Deck 13: Material Requirements Planning Mrp and Erp

Question 1

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

Answer 1

True

Question 2

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 forecasted.
C) the need for dependent-demand items is calculated.
D) All of these are true.
E) None of these is true.

Answer 2

D

Question 3

Planning bills of material are bills of material for "kits" of expensive items such as CPUs and motherboards.

Answer 3

False

Question 4

________ is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders.

Question 5

Which of the following is NOT one of the four key tasks that Wheeled Coach insists are necessary for successful MRP implementation?

A) The material plan must meet both schedule requirements and facility capabilities.
B) The plan must be executed as designed.
C) Inventory investment must be minimized.
D) Excellent record integrity must be maintained.
E) The process must adhere to stringent quality control standards.

Question 6

________ is a dependent demand technique that uses a bill of material, inventory, expected receipts, and a master production schedule to determine material requirements.

Question 7

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 allows the company to meet tight schedules but causes 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 8

Wheeled Coach uses ________ as the catalyst for low inventory, high quality, tight schedules, and accurate records.

Question 9

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) it is a component of a clearly identifiable parent.
E) the item has several children.

Question 10

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

Question 11

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

Question 12

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

Question 13

What is MRP? Identify four benefits from its use.

Question 14

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

Question 15

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

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

Question 16

Because MRP provides such a clean structure for dependent demand, it has evolved as the basis for ________.

Question 17

Lead times, inventory availability, and bills of material are among the five things operations managers must know for effective use of dependent inventory models.

Question 18

Describe the role of record accuracy in Wheeled Coach's successful use of MRP.

Question 19

MRP is generally applicable to items with independent demand.

Question 20

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

Question 21

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

A) planning bills
B) modular bills
C) phantom bills
D) overdue bills
E) gross requirements bills

Question 22

Bills of material organized by major subassemblies or by product options are called ________.

Question 23

By convention, the top level in a product structure is designated level 0.

Question 24

Consider the following product structure. If the demand for product A is 50 units, how many units of component G will be needed?

A) 4
B) 50
C) 100
D) 150
E) 300

Question 25

If the explosion of the bill of material tells MRP how much of each part is needed, how does MRP learn when each of these parts is needed?

Question 26

Low-level coding means that:

A) a final item has only a few levels in the BOM structure.
B) the code being used 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) the lowest-paid staff member in the production department performs the coding.

Question 27

Consider the following product structure. Thirty units of Product A are needed. How many units of B, C, D, E, and F are needed?

Question 28

A(n) ________ is a bill of material for components, usually subassemblies, that exist only temporarily; they are never inventoried.

Question 29

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 30

What information is necessary for an operations manager to make effective use of a dependent inventory demand model?

Question 31

Consider the following product structure. If the demand for product A is 50 units, how many units of component D will be needed?

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

Question 32

By convention, what is the top level in a product structure?

A) level 0
B) level 1
C) level T
D) level 10
E) level 100

Question 33

The minimum record accuracy required for successful MRP is approximately which of the following?

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

Question 34

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 35

Consider the following product structure. Fifteen units of Product A are needed. How many units of B, C, D, and E are needed?

Question 36

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

A) phantom bill
B) component bill
C) modular bill
D) low-level bill
E) planning bill

Question 37

Which of the following statements is TRUE regarding the master production schedule?

A) It specifies what is to be made and how.
B) The schedule is independent of the aggregate plan.
C) It disaggregates the aggregate plan.
D) The master production schedule sets the upper and lower bounds on the aggregate plan.
E) It specifies the work-shift schedule for the assembly line workers.

Question 38

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors, then the bills of material are classified as which of the following?

A) phantom
B) planning
C) modular
D) low-level
E) A and B

Question 39

A(n) ________ is a list of quantities of components, ingredients, and materials required to make a product.

Question 40

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 41

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

Question 42

An order for 110 units of Product M has been placed. There are currently 30 units of Product M on hand. Each M requires 4 units of Component N. There are 50 units of N on hand. What are the net requirements for N?

A) 150
B) 270
C) 300
D) 320
E) 440

Question 43

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 these are true.

Question 44

Fourteen A washers, five B washers, three C washers, two D bolts, and eight E bolts are required to make one grill parts kit. If 100 grill parts kits are needed, how many more washers will be consumed than bolts?

Question 45

A manufacturing company is trying to determine the cost of materials used to produce an A. If Ds cost $3 and Fs cost $5, how much does it cost to produce an A (in D and F materials only)?

Question 46

Consider the following product structure. Forty units of Product A are needed. How many units of B, C, D, E, F, and G are needed?

Question 47

An order for 50 units of Product A and 60 of B has been placed. There are currently 25 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available. What are the net requirements for C?

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

Question 48

A material requirements planning system generates output reports such as bill of material, inventory and purchase records, and lead times for each item.

Question 49

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 50

________ are the result of adjusting gross requirements for inventory on hand and scheduled receipts.

Question 51

Explain the difference between a gross requirements plan and a net requirements plan.

Question 52

Each R requires 3 of component S and 3 of material A; 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 material A is 1 week. The lead time for the procurement of T is 4 weeks. Construct the time-phased product structure.

Question 53

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) planned order releases.
D) projected on hand.
E) the amount necessary to cover a shortage.

