DEMAND PLANNING
48) Which of the following best describes the Master Production Schedule? A) It is the actual build schedule for manufacturing. B) It is the final assembly schedule. C) It is driven by materials requirements planning. D) It is the planned build schedule for manufacturing.
The correct answer is: D The Master Production Schedule is the planned build schedule for manufacturing. A final assembly schedule is generally separate from the MPS and the actual build schedule may vary from what was planned.
75) A forecast which is exhibiting a trend will have which of the following patterns? A) A steady increase or decrease B) A consistent fluctuating pattern based on the time of year C) An inconsistent fluctuation in demand D) A wavelike fluctuation over several years
The correct answer is: A A forecast trend displays a steady increase or decrease year to year.
62) Planning bills can be best described as: A) grouping like items together for planning. B) products which the factory plans to build. C) indented bill of materials. D) phantom bill of materials.
The correct answer is: A A planning bill is an artificial grouping of components for planning purposes. They are used to simplify planning, forecasting, master production scheduling, and material requirements planning. They do not represent products which are buildable.
63) The portion of a company's inventory and planned production which is not already committed is: A) inventory allocation. B) inventory commitment. C) available to promise. D) multi-plant planning.
The correct answer is: C Available-to-promise is the portion of inventory and planned production not already committed to orders. It allows accurate delivery promises to be made to the customer.
11) Which of the following would best define dependent demand? I. Demand which is dependent on the forecast II. Demand which is dependent on demand for a higher level assembly III. Demand which is calculated A) I B) I and II C) II and III D) III
The correct answer is: C Dependent demand is calculated based on demand for higher level assemblies. Forecasted demand is independent.
35) Which of the following would best define dependent demand? I. Demand which is dependent on the forecast II. Demand which is dependent on demand for a higher level assembly III. Demand which is calculated A) I B) I and II C) II and III D) III
The correct answer is: C Dependent demand is calculated based on demand for higher level assemblies. Forecasted demand is independent.
66) The term value can be best defined as: A) total revenue of products and services. B) total inventory available for shipment. C) amount buyers are willing to pay for a product or service. D) gross margin on a product or service.
The correct answer is: C Value is defined as the amount buyers are willing to pay for a product or service. Total revenue would be the measure of the value.
15) Which of the following would be included in demand management? I. Forecasted requirements II. Service parts requirements III. Branch warehouse requirements IV. Inter-plant orders A) I, II, and III B) II, III, and IV C) I, III, and IV D) I, II, III, and IV
The correct answer is: D All of the answers would be part of demand management, plus order entry and order promising.
69) Which of the following would NOT be considered a source of demand? A) Customer orders B) Interplant orders between facilities C) Forecasts D) Goods due in from a supplier
The correct answer is: D Goods from suppliers would be included as a supply. Demand must incorporate all sources of the demand whether they are forecasts, customer orders, dependent demand, spare parts orders, etc. Only by aggregating all the demands for a part can planning properly occur.
59) In order for a forecast to signal negative bias, the tracking signal would be: A) less than one. B) more than one. C) equal to one. D) equal to zero.
The correct answer is: A A tracking signal measures the algebraic deviations of the actual demand to the forecast. It then divides those deviations by the MAD. If the deviations divided by the MAD are greater than one, then the forecast exhibits positive bias; less than one, the forecast exhibits negative bias. Most companies will only adjust the forecast when the tracking signal reaches an arbitrary target, such as +/- 4.
20) Which of the following best describes the term bias? A) Actual demand consistently varies from forecast; either above or below. B) The standard deviation is consistently positive. C) The mean absolute deviation equals the forecast error. D) The sum of the errors is less than the MAD.
The correct answer is: A Bias occurs when actual demand varies consistently higher or lower than the forecast. When bias occurs in the forecast, the forecast must be adjusted.
44) Which of the following best describes the term bias? A) Actual demand consistently varies from forecast; either above or below. B) The standard deviation is consistently positive. C) The mean absolute deviation equals the forecast error. D) The sum of the errors is less than the MAD.
The correct answer is: A Bias occurs when actual demand varies consistently higher or lower than the forecast. When bias occurs in the forecast, the forecast must be adjusted.
32) Final assembly scheduling usually occurs when: A) a customer order is received. B) planning a build schedule. C) the MPS is established. D) capacity is constrained.
