question 7

A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item.

Question 8

The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.

Question 9

Time fences divide that segment of the MPS that can be revised from that section that is "frozen."

Question 10

Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.

Question 11

If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.

Question 12

MRP is an excellent tool for scheduling products with variable lead times.

Question 13

A dependent demand item is so called because its demand is dependent on customer preferences.

Question 14

Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning.

Question 15

"Phantom bills" are bills of material for subassemblies that do not exist in reality.

Question 16

Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.

Question 17

If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.

Question 18

Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.

Question 19

The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how much of which products is to be made at what times.

Question 20

In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.

Question 21

The phrase "demand related to the demand for other products" describes

A) a dependent variable
B) dependent demand
C) recursive demand
D) regression analysis
E) independent demand

Question 22

Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.

Question 23

The supply-chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.

Question 24

DRP is a time-phased stock-replenishment plan for all levels of a distribution network.

Question 25

The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

Question 26

Demand for a given item is said to be dependent if

A) it originates from the external customer
B) there is a deep bill of material
C) the finished products are mostly services (rather than goods)
D) there is a clearly identifiable parent
E) the item has several children

Question 27

If parts and subassemblies common to a variety of products are managed through the supermarket concept, formal order releases for such parts are not necessary.

Question 28

Wheeled Coach insists all of the following tasks are key to successful MRP use except

A) materials plan must meet both schedule requirements and facility capabilities
B) plan must be executed as designed
C) inventory investment must be minimized
D) excellent record integrity must be maintained
E) stringent quality control

Question 29

In general, the lot-for-lot approach should be used whenever economical.

Question 30

Which of the following statements regarding Wheeled Coach is false?

A) Wheeled Coach has found competitive advantage through MRP.
B) Wheeled Coach builds ambulances in a repetitive process.
C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.
D) Wheeled Coach's MRP system maintains excellent record integrity.
E) Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

Question 31

Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

Question 32

Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.

Question 33

The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.

Question 34

Dependent demand and independent demand items differ in that

A) for any product, all components are dependent-demand items
B) the need for independent-demand items is forecast
C) the need for dependent-demand items is calculated
D) All of the above are true.
E) None of the above is true.

Question 35

By convention, the top level in a bill of material is designated level 1.

Question 36

Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.

Question 37

While ERP may provide a strategic advantage over competitors, it is so complex that many companies cannot adjust to it.

Question 38

When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected on-hand inventory of the MRP logic.

Question 39

MRP can be effective only if very accurate lot sizes are calculated in advance.

Question 40

The economic part period is a fraction of a time bucket.

Question 41

The following table is an example of a(n)

A) aggregate plan
B) load report
C) master production schedule
D) capacity plan
E) inventory record

Question 42

The bill of material contains information necessary to

A) place an order to replenish the item
B) calculate quantities on hand and on order
C) convert net requirements into higher level gross requirements
D) convert gross requirements into net requirements
E) convert (explode) net requirements at one level into gross requirements at the next level

Question 43

The __________ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities.

A) master production schedule
B) load report
C) inventory records
D) assembly time chart
E) bill of material

Question 44

In continuous (stock-to-forecast) operations, the master production schedule is usually expressed in terms of

A) end items
B) modules
C) kits
D) customer orders
E) warehouse orders

Question 45

A grill assembly takes 20 washers. Instead of listing these washers separately they are grouped into a single kit for production. The bill of material for the washers is classified as

A) "Pseudo"
B) Planning
C) Modular
D) Low-level
E) A and B

Question 46

A master production schedule contains information about

A) quantities and required delivery dates of all subassemblies
B) quantities and required delivery dates of final products
C) inventory on hand for each subassembly
D) inventory on hand for each final product
E) scheduled receipts for each final product

Question 47

Firms making many different final products use __________ to facilitate production scheduling.

A) planning bills
B) modular bills
C) phantom bills
D) overdue bills
E) none of the above

Question 48

In job shop (make-to-order) operations, the master production schedule is usually expressed in

A) end items
B) modules
C) kits
D) customer orders
E) warehouse orders

Question 49

An engineering change notice is used to change a(n)

A) MRP
B) MPS
C) ERP
D) BOM
E) none of the above

Question 50

Which of the following is not a key benefit of MRP?

A) quality increases
B) better response times to customer orders
C) faster response to market changes
D) improved utilization of facilities
E) reduced inventory levels

Question 51

The aggregate plan gets input or feedback from which of the following areas?

A) engineering
B) finance, marketing, and human resources
C) the master production schedule
D) procurement, production, and general management
E) all of the above

Question 52

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n)

A) modular bill
B) engineering change notice
C) resource requirements profile
D) lead time-offset product structure document
E) planning bill

Question 53

Effective use of MRP and other dependent demand models does not require which of the following?

