385 Final ch 9
BOM file is also called which of the following
Product tree
A modular bill of materials is the term for an item that can be produced and stocked as a subassembly
TRUE
Lot for Lot is the most common lot sizing technique
TRUE
MRP = Material Requirements Planning
TRUE
MRP is MOST valuable where a number of products are made in batches using the same productive equipment
TRUE
MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item
TRUE
MRP provides the schedule specifying where each part and component of an end item should be ordered or produced
TRUE
The EOQ lot sizing technique uses the square root formula to balance set up costs and carrying costs
TRUE
The master production schedule states the number of items to be produced during specific time periods
TRUE
The three main inputs to an MRP system are the bill of materials, the master schedule and the inventory records file
TRUE
the time phased plan specifying how many and when the firm plans to build each end item is called the master production schedule
TRUE
MRP is based on dependent demand
TRUE dependent demand is caused by the demand for a higher-level item. Tires, wheels, and engines are dependent demand items based on the demand for cars
The deeper one looks into the product creation sequence, the more the requirements of demand items tend to become more lumpy
TRUE, the requirements of dependent demand items become more and more lumpy as we go farther down the product creation sequence
A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations
TRUE- Lot for Lot is most common technique. It -sets planned orders to exactly match the net requirements -produces exactly whats needed each week with none carried over into future periods -minimizes carrying costs -does not take into account setup costs or capacity limitations
When implemented correctly, MRP links all areas of business
TRUE- MRP is the key piece of logic that ties the production functions together from a material planning and control view.
In a Net change MRP system requirements and schedules are updated whenever a transaction is processed that has an impact on the item.
TRUE- Net change MRP systems are activity driven and requirements and schedules are updates whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in real time the exact status of each item managed by the system
Net change MRP reflects the exact status of each item managed by the system in "real time"
TRUE- activity driven
Manufacturing firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product
TRUE- contains the complete product description, listing not only the materials, parts, and components, but also the sequence in which the product is created
A master production schedule is an input to a material requirements planning (MRP) system
TRUE- generally the master production schedule deals with end items and is a major input to the MRP process
Time fences are periods of time having some specified level of opportunity for the customer to make changes
TRUE- management defines time fences as having some specified level of opportunity for the customer to make changes
Net change MRP systems are "activity" driven
TRUE- net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in real time the exact statue of each item managed by the system
Projected available balance is the amount of inventory that is expected as of the beginning of a period
TRUE- projected available balance is the amount of inventory that is expected as of the end of a period (or the beginning of the next period)
A BOM file is often called a product structure file or product tree because it shows how a product is put together
TRUE- the BOM file is often called the product structure file or product tree because it shows how a product is put together
The least total cost method lot sizing technique calculates the order quantity by comparing the carrying cost and setup or ordering cost for various lot sizes and then selects the lot in which these are most nearly equal
TRUE- the least total cost method (LTC) is a dynamic lot sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal
The least unit cost method of lot sizing technique adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost
TRUE- the least unit cost method is a dynamic lot sizing technique that adds ordering and inventory carrying costs for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost
Computing the quantity of each component that goes into a finished product can be done by expanding or exploding each item in a product structure tile and summing at all levels
TRUE- to compute the amount of each item needed at the lower levels, each item would need to be expanded and summed. A more efficient procedure is to store parts data in simple, single level lists. That is, each item and component is listed showing only its parent and the number of units needed per unit of its parent
An input to the MRP system is an inventory records file
True- master schedule, BOM file, and inventory records file
which of the following is not a lot sizing technique used in MRP system
Warehouse loading factor
name for demand caused by the demand for a higher level item
dependent demand
Which of the following is considered a secondary report in an MRP system
exceptions reports
Which of the following is an input to the master production schedule
forecasts of random demand from customers none of the above
In MRP how is demand information for a level zero item derived
from the Master production scheduling process
A product tree can do which of the following
help to compute component usage
What does it mean when a super bill of materials specifies half of a component part in an assembly
it means that 50% of the units assembled will not include that part
Which of the following is a dynamic lot sizing technique that calculates the order quantity by comparing the carrying cost and the setup or ordering costs for various lot sizes and then selects the lot in which these are most nearly equal
least total cost
which of the following can be used for lot sizing in an MRP system
least unit cost