The correct answer is: A Final assembly scheduling occurs only after the customer order is received. The FAS is the actual build schedule which ensures that the customers get what they want. Generally, FAS occurs when there are a variety of options for the customer to order.
8) Final assembly scheduling usually occurs when: A) a customer order is received. B) planning a build schedule. C) the MPS is established. D) capacity is constrained.
The correct answer is: A Final assembly scheduling occurs only after the customer order is received. The FAS is the actual build schedule which ensures that the customers get what they want. Generally, FAS occurs when there are a variety of options for the customer to order.
14)A firm planned order is used to: A) freeze the planned order against changes in quantity and time. B) convert the planned order to a scheduled receipt. C) simulate the projected inventory balance. D) manipulate the data and quantity of the customer order.
The correct answer is: A Firm planned orders are used by planners when it is necessary to "freeze" the planned order. This might be necessary due to material shortages or capacity problems, e.g., strikes.
38) A firm planned order is used to: A) freeze the planned order against changes in quantity and time. B) convert the planned order to a scheduled receipt. C) simulate the projected inventory balance. D) manipulate the data and quantity of the customer order.
The correct answer is: A Firm planned orders are used by planners when it is necessary to "freeze" the planned order. This might be necessary due to material shortages or capacity problems, e.g., strikes.
72) The attributes of the product or service that cause a customer to buy from a company are called the: A) order winners. B) order qualifiers. C) buyers criteria. D) order modifiers.
The correct answer is: A Order winners are the characteristics that cause a customer to purchase from a supplier. These characteristics can vary widely but will generally include delivery speed, delivery reliability, quality, design superiority, education of the employees, customer importance, service, etc.
67) The term, Value Chain, refers to the: A) total value generated by a company's activities. B) total revenue for all the products and services. C) supplier network for providing goods and services. D) margin associated with the activities.
The correct answer is: A The Value Chain refers to the total value generated by a company. It is comprised of value activities and margin. Value activities can be broken into two types; primary and support. Primary activities are those concerned with the physical creation of the product or service which a company sells. Support activities are those which help brace the primary activities such as technology, human resources, accounting, etc.
50) Which of the following are steps in developing a Master Production Schedule? I. Develop a preliminary MPS II. Check the schedule against the capacity available III. Check MPS against the production plan to ensure they are equal A) I and II B) I and III C) II and III D) I, II, and III
The correct answer is: A The three steps in developing a Master Production Schedule are: 1. Develop a preliminary MPS. 2. Check the preliminary MPS against available capacity. 3. Resolve differences between the preliminary MPS and capacity available.
21) A tracking signal is used to: A) monitor the quality of the forecast. B) determine the variation in the production plan. C) measure whether the schedule is being met. D) measure the material plan.
The correct answer is: A Tracking signals are used to measure the quality of the forecast to determine whether to adjust the forecast. They usually measure the sum of the errors against a deviation measure such as MAD.
45) A tracking signal is used to: A) monitor the quality of the forecast. B) determine the variation in the production plan. C) measure whether the schedule is being met. D) measure the material plan.
The correct answer is: A Tracking signals are used to measure the quality of the forecast to determine whether to adjust the forecast. They usually measure the sum of the errors against a deviation measure such as MAD.
65) A bill of materials contains: I. Components used to make a product II. Labor needed to build the product III. Assemblies at various stages of production IV. Safety stock by item A) I and II B) I and III C) II and III D) III and IV
The correct answer is: B A bill of materials contains all of the components used in the manufacture of end items. In addition, the subassemblies at various stages of manufacture are described. Labor is defined in the routing, generally in standard hours, and safety stock is not generally maintained on the bill of materials.
23) Demand on a work center is caused by the next work center. Product is not made unless signaled by the next work center. This is called: A) push system. B) pull system. C) demand system. D) MRPII system.
The correct answer is: B A pull system starts with demand from a customer and signals each preceding operation. Work is not done on a product unless a signal for demand is generated, thus "pulling" a product through the manufacturing process.
47) Demand on a work center is caused by the next work center. Product is not made unless signaled by the next work center. This is called: A) push system. B) pull system. C) demand system. D) MRPII system.
