Deck 16: Resource Planning

Question 1

An ERP system revolves around a single comprehensive database that is made available across the entire organization.

Answer 1

True

Question 2

A materials requirements planning (MRP)explosion occurs when the system is bombarded with too many orders to schedule at one time.

Answer 2

False

Question 3

A firm's existing,older information system is called a "legacy system."

Answer 3

True

Question 4

The master production schedule (MPS)is the part of the material requirements planning that specifies when components must be ordered or assembled.

Question 5

Gross requirements are the total demand derived from all parent production plans.

Question 6

Companies that fully customize their ERP implementation reap the greatest rewards from such systems since they can continue to use the same processes to which all employees are accustomed.

Question 7

Dependent demand for an item occurs because the quantity required for it varies with the production plans of one or more parents.

Question 8

An end item in a BOM is typically both a component and a parent.

Question 9

Part commonality refers to the degree to which a component has more than one immediate parent.

Question 10

The portion of the master production schedule farthest into the future is often frozen to reduce forecasting requirements.

Question 11

A parent is any item manufactured from one or more components.

Question 12

Part commonality tends to increase inventory costs.

Question 13

A bill of materials (BOM)shows all of the components of an item,the parent-component relationships,usage quantities,and lot size derived from engineering and process designs.

Question 14

Available-to-promise inventory is the amount of end items that marketing can promise to customers by a certain date.

Question 15

A component is an item that may go through one or more operations to be transformed into or become part of one or more parents.

Question 16

The projected on-hand inventory in the MPS takes into account scheduled receipts,but not planned receipts.

Question 17

A bill of materials is a record of all the components of an item,the parent-component relationships,and the usage quantities derived from engineering and process designs.

Question 18

Material requirements planning (MRP)is a computerized information system developed specifically to aid in managing dependent demand inventory and scheduling replenishment orders.

Question 19

If the demand for an independent demand item is continuous and uniform,so will the planned order releases of its components.

Question 20

An intermediate item must have at least one parent and at least one component.

Question 21

The periodic order quantity (POQ)rule tends to keep more inventory on hand than the lot-for-lot rule,but less inventory on hand than the fixed order quantity rule.

Question 22

MRP can be used to best advantage under which one of the following circumstances?

A)when the item's demand depends only on customer demand
B)when the item's demand is uniform
C)when the item's demand is constant
D)when the item's demand depends on the production plans of its parent(s).

Question 23

The projected on-hand inventory in the MPS takes into account customer orders (booked)as well as the MPS quantities.

Question 24

The process with the least capacity is called a capacity constrained resource if its output is less than market demand.

Question 25

MRP II ties MRP to the company's financial system.

Question 26

For items manufactured in-house,one component of the planned lead time is waiting time.

Question 27

Which of the following is NOT an example of dependent demand items?

A)shoelaces,shoes
B)wheels,car
C)carafes,coffeemakers
D)ice skates,roller skates

Question 28

Which best defines the gross requirements for a component item?

A)the forecasted customer demand for the component
B)the amount of safety stock needed to buffer against uncertainties
C)the sum of gross requirements for all parents of the component
D)the total demand for the component derived from all immediate parents

Question 29

Lot-for-lot (L4L)is a rule that maintains the same order quantity each time an order is issued.

Question 30

The bill of resources (BOR)is a record of parent-component relationships and all the required materials,equipment time,staff,and other resources needed,including the usage quantities.

Question 31

A planned order release indicates when an order for a specified quantity of an item should be issued.

Question 32

Gross requirements are the total demand derived from all parent production plans.

Question 33

Available-to-promise (ATP)quantities are only shown in the first period (if the projected on-hand inventory is greater than zero in the first period),and subsequently in periods when the MPS quantity is greater than 0.

Question 34

Entering new information in the database of an ERP system is a(n):

A)data packet.
B)transaction.
C)record.
D)file.

Question 35

Which of the following statements about ERP systems is best?

