Deck 14: Material Requirements Planning and Enterprise Resource Planning

Question 1

Gross requirements for components are equal to the gross requirements of their immediate parent multiplied by the quantity per parent.

Answer 1

False

Question 2

The master production schedule (MPS)states which end items are to be produced.

Answer 2

True

Question 3

The planned-order releases at one level of an MRP plan determine the gross requirements at the next level down in the bill of material.

Answer 3

True

Question 4

A bill of material contains a listing of all the raw materials,parts,and subassemblies needed to produce one unit of an end item.

Question 5

A phantom bill is a special type of bill of material that is a combination of the bill of materials for a number of subassemblies.

Question 6

Lumpy demand for components required for finished goods results primarily from the periodic scheduling of batch production of the goods.

Question 7

An assembly-time chart indicates gross and net requirements.

Question 8

The term pegging refers to identifying the parent items that have generated a given set of requirements for a part or subassembly.

Question 9

Dependent demand is derived demand.

Question 10

For a given component in an MRP plan,under lot-for-lot ordering,planned order sizes are equal to net requirements.

Question 11

The planning horizon for the master production schedule (MPS)should cover or be longer than the cumulative lead time necessary to produce the end items.

Question 12

Independent demand tends to be more sporadic or "lumpy" than dependent demand.

Question 13

The bill of material contains information on lead times.

Question 14

The three basic inputs of MRP are:
1)the bill of material; 2)inventory on hand,open orders and lead times; and 3)planned order releases.

Question 15

The master production schedule (MPS)states which product components are to be produced.

Question 16

MRP requires information on inventory on hand,open orders and lead times and purchase orders for each item in stock.

Question 17

A master production schedule (MPS)is the principal output developed from MRP systems.

Question 18

Dependent demand tends to be intermittent,whereas independent demand tends to be more stable.

Question 19

The MRP requires a list of the individual parts that will be converted to finished goods.

Question 20

MRP usually involves inventory items that have independent demand.

Question 21

ERP systems are based on software modules for various functional areas of a business such as purchasing,production planning,and supply chain management.

Question 22

A regenerative MRP is one that is updated continuously.

Question 23

Safety time is sometimes used in MRP rather than safety stock.

Question 24

Typically the total cost of ownership (TCO)of ERP systems is clearly detailed and certain at the time a company makes the investment to acquire a system.

Question 25

The emergence of ERP systems was primarily because they are less complex to use than MRP systems.

Question 26

A net-change MRP is one that involves periodically updating all aspects of an MRP system.

Question 27

MRP II is simply a label for current,more advanced versions of software applications for MRP.

Question 28

ERP packages are intended to fit established ways of doing business,but some modifications to business processes or the ERP software are typically required.

Question 29

Load reports compare planned capacity requirements with projected capacity and availability.

Question 30

The part-period method for lot sizing attempts to balance setup and holding costs.

Question 31

Load reports of capacity may be misleading as they do not consider queuing delays.

Question 32

For relatively stable situations,a net-change MRP is better suited than using regenerative MRP.

Question 33

Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods.

Question 34

ERP involves software that is used to manage and coordinate all the resources,information,and functions of an organization from a shared database.

Question 35

Load reports show capacity requirements for departments or work centres.

Question 36

Fixed-interval ordering in MRP places orders that cover a predetermined number of periods.

Question 37

MRP II involves an expanded approach to production planning and scheduling than MRP.

Question 38

The part-period method for lot sizing breaks the time periods into smaller units of time to create daily or hourly production schedules.

Question 39

One of the primary reports of MRP concerns changes to open orders.

Question 40

Configuring the ERP software involves reengineering established business processes to align with the ERP's procedural settings.

Question 41

The development and application of MRP is primarily associated with two developments: (1)managers recognizing the need to differentiate between independent and dependent demand,and (2)___________.

A) increased reliance on computers for record keeping
B) development of the EOQ model
C) the need for inventory control systems
D) the emergence of ERP systems
E) accounting systems

Question 42

Which is true of a net-change MRP?