The correct answer is: B A pull system starts with demand from a customer and signals each preceding operation. Work is not done on a product unless a signal for demand is generated, thus "pulling" a product through the manufacturing process.
16) All of the following are principles of forecasting except: A) Forecasts are usually wrong B) Forecasts are more accurate for end items C) Forecasts should include an estimate of error D) Forecasts are more accurate in the near term
The correct answer is: B Forecasts are more accurate for product families or groups. The reason is that aggregate numbers tend to be more accurate than detailed numbers. So although the sales forecast error may be very small in a company, predicting the shipments of an end item will have more error associated with it.
40) All of the following are principles of forecasting except: A) Forecasts are usually wrong B) Forecasts are more accurate for end items C) Forecasts should include an estimate of error D) Forecasts are more accurate in the near term
The correct answer is: B Forecasts are more accurate for product families or groups. The reason is that aggregate numbers tend to be more accurate than detailed numbers. So although the sales forecast error may be very small in a company, predicting the shipments of an end item will have more error associated with it.
61) In which of the following manufacturing environments are forward scheduling and finite loading best suited for providing customer promise dates? A) Make-to-stock B) Make-to-order C) Assemble-to-order D) Configure-to-order
The correct answer is: B Forward scheduling assumes that materials are not ordered and operations are not scheduled until the customer order is received, regardless of the due date. In a make-to-order environment, work does not begin until the order is received from the customer. The order is then scheduled forward from the order date and considers the load on the finite capacity of each work center through which the order must move.
76) A forecast analyst has just extracted the recent actual sales history and, in reviewing the data, notices several outliers. The analyst should most likely: A) rerun the data to ensure there were no errors in the extract. B) rerun the data but remove the outliers. C) ignore the outliers and use the forecasts as is. D) refer to the tracking signal.
The correct answer is: B Outliers are data that are outside the general data points of the actual data. These outliers occur due to the random events of business. Sometimes they are caused by the actions of the business such as promotions, bonus timing, etc. Generally speaking, outliers should be removed from the data as they are apt to skew the forecast causing demand projection which are less than accurate. There are times when the outliers are left in the data because it results in very little inaccuracy.
28) You are working as a Master Scheduler in a discrete manufacturing company. A large customer has asked if you can deliver an order, but you have some short term capacity constraints. Which of the following actions could be taken so the order can be delivered? I. People could be hired II. Overtime could be worked III. Inventory could be built in slow times IV. Work could be subcontracted A) I, II, and III B) II, III, and IV C) I, III, and IV D) I, II, and IV
The correct answer is: B Short term capacity can be increased by overtime, inventory, or subcontracting. Often, hiring qualified people takes much longer than the other three options.
4) You are working as a Master Scheduler in a discrete manufacturing company. A large customer has asked if you can deliver an order, but you have some short term capacity constraints. Which of the following actions could be taken so the order can be delivered? I. People could be hired II. Overtime could be worked III. Inventory could be built in slow times IV. Work could be subcontracted A) I, II, and III B) II, III, and IV C) I, III, and IV D) I, II, and IV
The correct answer is: B Short term capacity can be increased by overtime, inventory, or subcontracting. Often, hiring qualified people takes much longer than the other three options.
2) Which of the following statements is most correct? A) The MPS shows families of products. B) The MPS has more detail than the production plan. C) The production plan has more detail than the MPS. D) The production plan rolls up to equal the MPS.
The correct answer is: B The MPS is a weekly build plan that contains more detail than the production plan. However, the MPS should add up to equal the production plan.
26) Which of the following statements is most correct? A) The MPS shows families of products. B) The MPS has more detail than the production plan. C) The production plan has more detail than the MPS. D) The production plan rolls up to equal the MPS.
The correct answer is: B The MPS is a weekly build plan that contains more detail than the production plan. However, the MPS should add up to equal the production plan.
29) Which of the following are strategies to use in developing a production plan? I. Chase strategy II. Delphi strategy III. Level strategy IV. Backlog strategy A) I and II B) I and III C) II and IV D) III and IV
The correct answer is: B The chase strategy means production will vary with demand (inventory stays level). The level strategy establishes production at the average demand. Fluctuations in demand are absorbed by inventory. The third strategy is subcontracting. Production is kept at the minimum demand level. Variations in the demand level are absorbed by subcontracting production.