A)Recent studies have shown that the most successful ERP implementations use standardized systems.
B)ERP systems written in XML require complete replacements of a company's legacy systems.
C)A company must adapt their ERP system to their existing processes in order for all employees to gain a benefit from the new system.
D)An ERP system requires a regular synchronization of all of the module databases,which is usually accomplished automatically when the business is not conducting business.

Question 36

A companywide process that cuts across traditional functional areas,business units,geographic regions,and product lines is a(n):

A)enterprise process.
B)master production scheduling process.
C)kinetic process.
D)full-business process.

Question 37

A front-office module for an ERP system includes:

A)manufacturing.
B)accounting and finance.
C)sales and marketing.
D)human resources.

Question 38

Which of the following is a back-office module in a typical ERP system?

A)customer service
B)sales
C)marketing
D)human resources

Question 39

Any item manufactured from one or more components is a(n):

A)parent.
B)component.
C)intermediate item.
D)purchased item.

Question 40

Planned receipts are estimates of the amount of inventory available each week after gross requirements have been satisfied.

Question 41

Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average inventory?

A)periodic order quantity (POQ),with P = 2
B)fixed order quantity (FOQ)
C)economic order quantity (EOQ)
D)lot for lot (L4L)

Question 42

Table 16.2
Use the information in partially completed Table 16.2.What is the available-to-promise (ATP)inventory in week 6?

A)0 units
B)35 units
C)45 units
D)80 units

Question 43

Table 16.2
Use the information in partially completed Table 16.2.What is the MPS start quantity in week 1?

A)0 units
B)20 units
C)40 units
D)80 units

Question 44

Which of the following statements about MRP is TRUE?

A)To be classified as a successful MRP user,a company must use either the L4L or POQ rules for lot sizing.
B)MRP gross requirements for a parent item are equal to the planned order releases of its components.
C)MRP logic is based on the logic of uniform,continuous demand,and item independence.
D)MRP gross requirements for a component depend on the planned order releases of its immediate parents.

Question 45

Table 16.1
Use the information in partially completed Table 16.1.What is the available-to-promise (ATP)inventory in week 1?

A)0 units
B)10 units
C)15 units
D)55 units

Question 46

Table 16.2
Use the information in partially completed Table 16.2.In which week does the second nonzero MPS quantity occur?

A)week 1 or 2
B)week 3 or 4
C)week 5 or 6
D)week 7 or 8

Question 47

If a planned receipt for an item is due in week 6 and the item's lead time is two weeks,in which week will the corresponding planned order release occur?

A)week 2
B)week 4
C)week 6
D)week 8

Question 48

Which statement on MRP explosion is best?

A)It calculates the total number of subassemblies,components,and raw materials needed for each parent item.
B)It calculates the total number of raw materials to be purchased from all suppliers.
C)It calculates the total number of parts to be produced for each parent item.
D)It calculates the total number of parts needed to be produced less the number of parts on hand for each parent item.

Question 49

Table 16.1
Use the information in partially completed Table 16.1.In which week does the second nonzero MPS quantity occur?

A)week 1
B)week 2 or 3
C)week 4 or 5
D)week 6,7,or 8

Question 50

Which one of the following statements about lot-sizing rules is TRUE?

A)The periodic order quantity (POQ)rule seeks to create inventory remnants.
B)If the POQ rule is used,an item's lot size can vary each time an order is placed.
C)The lot-for-lot (L4L)rule is a special case of the fixed-order quantity (FOQ)rule.
D)All lot-sizing rules seek to minimize inventory levels.

Question 51

Table 16.1
Use the information in partially completed Table 16.1.What is the projected on-hand inventory in week 6?

A)0 units
B)15 units
C)33 units
D)53 units

Question 52

Which one of the following is an input to the MRP system?

A)shop-floor schedules
B)financial reports
C)master production schedule
D)purchasing orders

Question 53

Table 16.1
Use the information in partially completed Table 16.1.What is the MPS start quantity in week 4?

A)0 units
B)20 units
C)30 units
D)60 units

Question 54

Which of the following statements about MRP II is best?