A) master production schedule
B) bill of materials
C) inventory availability
D) lead times
E) cost of individual components

Question 54

A paint company mixes ten different base colors into 3,000 different color options. If the MPS is organized around the ten different base colors their bills of material are classified as

A) Phantom
B) Planning
C) Modular
D) Low-Level
E) A and B

Question 55

A bill of material lists the

A) times needed to perform all phases of production
B) production schedules for all products
C) components, ingredients, and materials required to produce an item
D) operations required to produce an item
E) components, ingredients, materials, and assembly operations required to produce an item

Question 56

Which portion of the master production schedule is normally fixed, frozen, or firm?

A) the entire schedule
B) only the aggregate schedule
C) only the middle of the schedule
D) only the near-term portion
E) only the far-term portion

Question 57

Which of the following statements best compares modular bills and phantom bills?

A) Both pertain to assemblies that are not inventoried.
B) There is no difference between the two.
C) Both pertain to assemblies that are inventoried.
D) Modular bills are used for assemblies that are not inventoried, unlike phantom bills.
E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

Question 58

A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n)

A) net requirements document
B) resource requirements profile
C) aggregate plan
D) master production schedule
E) Wagner-Whitin finite capacity document

Question 59

The __________ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product.

A) bill of material
B) master production schedule
C) inventory records
D) assembly time chart
E) net requirements chart

Question 60

A master production schedule specifies

A) the raw materials required to complete the product
B) what component is to be made, and when
C) what product is to be made, and when
D) the labor hours required for production
E) the financial resources required for production

Question 61

Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is __________ weeks.

A) 6
B) 9
C) 12
D) 18
E) 28

Question 62

A material requirements plan contains information with regard to all of the following except

A) quantities and required delivery dates of all subassemblies
B) quantities and required delivery dates of final products
C) the capacity needed to provide the projected output rate
D) inventory on hand for each final product
E) inventory on hand for each subassembly

Question 63

Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E?

A) 4
B) 100
C) 200
D) 250
E) 300

Question 64

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic?

A) Gross Requirements
B) Scheduled Receipts
C) Projected On Hand
D) Net Requirements
E) Planned Order Receipts

Question 65

The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are

A) 20
B) 120
C) 180
D) 240
E) 440

Question 66

The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are

A) 115
B) 175
C) 240
D) 690
E) 700

Question 67

Linking a part requirement with the parent component that caused the requirement is referred to as

A) net requirements planning
B) a time fence
C) pegging
D) kanban
E) leveling

Question 68

Which of the following statements regarding the gross material requirements plan is true?

A) It shows total demand for an item.
B) It shows when an item must be ordered from a supplier or when production must be started.
C) It combines a master production schedule with the time-phased schedule.
D) It requires several inputs, including an accurate bill of material.
E) All of the above are true.

Question 69

Which of the following best describes a gross material requirements plan?

A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started
B) an intermediate range plan for the scheduling of families of products
C) a chart illustrating whether capacity has been exceeded
D) a table that corrects scheduled quantities for inventory on hand
E) a schedule showing which products are to be manufactured and in what quantities

Question 70

In MRP, the number of units projected to be available at the beginning of each time period refers to

A) net requirements
B) scheduled receipts
C) the projected usage of the item
D) the amount projected to be on hand
E) the amount necessary to cover a shortage

Question 71

The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are

A) 150
B) 170
C) 300
D) 320
E) 440

Question 72

Given the following bill of material If the demand for product A is 30 units, and there are 10 units of B on hand and none of C, how many units of part D will be needed?

A) 3
B) 40
C) 70
D) 90
E) 110

Question 73

In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket

A) signals the need to purchase that end item in that period
B) implies that value was scheduled by the MPS
C) signals the need for a negative planned order receipt in that period
D) is impossible
E) All of the above are true.

Question 74

Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is __________ weeks.

A) 6
B) 7
C) 8
D) 10
E) cannot be determined

Question 75

It is week 1 and there are currently 20 As in stock. The MPS calls for 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 1 week when and how large of an order should be placed to meet the requirement of 300 As?

A) Week 1, 300 A s
B) Week 1, 40 A s
C) Week 5, 40 A s
D) Week 4, 40 A s
E) Week 4, 300 A s

Question 76

Given the following bill of material If the demand for product A is 50 units, what will be the gross requirement for component E?

A) 50
B) 100
C) 150
D) 200
E) 300

Question 77

The minimum record accuracy required for successful MRP is approximately

A) lower than 90%
B) 90%
C) 95%
D) 97%
E) 99%

Question 78

If safety stock is desired it should be built into which portion of MRP?

A) any
B) none
C) raw materials
D) finished assemblies
E) either C or D

Question 79

Low level coding means that

A) a final item has only a few levels in the BOM structure
B) it is the code for the lowest level in the BOM structure
C) a component item is coded at the lowest level at which it appears in the BOM structure
D) the top level of the BOM is below level zero and that BOMs are not organized around the finished product
E) none of the above

Question 80

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is __________ days.

A) 6
B) 9
C) 13
D) 17
E) cannot be determined