5) Which of the following are strategies to use in developing a production plan? I. Chase strategy II. Delphi strategy III. Level strategy IV. Backlog strategy A) I and II B) I and III C) II and IV D) III and IV
The correct answer is: B The chase strategy means production will vary with demand (inventory stays level). The level strategy establishes production at the average demand. Fluctuations in demand are absorbed by inventory. The third strategy is subcontracting. Production is kept at the minimum demand level. Variations in the demand level are absorbed by subcontracting production.
54) Based on the following data, what should the monthly production be to level production? Beginning inventory = 500 units Ending inventory = 200 units Sales forecast Month 1 2 3 4 5 Quantity 400 300 400 400 300 A) 250 B) 300 C) 350 D) 400
The correct answer is: B The company has a beginning inventory of 500 units and will be decreasing the inventory by 300 units over the 5 periods. During the 5 periods, they will be selling 1800 units. Therefore, the company will need to produce 1800-300 or 1500 units over 5 periods which equals 300 per period.
30) Which of the following are inputs to a realistic MPS? I. Production plan II. Forecasts for end items III. Product costs for end items IV. Capacity constraints A) I, II, and III B) I, II, and IV C) II, III, and IV D) I, III, and IV
The correct answer is: B The production plan, forecasts, and capacity constraints are all inputs to the MPS. While costs are nice to have, they are not a necessary input.
6) Which of the following are inputs to a realistic MPS? I. Production plan II. Forecasts for end items III. Product costs for end items IV. Capacity constraints A) I, II, and III B) I, II, and IV C) II, III, and IV D) I, III, and IV
The correct answer is: B The production plan, forecasts, and capacity constraints are all inputs to the MPS. While costs are nice to have, they are not a necessary input.
19) The annual demand for a product is 1200 but during July, the product sells 150 units. What is the seasonal index for the product in July? A) 1.0 B) 1.5 C) 1.75 D) 2.00
The correct answer is: B The seasonal index is calculated by dividing the period average demand by the average demand for all periods. For this problem: The seasonal index equals 150 units/100 units or 1.5; where 100 units is the average demand for all periods (1200 units/12 months).
43) The annual demand for a product is 1200 but during July, the product sells 150 units. What is the seasonal index for the product in July? A) 1.0 B) 1.5 C) 1.75 D) 2.00
The correct answer is: B The seasonal index is calculated by dividing the period average demand by the average demand for all periods. For this problem: The seasonal index equals 150 units/100 units or 1.5; where 100 units is the average demand for all periods (1200 units/12 months).
51) Over the past three months, the demand for a product has been 240, 260, and 280. Calculate the three month moving average forecast for month four. A) 240 B) 260 C) 280 D) 300
The correct answer is: B The three month moving average is calculated by adding the demand for the three months (240+260+280 = 780) and dividing by the number of data (3). Therefore: 780/3 = 260. This would be used as the forecast for the fourth month.
64) The primary reason for a time fence is to: A) determine how to use the forecast. B) manage schedule changes most effectively. C) provide a stable schedule for the suppliers. D) maintain a steady shipment schedule.
The correct answer is: B Time fences are mainly used to manage the changes that invariably occur in the master schedule. The frozen zone usually can be changed only with senior management approval due to the high cost of changes. The liquid zone can routinely have changes made because resources have not been committed. The slushy zone usually requires negotiated trade-offs between marketing and manufacturing. If capacity is available, then changes can usually be made.
70) A responsive company will incorporate the customers' desires for product improvements into their goods and services. The ability to do this effectively is described as listening to the "voice of the customer." The phrase "voice of the customer" can be best described as: A) conducting focus groups with potential customers to see what features are best. B) obtaining actual customer descriptions in word for the features and functions they desire. C) getting feedback to a survey on the company website. D) sending out surveys to all important customers regarding the goods and services.
The correct answer is: B The Voice of the Customer is a process for helping customers define their desires for the features and functions of a supplier's goods and services. It involves defining their desires and translating those desires into actual product and service designs. This is done through a series of meetings and cross communication.