A)It is computationally faster than regular MRP.
B)It is limited only to aiding order-launching decisions.
C)It incorporates informal systems through the use of expert systems technology.
D)It provides more extensive information than MRP because it is tied to the company's financial system.

Question 55

Table 16.1
Use the information in partially completed Table 16.1.What is the available-to-promise (ATP)inventory in week 7?

A)0 units
B)33 units
C)40 units
D)60 units

Question 56

Which one of the following is a feature of MRP II,but not available in basic MRP systems?

A)financial projections
B)action notices
C)dispatch lists
D)capacity reporting

Question 57

Table 16.2
Use the information in partially completed Table 16.2.What is the projected on-hand inventory in week 5?

A)0 units
B)35 units
C)40 units
D)75 units

Question 58

Table 16.2
Use the following partially completed MRP record to answer the question. What are the quantities of planned order releases for item ABC for the first five weeks (weeks 1,2,3,4,and 5)?

A)30,0,60,0,145
B)60,0,145,0,0
C)0,30,60,0,0
D)30,0,60,145,0

Question 59

Table 16.2
Use the information in partially completed Table 16.2.What is the available-to-promise (ATP)inventory in week 1?

A)0 units
B)40 units
C)45 units
D)50 units

Question 60

Which of the following statements concerning MRP is TRUE?

A)Dependent-demand items tend to experience relatively constant demand rates.
B)MRP systems use independent demands for each component item.
C)Capacity requirements planning (CRP)uses open orders (scheduled receipts)and planned order releases to estimate capacity requirements for critical workstations.
D)The most accurate way to forecast dependent demand is to examine past usage rates.

Question 61

Table 16.6
Use the information from Table 16.6.If an L4L lot-sizing rule is used,how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged,because it has already been released and is being worked on. )

A)zero or one
B)two
C)three
D)more than three

Question 62

Table 16.5
Use the following MRP record to answer the question. Which one of the statements concerning item LMN is TRUE?

A)The scheduled receipt of 80 units in week 3 should be expedited so that it is finished in week 2.
B)The planned order release quantity in week 3 is 80 units.
C)The planned receipt quantity in week 6 is 30 units.
D)The projected on-hand inventory in week 8 is 70 units.

Question 63

Table 16.3
Use the information in partially completed Table 16.3.In which week will the second planned order release occur?

A)week 1
B)week 2
C)week 3
D)week 4,5,6,7,or 8

Question 64

Table 16.6
Use the information from Table 16.6.Which lot-sizing rule results in the highest projected on-hand inventory averaged over weeks 1 through week 10?

A)FOQ = 100
B)FOQ = 75
C)L4L
D)POQ,P = 3

Question 65

Table 16.3
Use the following MRP record to answer the question. What will be the projected on-hand inventory quantity in week 7?

A)fewer than or equal to 30 units
B)greater than 30 units but fewer than or equal to 60 units
C)greater than 60 units but fewer than or equal to 90 units
D)greater than 90 units

Question 66

Table 16.2
Use the following partially completed MRP record to answer the question. What is the planned order release quantity in week 4?

A)0 units
B)greater than 0 units but fewer than or equal to 50 units
C)greater than 50 units but fewer than or equal to 100 units
D)greater than 100 units

Question 67

Table 16.5
Use the information in Table 16.5.Which one of the statements concerning item RST is TRUE?

A)The first planned receipt occurs in week 5.
B)The planned order release in week 2 is for 100 units.
C)The planned receipt in week 7 is 80 units.
D)There are exactly two planned order releases needed for the first 8 weeks.

Question 68

Table 16.6
Use the information from Table 16.6.If an FOQ of 100 units is used,how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged,because it has already been released and is being worked on. )

A)zero or one
B)two
C)three
D)more than three

Question 69

Table 16.3
Use the following MRP record to answer the question. What are the quantity and the week of the first planned order release?

A)150 units;week 1
B)150 units;week 2
C)240 units;week 1
D)240 units: week 2

Question 70

Management wishes to use a POQ lot-sizing rule for an item that experiences an average demand of 30 units per week.If the desired average lot size is 120 units,what should P be?