Question 54

It is week 1 and there are currently 20 As in stock. We need 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 2 weeks, when and how large of an order should be placed to meet the requirement of 300 As?

A) Week 1, 300 As
B) Week 3, 40 As
C) Week 5, 40 As
D) Week 4, 40 As
E) Week 4, 300 As

Question 55

Each X requires 2 of component Y and 1 of part W. Each Y requires 10 of Z. Each W requires 3 of Q and 2 of R. Lead times are X = 1 week, Y = 1 week, W = 2 weeks, R = 1 week, Z = 3 weeks, and Q = 3 weeks. Construct the time-phased product structure.

Question 56

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 57

Construct a product structure tree for a movie purchased in DVD format. Assume that it contains a single DVD disk. Don't be concerned with artwork-you may use labeled boxes for your parts and assemblies.

Question 58

An order for 100 units of Product A has been placed. There are currently 60 units of Product A on hand. Each A requires 4 units of Part B. There are 20 units of B available. What are the net requirements for B?

A) 20
B) 160
C) 180
D) 380
E) 140

Question 59

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 60

Consider the following product structure. If the demand for product A is 40 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) 100

Question 61

Product A is made from 2 Bs and 1 C. Lead times for A, B, and C are 2, 1, and 2 weeks respectively. Currently there are 2 Bs and 5 Cs on hand, with 5 of each scheduled to arrive at the end of week 1. If 20 As are needed during week 3, can the order be completed (it is the start of week 0 currently)?

Question 62

When safety stock is deemed absolutely necessary, the usual policy is to build it into (increase) the inventory requirements within the MRP logic.

Question 63

Product A is made from 2 Bs and 1 C. Lead times for A, B, and C are 2, 1, and 2 weeks respectively. Currently there are 2 Bs and 5 Cs on hand, with 5 of each scheduled to arrive at the end of week 1. If 20 As are needed during week 5, can the order be completed (it is the start of week 0 currently)?

Question 64

________ are the time units in a material requirements planning (MRP) system.

Question 65

Which of the following is NOT one of the five components of DDMRP?

A) Strategically Position Safety Stock
B) Establish Safety Stock Levels
C) Monitor Safety Stock Levels
D) Track and Adjust to Supply Changes
E) Execute Collaboratively Internally and Externally

Question 66

What is the process of tracing upward in the bill of material from the component to the parent item in order to determine the cause for the component requirement?

A) net requirements planning
B) time fencing
C) pegging
D) backtracking
E) leveling

Question 67

In MRP, system nervousness is caused by:

A) management's attempt to continually respond to minor changes in production requirements.
B) the use of the lot-for-lot approach.
C) management's marking part of the master production schedule as "not to be rescheduled."
D) the use of phantom bills of material.
E) management's attempt to evaluate alternative plans before making a decision.

Question 68

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 69

An order for 150 units of Product M has been made. There are currently 30 units of Product M on hand. Each M requires 8 units of Component N. There are 200 units of N on hand.
(a) Calculate the net requirements for M.
(b) Calculate the gross requirements for N.
(c) Calculate the net requirements for N.

Question 70

Consider the product structure shown below.
(a) Assuming 1 A is to be made, how many units of each of the other items would need to be made?
(b) If there are 20 of every item except A in on-hand inventory, how many As can be assembled?

Question 71

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

Question 72

An order for 110 units of Product A has been made. There are currently 60 units of Product A on hand. Each A requires 2 units of Part B. There are 30 units of B available.
(a) Calculate the net requirements for A.
(b) Calculate the gross requirements for B.
(c) Calculate the net requirements for B.

Question 73

What is one of the tools that is particularly useful in reducing system nervousness in an MRP system?

A) modular bills
B) time phasing
C) time fences
D) lot sizing
E) closed loop system

Question 74

Distortion in MRP systems can be minimized when safety stock is held at the:

A) purchased component or raw material level.
B) work-in-process level.
C) finished goods level.
D) A and B
E) A and C

Question 75

The large parts of a playground A-frame (from which to hang a swing or glider) consist of a ridge pole, four legs, and two side braces. Each leg fastens to the ridge with one fastener set. Each side brace requires two fastener sets for attachment to the legs.
There is one order outstanding, to make 180 frame kits. There are 500 legs and 20 ridge poles in inventory. There are no other large items in inventory, and no scheduled receipts.
(a) Draw the product structure tree.
(b) Calculate the net requirements to fulfill the outstanding order.

Question 76

________ are a way of allowing a segment of the master schedule to be designated as "not to be rescheduled."

Question 77

An order has been placed for 50 units of Product A and 60 units of Product B. There are currently 35 units of Product B on hand. Each A requires 2 units of Part C; each B requires 5 units of C. There are 160 units of C available.
(a) Calculate the net requirements for B.
(b) Calculate the gross requirements for C.
(c) Calculate the net requirements for C.

Question 78

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

Question 79

Time fences divide the segment of the master schedule that can be revised from the section that is "not to be rescheduled."

Question 80

What strategically alters lead times and precisely places safety stock within the BOM structure to improve MRP performance?

A) demand-driven MRP
B) supply-driven MRP
C) service-driven MRP
D) resource-driven MRP
E) constraint-driven MRP