71) Which of the following is the primary benefit of a customer partnership? A) Higher prices can be charged because the customer is not buying from other sources B) Reduced paperwork between the two parties C) Lower costs in the supply chain for both companies because of the mutual sharing of information D) Higher margins for the supplier
The correct answer is: C A customer partnership (similar to a supplier partnership) will have an overall effect of lowering costs in the supply chain for both partners. These savings can be shared by the companies. The costs are lowered because the partners share information collaboratively. Information on new designs, forecasts, customer orders, consigned inventory, shared contracts, etc. all contribute to the lower costs.
27) A closed loop MRP system can be best defined as: A) action taken by a planner to approve planned orders. B) re-planning of capacity to accommodate restraints. C) integrated planning and control system with feedback from the bottom-up. D) integrated systems which include financial software, finite capacity, and logistics.
The correct answer is: C Closed loop MRP systems operate from the top down with feedback throughout the system. These feedback mechanisms allow changes to occur in the top level planning.
3) A closed loop MRP system can be best defined as: A) action taken by a planner to approve planned orders. B) re-planning of capacity to accommodate restraints. C) integrated planning and control system with feedback from the bottom-up. D) integrated systems which include financial software, finite capacity, and logistics.
The correct answer is: C Closed loop MRP systems operate from the top down with feedback throughout the system. These feedback mechanisms allow changes to occur in the top level planning.
77) A collaborative forecast is best described as: A) one where the seasonal demand is dampened by the trend. B) a forecast where the tracking signal is equal to one. C) a forecast where the customer and the supplying firm have reached a consensus about the forecast. D) a forecast which has a MAD of 2.06 or less.
The correct answer is: C Collaborative forecasting allows the customer and supplier to communicate and adjust the forecast based on the data of both firms. This is usually completed with both firms communicating directly in a formal process leading to an agreed upon forecast.
10) Independent demand can be defined by all of the following except: A) Demand not related to demand from higher level assemblies B) Forecasted demand C) Demand calculated based on present demand D) Demand from customer orders
The correct answer is: C Demand calculated from present demand would be dependent demand. Its demand is dependent upon a higher level assembly.
34) Independent demand can be defined by all of the following except: A) Demand not related to demand from higher level assemblies B) Forecasted demand C) Demand calculated based on present demand D) Demand from customer orders
The correct answer is: C Demand calculated from present demand would be dependent demand. Its demand is dependent upon a higher level assembly.
18) The following formula represents which forecasting technique? New forecast = (alpha)(latest demand) + (1-alpha)(previous forecast) A) Weighted moving average B) Double exponential smoothing C) Exponential smoothing D) Focus forecasting
The correct answer is: C Exponential smoothing uses a smoothing constant called alpha. It smoothes the variation between latest actual demand and the forecasted demand.
42) The following formula represents which forecasting technique? New forecast = (alpha)(latest demand) + (1-alpha)(previous forecast) A) Weighted moving average B) Double exponential smoothing C) Exponential smoothing D) Focus forecasting
The correct answer is: C Exponential smoothing uses a smoothing constant called alpha. It smoothes the variation between latest actual demand and the forecasted demand.
17) When a company has historical data available for use in forecasting future demand, the technique for utilizing this data is called: A) qualitative forecasting techniques. B) extrinsic forecasting techniques. C) intrinsic forecasting techniques. D) causal forecasting techniques.
The correct answer is: C Intrinsic forecasting techniques use internal historical data to forecast future demand. It is used based on an assumption that historical patterns can predict future patterns.
41) When a company has historical data available for use in forecasting future demand, the technique for utilizing this data is called: A) qualitative forecasting techniques. B) extrinsic forecasting techniques. C) intrinsic forecasting techniques. D) causal forecasting techniques.
The correct answer is: C Intrinsic forecasting techniques use internal historical data to forecast future demand. It is used based on an assumption that historical patterns can predict future patterns.
33) In make to stock requirements, customer orders are satisfied from: A) available capacity. B) work in process inventory. C) finished goods inventory. D) raw material inventory.
The correct answer is: C Make-to-stock companies ship customer orders from finished goods. Make to order companies ship from available capacity.
9) In make to stock requirements, customer orders are satisfied from: A) available capacity. B) work in process inventory. C) finished goods inventory. D) raw material inventory.
The correct answer is: C Make-to-stock companies ship customer orders from finished goods. Make to order companies ship from available capacity.
73) Many companies will call themselves market driven. This would indicate that they: A) develop strong advertising campaigns. B) established a strong brand image in the market. C) respond to the customers needs. D) conduct market research.