A)zero or one weeks
B)two or three weeks
C)four or five weeks
D)more than five weeks

Question 71

Table 16.5
Use the information in Table 16.5.Which of the statements concerning item RST is TRUE? (Examine each answer independently. )

A)If the safety stock level were 30 units instead of 0 units,the planned receipt in week 7 would be 110 units.
B)If the scheduled receipt in week 2 must be delayed until week 3 because of a capacity shortage,there would be a planned order release in week 1.
C)If the safety stock level were 25 units instead of 0 units,there would be a planned order release in week 2.
D)If the gross requirements for week 8 were 100 units instead of 60 units,the projected on-hand inventory for week 8 would be 0 units.

Question 72

Table 16.4
Consider the following MPS,BOM,and inventory data.Blank MRP records are provided at the end of this exam.
Master Production Schedule: The following table shows the MPS start quantities. Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Use the information in Table 16.4.Which one of the following statements about item F is BEST?

A)The gross requirement in week 4 is 400 units.
B)Its first planned receipt is for 120 units in week 4.
C)Its 100-unit scheduled receipt in week 1 could be delayed to week 2 without delaying the planned order release for product B.
D)Its first planned order receipt is for 385 units in week 4.

Question 73

Table 16.4
Consider the following MPS,BOM,and inventory data.Blank MRP records are provided at the end of this exam.
Master Production Schedule: The following table shows the MPS start quantities. Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Use the information in Table 16.4.Which one of the following statements on item C is TRUE?

A)It has a scheduled receipt of 50 units in week 1.
B)Its gross requirement in week 6 is 100 units.
C)Its projected on-hand inventory is 0 units for week 1 through week 6.
D)Its first planned order release is for 100 units in week 4.

Question 74

Table 16.3
Use the following MRP record to answer the question. Which one of the following statements about item QRS is TRUE?

A)The first planned order release occurs in week 1.
B)The first planned receipt occurs in week 1.
C)The second planned order release quantity is 90 units.
D)The total planned order release quantity (summing up all eight weeks)is 190 units.

Question 75

Table 16.6
Use the information from Table 16.6.If an FOQ of 80 units is used,how many planned order releases are there for item XYZ?

A)zero or one
B)two
C)three
D)more than three

Question 76

Table 16.6
Use the information from Table 16.6.If a POQ lot-sizing rule is used,where P = 3,how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged,because it has already been released and is being worked on. )

A)zero or one
B)two
C)three
D)more than three

Question 77

Table 16.4
Consider the following MPS,BOM,and inventory data.Blank MRP records are provided at the end of this exam.
Master Production Schedule: The following table shows the MPS start quantities. Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Use the information in Table 16.4.Which one of the following statements about item C is BEST?

A)The 100-unit scheduled receipt of 200 units in week 1 can be delayed until week 2 without delaying item D's first planned order release.
B)Its second planned order release is for 200 units in week 6.
C)It has a planned receipt of 180 units in week 5.
D)An order for 60 units should be placed now (in week 1).

Question 78

Table 16.4
Consider the following MPS,BOM,and inventory data.Blank MRP records are provided at the end of this exam.
Master Production Schedule: The following table shows the MPS start quantities. Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Use the information in Table 16.4.Which one of the following statements about item E is TRUE?

A)There are no planned order releases in weeks 1 though week 6.
B)There is a planned receipt of 250 units in week 2.
C)There is one planned receipt for the next 6 weeks.
D)There is a planned order release of 250 units in week 3.

Question 79

Table 16.2
Use the following partially completed MRP record to answer the question. What are the quantities of planned order releases for item XYZ for the first six weeks (weeks 1,2,3,4,5,and 6)?

A)20,30,0,40,20,0
B)35,0,60,0,0,0
C)5,30,0,40,20,0
D)35,0,0,40,20,0

Question 80

Table 16.3
Use the information in Table 16.3.What is the planned order release in week 1?

A)40 units
B)180 units
C)220 units
D)240 units