which of the following is a dynamic lot sizing technique that adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit
least unit cost
demand for an item located in level 3 of a product structure tree depends on demand for an item in the next higher level. what is that level
level 2
In a typical inventory status record, which of the following would you not expect to see
lost items
The time phased plan specifying how many and when the firm plans to build each end item is called
master production schedule
Under the lot for lot sizing technique, we would expect which of the following
minimize carrying costs
Which of the following files allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand
peg record file
which of the following is considered a primary report in an MRP system
planned order schedules
We would expect to see which of the following in an MRP systems inventory status file
scrap parts
Which of the following is most closely related to the reason a firm might implement MRP
so they can order the right parts
If annual demand is 6125 units, holding cost is $5 per unit, and setup cost per order is $50, which of the following is the EOQ lot size
square root of (2x6125x50/5) = 350
If annual demand is 1000, annual holding cost is .5 and cost per order is 10, what is EOQ
square root of 2x1000x10/.5 = 200
name for a bill of materials that includes items with fractional options
super bill of materials
Which of the following is an input to the MPS master production schedule
the aggregate plan
In an MRP program, the program accesses the status segment of an inventory record according to specific periods called which of the following
time buckets
what are periods of time having some specified level of opportunity for the customer to make changes called
time fences
Which of the following is one of the main purposes of MRP
to determine the amount of materials needed to produce each end item
Which of the following is the net requirement using an MRP program if the gross requirement is 1000 and the inventory on hand is 500
1000-500=500
Which of the following is the net requirement using an MRP program if the gross requirement is 1250 and the inventory on hand is 50?
1250-50=1200
What is the planned order release using an MRP program if the gross requirement is 1600 and inventory is 600
1600-600=1000
Which of the following is the planned-order release using an MRP program if the gross requirement is 5000, inventory on hand is 1200, and planned receipts are 800
5000-1200-800=3000
Which of the following is the planned order release using an MRP program if the gross requirement is 670 and the inventory on hand is 600
670-600=70
Which of the following industry types have high expected benefits from the application of MRP
Assemble to stock Assemble to order
What are the three main inputs to MRP
BOM, master schedule, and inventory records file
Which of the following is an input file necessary to run an MRP system
Bill of Material BOM Inventory records file
Which of the following is not a production activity report generated by MRP
Bill of materials report
MRP systems seek to achieve which of the following
Determine the number of dependent demand items needed
One of the main purposes of a MRP system is which of the following
Develop schedules specifying when each component should be ordered to produced
In a net change MRP system requirements and schedules are considered rigid and never updated
FALSE
An output of the MRP is a bill of materials file
FALSE- BOM is an input
The economic order quantity (EOQ) lot sizing technique produces or acquires exactly the amount of product that is needed each time period with none carried over into future periods
FALSE- EOQ assumes that parts are used continuously during the period. The lot sizes generated by EOQ do not always cover the entire number of periods. For example, the EOQ might provide the requirements for 4.6 periods (when another EOQ would be needed)
The Economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set up costs, carrying cost, and cost of stock outs
FALSE- EOQ balances setup and holding costs
In a net change MRP program, a change in one item will result in a completely new inventory plan and schedule for every item in the master production schedule
FALSE- Net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on them. Net change enables the system to reflect in real time the exact status of each item managed by the system
A modular bill of materials includes items with fractional options
FALSE- a Super bill of materials includes items with fractional options
Generally, determining lot sizes in MRP systems is simple
FALSE- determining lot sizes in an MRP system is a complicated and difficult problem
the Lot-4-lot lot sizing technique minimizes carrying cost by taking into account setup costs and capacity limitations
FALSE- lot for lot is most common technique -sets planned orders to exactly match net requirements -produces exactly what is needed each week with none carried over into future periods -minimizes carrying cost -does not take into account setup costs or capacity limitations
Low level coding in MRP indicates the exact status of each item managed by the system in real time
FALSE- low level coding is where each item is placed at the lowest level at which it appears in the structure hierarchy
The time phased plan specifying how many and when the firm plans to build each end item is called the MRP
FALSE- master production schedule
Projected available balance is a term referring to unsold finished goods inventory
FALSE- projected available balance is the amount of inventory (not unsold finished goods) that is expected at the end of a period
An input to the MRP system is an exception report
FALSE- the BOM file is one of the three main inputs to the MRP program. the other two are the master schedule and the inventory records file
The MRP Program performs its analysis from the bottom up of the product structure trees, imploding requirements level by level
FALSE- the MRP program performs its analysis from the top down
Which of the following industry types will not benefit greatly from the application of MRP
Fabricate to order