The correct answer is: C Market driven companies are constantly developing goods and services which provide customers with a reason to buy from them. They are very capable of listening to the market and responding quickly to the market messages.
13) Planning bills can be best described as: A) bills of material based on forecast demand. B) bills of material for new products. C) bills of material which represent average products. D) bills of material for expected usage.
The correct answer is: C Planning bills are an artificial grouping of components established for planning purposes. They are used to simplify forecasting and scheduling. They are not buildable products.
37) Planning bills can be best described as: A) bills of material based on forecast demand. B) bills of material for new products. C) bills of material which represent average products. D) bills of material for expected usage.
The correct answer is: C Planning bills are an artificial grouping of components established for planning purposes. They are used to simplify forecasting and scheduling. They are not buildable products.
53) Based on the following data, what should the monthly production be to achieve level production? Beginning inventory = 300 units Ending inventory. = 400 units Sales forecast Month 1 2 3 4 5 Quantity 300 400 200 300 200 A) 200 B) 250 C) 300 D) 350
The correct answer is: C The company is beginning with 300 units and wants to increase the inventory level by 100 units. In addition, the sales forecast calls for 1400 units to be sold over the 5 periods. Therefore, 1400 + 100 units need to be produced for a total of 1500 units over 5 periods, or 300 units per period.
55) Which of the following best describes a master production schedule? A) Product families, monthly B) End items, monthly C) End items, weekly D) Product families, weekly
The correct answer is: C The master production schedule plans end items on a weekly basis. This detailed production schedule ties directly to the production plan which is a plan for product families, monthly.
52) The material requirements system receives direct input from: A) production planning. B) capacity requirements planning. C) master production scheduling. D) purchasing.
The correct answer is: C The master production schedule, once established, is submitted to the MRP system for use in calculating demand for the components.
58) What is the Mean Absolute Deviation for the following data? Period 1 2 3 4 5 Forecast 100 100 150 150 150 Demand 90 105 140 160 170 A) 3 B) 9 C) 11 D) 15
The correct answer is: C The mean absolute deviation is calculated by adding the absolute value of the difference between the actual demand and the forecast, divided by the number of periods. For this example, the absolute deviation is calculated by adding 10+5+10+10+20=55. Divide 55 by the number of periods (5) to equal 11.
46) Based on the following information, what is the mean? Period Demand 1 1000 2 500 3 700 4 600 A) 500 B) 600 C) 700 D) 800
The correct answer is: C The mean is calculated by adding the values and dividing by the number of periods. For this problem: X= (1000+500+700+600)/4 X= 2800/4 X= 700
22) Based on the following information, what is the mean? Period Demand 1 1000 2 500 3 700 4 600 A) 500 B) 600 C) 700 D) 800
The correct answer is: C The mean is calculated by adding the values and dividing by the number of periods. For this problem: X= (1000+500+700+600)/4 X= 2800/4 X= 700
74) The primary purpose for forecasting is: A) estimating safety stock. B) determining resource and capacity requirements. C) projecting product demand. D) level loading the master schedule.
The correct answer is: C The primary purpose of forecasting is to project product demand. Based on those projections, safety stock can be estimated, resource and capacity constraints can be identified, and the master schedule load strategy can be determined. However, these occur only after projecting what the product demand will be.
57) Based on the following data, what would the projected forecast for month 5 be, using a 3 month moving average? Month 1 2 3 4 Forecast 200 200 200 200 Actual Demand 190 210 190 170 A) 170 B) 180 C) 190 D) 200
The correct answer is: C The three month moving average is found by taking the actual demand for the last three months divided by three. Therefore, the calculation would be: (210+190+170)/3 = 570 570/3 = 190
56) The forecast for a part is 200 units per week. The actual shipments for the last 5 weeks have been 250, 260, 210, 240, and 220. If the MAD is 20, what would the tracking signal equal? A) 3 B) 6 C) 9 D) 12
The correct answer is: C Tracking signals measure the bias in a forecast. The above demand would reflect a negative bias in the forecast, as the forecast is consistently less than the actual demand. To calculate a tracking signal, divide the sum of the forecast errors by the MAD. Therefore: 50+60+10+40+20 = 180 180/20 = 9
49) A company wants to produce at a level rate. Based on the following information, what production rate will provide a projected inventory of 20 at the end of period five? Period 1 2 3 4 5 Forecast Demand 20 10 15 15 10 Planned Production Planned Inventory 10 A) 14 B) 15 C) 16 D) 17
The correct answer is: C The total forecasted demand is equal to 70 for the five periods. In addition to the forecasted demand, the company wants to raise the inventory from 10 to 20 by the end of period five, therefore the total requirement is for 80 units. To produce 80 units over five periods in a level manner, the company must produce 16 units per period in order to achieve its objective.