A) It is a batch-type system which is updated periodically.
B) It generates exception reports.
C) The basic production plan is modified to reflect changes as they occur.
D) It is used to authorize the execution of planned orders.
E) It indicates the amount and timing of future changes.

Question 43

The MRP approach that immediately updates only those records directly affected by a change is referred to as a(n):

A) regenerative MRP.
B) batch-type MRP.
C) Plossl-Wright system.
D) net-change MRP.
E) gross-change MRP.

Question 44

The hierarchical diagram that depicts the subassemblies and components that are needed to produce and/or assemble a product is called a(n):

A) assembly time chart.
B) product structure tree.
C) MRP II.
D) pegging.
E) none of the choices.

Question 45

Independent demand tends to be ___________,while dependent demand tends to be __________.

A) unstable; smooth
B) unstable; stable
C) stable; lumpy
D) smooth; sawtooth
E) sawtooth; smooth

Question 46

Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called:

A) pegging.
B) planned order releases.
C) net-change MRP.
D) regenerative MRP.
E) exception report.

Question 47

In an MRP master production schedule,the planning horizon is often separated into a series of times periods called:

A) pegging.
B) lead times.
C) stacked lead times.
D) time buckets.
E) None of the choices.

Question 48

A process designed to handle purchasing and scheduling the production of dependent-demand components is:

A) economic part-period (EPP).
B) lot-for-lot (LFL).
C) economic order quantity (EOQ).
D) material requirements planning (MRP).
E) economic run size (ERS).

Question 49

Which one of the following is not an input in an MRP system?

A) Planned-order releases
B) Bill of materials
C) Master production schedules
D) Inventory on-hand, open orders and lead times
E) All are inputs

Question 50

The gross requirements of a given part or component are determined from:

A) net requirements + amount on-hand.
B) gross requirements of the immediate parent(s).
C) planned order releases of the end item.
D) net requirements of the end item.
E) planned order release of the immediate parent(s).

Question 51

Ignoring the possibility of safety stock requirements,which one of the following most closely describes the calculation of net requirements for an item in MRP?

A) Gross requirements - projected on-hand - scheduled receipts
B) Gross requirements - scheduled receipts
C) Gross requirements - order releases + amount on-hand
D) Gross requirements - planned order releases
E) Gross requirements -projected on-hand + planned order releases

Question 52

ERP automates the tasks involved in performing a business process,such as order fulfilment and financial reporting.

Question 53

In MRP processing the difference between a planned-order release and the planned-order receipt is:

A) level of safety stock.
B) scheduled receipts of open orders.
C) timing as per the lead time.
D) a one is a forecast and the other is actual.
E) the level of net requirements.

Question 54

In MRP,under lot-for-lot ordering,the size of "planned-order receipts" are equal to:

A) "scheduled receipts."
B) "planned-order releases."
C) open orders already scheduled to be delivered.
D) "gross requirements."
E) None of the choices.

Question 55

In MRP,"scheduled receipts" are:

A) identical to "planned-order receipts."
B) identical to "planned-order releases."
C) open orders already scheduled to be delivered.
D) "net requirements" in a time period.
E) None of the choices.

Question 56

Which of these products and services would be most likely to have dependent demand?

A) Automobiles
B) Frozen vegetables
C) Flowers
D) Lumber
E) None of the choices

Question 57

Which of the following most closely describes dependent demand?

A) Demand generated by suppliers.
B) Sales forecasts.
C) Derived demand.
D) Demands placed on suppliers by their customers.
E) Net material requirements.

Question 58

The input used in MRP that lists the assemblies,subassemblies,parts,and raw materials needed to produce one unit of finished product is the:

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

Question 59

Pegging is used primarily for which one of the following purposes?

A) Identifying parent items that have generated a certain set of requirements for an item.
B) Identifying the supplier of a given component.
C) Identifying the supplier of a given component's parent.
D) Periodically update material requirements as conditions change.
E) Obtaining exception reports due to periodic changes in material requirements.

Question 60

The MRP input stating which end items are to be produced,when they are needed,and what quantities are needed,is the:

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

Question 61

If the firm is using lot size for a fixed period of two,what is the order size for the first order?