39) Which of the following would be included in demand management? I. Forecasted requirements II. Service parts requirements III. Branch warehouse requirements IV. Inter-plant orders A) I, II, and III B) II, III, and IV C) I, III, and IV D) I, II, III, and IV
The correct answer is: D All of the answers would be part of demand management, plus order entry and order promising.
60) An anticipated build schedule can be best described as: A) production plan. B) capacity plan. C) materials requirements plan. D) master production schedule.
The correct answer is: D As defined by the tenth edition of the APICS dictionary, the master production schedule is "the anticipated build schedule for those items assigned to the master scheduler."
12) Which of the following is not an input to MRP? A) Master Production Schedule B) Inventory records C) Bill of materials D) Capacity planning
The correct answer is: D Capacity planning is not an input to MRP. In fact, MRP assumes infinite capacity is available in its calculation.
36) Which of the following is not an input to MRP? A) Master Production Schedule B) Inventory records C) Bill of materials D) Capacity planning
The correct answer is: D Capacity planning is not an input to MRP. In fact, MRP assumes infinite capacity is available in its calculation.
68) The primary advantage of the concurrent engineering process is that: A) inventory needs are reduced. B) engineers work with other departments on projects improving communication. C) project costs for the development are accurately accounted for. D) product development time is reduced.
The correct answer is: D Concurrent Engineering is the process of forming product teams for the purpose of developing a new product(s). Generally the teams are cross-functional and include representatives from all areas in the company. The teams will often include suppliers as well. Because the product team is focused on delivery of a new product and is constantly interacting with each other, products can be delivered faster, with higher quality at a lower cost. Additionally, the manufacturability of the product will be improved, lowering the ongoing cost of quality.
78) Which of the following would NOT be considered marketing research? A) Market analysis B) Sales analysis C) Consumer research D) Market penetration
The correct answer is: D Market penetration is the level by which a product has been accepted in the marketplace. This would include the actual market share which a product has obtained.
1) Production plans have all of the following except: A) Shipment plan B) Product families C) Inventory plan D) Weekly production
The correct answer is: D Production plans are generally monthly statements of shipments, production, and inventory (or backlog), broken down by product families, not end items.
25) Production plans have all of the following except: A) Shipment plan B) Product families C) Inventory plan D) Weekly production
The correct answer is: D Production plans are generally monthly statements of shipments, production, and inventory (or backlog), broken down by product families, not end items.
24) Which of the following best describes the Master Production Schedule? A) It is the actual build schedule for manufacturing. B) It is the final assembly schedule. C) It is driven by materials requirements planning. D) It is the planned build schedule for manufacturing.
The correct answer is: D The Master Production Schedule is the planned build schedule for manufacturing. A final assembly schedule is generally separate from the MPS and the actual build schedule may vary from what was planned.
31) Which of the following are objectives when establishing the MPS? I. Efficient use of resources II. Efficient final assembly III. High customer service levels IV. Efficient use of inventory A) I, II, and III B) I, II, and IV C) I, II, III, and IV D) I, III, and IV
The correct answer is: D The master scheduler, when developing the MPS, must make sure labor, material, equipment, and inventory are being used efficiently in order to maintain high levels of customer service. Efficient final assembly would be developed by a final assembly schedule.
7) Which of the following are objectives when establishing the MPS? I. Efficient use of resources II. Efficient final assembly III. High customer service levels IV. Efficient use of inventory A) I, II, and III B) I, II, and IV C) I, II, III, and IV D) I, III, and IV
The correct answer is: D The master scheduler, when developing the MPS, must make sure labor, material, equipment, and inventory are being used efficiently in order to maintain high levels of customer service. Efficient final assembly would be developed by a final assembly schedule.