A) 120
B) 200
C) 280
D) 160
E) 150

Question 62

What is the economic part-period (EPP)for ordering this item?

A) 2
B) 50
C) 100
D) 150
E) 200

Question 63

What is the lot size for the second order using the part-period method?

A) 80
B) 150
C) 170
D) 250
E) 230

Question 64

Which of the following are accurate statements concerning MPS,MRP and capacity requirements planning (CRP)?
I)CRP is equivalent to a master production schedule (MPS).
II)CRP is needed to determine if an MPS is feasible.
III)CRP is an input to MRP.
IV)Planned-order releases from MRP are the inputs for CRP.

A) I and II
B) I, II, and III
C) II and IV
D) II, III, and IV
E) I, II, III, and IV

Question 65

What is the net requirement for Whatzats to fill this order?

A) 100
B) 140
C) 150
D) 180
E) 200

Question 66

If 40 Ps are needed,and on-hand inventory consists of 15 Ps and 10 each of all other components and subassemblies,how many Cs are needed?

A) 340
B) 350
C) 380
D) 400
E) 590

Question 67

When should an order for Wherezats be released?

A) At the start of week 2.
B) At the start of week 3.
C) At the start of week 4.
D) At the start of week 5.
E) At the start of week 6.

Question 68

A report that compares known and expected future capacity requirements with projected available capacity is a:

A) master production schedule.
B) bill of material report.
C) inventory status report.
D) MRP schedule.
E) load report.

Question 69

If 17 Ps are needed,and no on-hand inventory exists,how many Cs will be needed?

A) 8
B) 16
C) 136
D) 204
E) 272

Question 70

How many Wherezats should be ordered?

A) 400
B) 450
C) 500
D) 550
E) 600

Question 71

Under fixed-interval lot sizing,order sizes for component parts are determined based on which one of the following?

A) Gross requirements for one period.
B) Net requirements for some predetermined number of periods.
C) Economic order quantity for one period.
D) Gross requirements - net requirements for a predetermined number of periods.
E) Net requirements - amount on-hand for a predetermined number of periods.

Question 72

Using the product-tree shown,determine the following:
(i)the quantity of component K that will be needed to assemble 80 units of P,assuming no on-hand inventory exists.
(ii)the quantity of component K needed to assemble 80 units of P,given on-hand inventory of 30 A's,50 B's and 20 C's.

Question 73

If 17 Ps are needed,and on-hand inventory consists of 10 As,15 Bs,20 Cs,12 Ms and 5 Ns,how many Cs are needed?

A) 48
B) 144
C) 192
D) 212
E) 272

Question 74

What is the correct sequence to go from the broadest to the most detailed form of operations planning?

A) MRP » MPS » ERP
B) ERP » MRP » MPS
C) ERP » MPS » MRP
D) MPS » ERP » MRP
E) MPS » MRP » ERP

Question 75

Budget overruns when implementing ERP systems are typically caused by:
I)high equipment costs.
II)high training costs.
III)high capital interest charges.
IV)costs of integrating and testing

A) I only
B) I and III only
C) I, II, IV only
D) II and IV only
E) I, II, and IV only

Question 76

Which action can managers take if capacity requirements planning (CRP)indicate one or more work stations are projected to be under loaded or over loaded?

A) Shifting some orders to adjacent periods.
B) Transferring employees from other areas.
C) Scheduling overtime.
D) Revise the MPS and MRP.
E) All of the choices are options.

Question 77

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time?

A) Pegging
B) Safety stock
C) Increased order sizes
D) Safety time
E) Low-level coding

Question 78

Which of the following are primary reports provided by MRP systems?
I)Planned order releases
II)Immediate order releases
III)Demand history reports
IV)Changes to open orders

A) I and II only
B) I, II, III only
C) I, II, IV only
D) II, III, IV only
E) I, II, III, and IV

Question 79

What is the part-period method lot size for the order for the first period?

A) 120
B) 200
C) 280
D) 350
E) 450

Question 80

For which period will the second order be submitted using the part period lot sizing method?

A) Period 2
B) Period 3
C) Period 4
D) Period 5
E) Period 6