MGMT 483 Exam 2

Input/Output Control

Approach to identifying which work centers are performing well and which may require corrective actions (management by exception)

True

Assemble-to-Order makes use of a planning BOM (super bill).

BIll of Materials

"recipe" for producing a product, showing types and quantities of components required, as well as the order of assembly

What 2 things does a MPS do?

1. Translates the SOP plan into a plan for specific products 2. Coordinates activités of sales and manufacturing

What are the 3 inputs of MRP?

1. detailed material plan from MPS system 2. inventory status data (on hand, in transit, etc) 3. bill of materials

True

BOM are in the engine.

False (are monitored)

Backlogs are not monitored to determine net deviations from plans

True

Bottlenecks are scheduled to produce at their maximum rate

True

Bottlenecks will have buffer inventory stored before the work center to ensure that it never runs out of work (planned backlog)

Projected Available Balance

current and projected inventory status for the item at the end of each period

Dependent Demand

depend on the net requirements from others

Weaknesses of CPOF

does not reflect most current information or changes in product structure/mix - ignores information concerning lead times

Scheduled Receipts

existing replenishment orders for the item due in at the beginning of each period

Assemble-to-Order

has an almost limitless number of possible end item configuration, all made from combinations of basic components and subassemblies

Planning Horizon

looks farther into the future during the planning process in order to consider more complete information

True

Demand Management takes place in the front end.

False (engine)

Detailed material planning takes place in the front end.

What is Capacity Requirements Planning (CRP)?

Detailed planning technique (not rough-cut) that allocates production capacity based on current capacity usage for end items with consideration of BOM structure, inventory data, and lead times

True

Exceptions codes are used in MRP systems to separate the vital few from the trivial many.

True

Firms with diverse product lines will tend to use aggregate measures such as labor hours, machine hours, or dollars

True

Firms with uniform product lines may use measures such as units, jobs, etc

False (changes can NOT be made)

For dates in the near future (inside the production/purchasing lead time, production orders are frozen and changes can be made

True

Labor intensive industries will tend to measure capacity in labor hours, capital intensive industries will tend to use machine hours

False

MPS does not have to be kept up to date.

True

MRP represents net requirements, planned order releases for any higher level part are transferred to become the gross requirements for lower level parts

True

MRP uses a back schedule logic (starting each item as late as possible) when accounting for lead times

False

Make-to-Order MPS is not driven by customer orders.

True

Make-to-Stock is a plan for actual end item production.

True

Make-to-Stock is not necessarily driven by customer orders, but also forecast.

False (front end)

Master Production Schedule takes place in the engine.

True

Material Requirements Planning (MRP) is used to develop detailed plans for producing/purchasing components used to build MPS parts (end items)

True

Non-bottle necks will be scheduled to produce at a rate that supports the bottleneck work center(s)

True

Non-bottlenecks will not have buffer inventory

True

Planned inputs are compared to actual inputs to calculate deviations from the input plan. (same for outputs)

False (front end)

Resource planning takes place in the engine.

True

Rough-cut capacity planning takes place in the front end.

What is Capacity Bills of Material?

Rough-cut planning technique that allocates production capacity based on current capacity usage for end items with consideration of BOM structure

What is Capacity Planning using Overall Factors (CPOF)?

Rough-cut planning technique using historical information to allocate planned production to work centers

What is Resource Profiles?

Rough-cut planning that allocates production capacity based on current capacity usage for end items with consideration of BOM structure and lead times

True

Sales and Operations planning takes place in the front end.

True

To enhance the stability of the MPS, many firms utilize a number of "freezing" or "time fencing" strategies.

What is a Master Production Schedule (MPS)?

a statement of planned future output or the anticipated build schedule for the company

Backlog

accumulation of uncompleted work or work that needs to be done

Gross Requirements

anticipated future usage of or demand for the item during each period

Safety Stock

buffer of stock above and beyond that needed to satisfy the gross requirements

Make-to-Stock

carries finished goods inventories for most, if not all, of its end items

Make-to-Order

carries no finished-goods inventory and builds each customer order as needed

Lot Size

number of units made in a batch

Lead Time Offsetting

ordered earlier than actual date of requirement to allow transportation or production

Planned Order Releases

planned replenishment orders for the item at the beginning of each period

Level Strategy

production is held constant

Strengths of Resource Profiles

reflects current production realities in terms of capacity usage and considers lead times when allocating capacity requirements

Regeneration

refreshing of MRP records to reflect changes in forecast, customer orders, inventory, BOM, etc

Pegging

relates all the gross requirements for a part to all the planned order releases or other sources of demand that created the requirements

Bill of Materials

specifies the ingredients required to make each part number or assembly

Independent Demand

subject to demand from outside the firm

Explosion

the process of translating product requirements into component part requirements, taking existing inventories and scheduled receipts into account

What is MRP's managerial objective?

to provide "the right part at the right time" to meet the schedules for competed products.

Bottleneck

work centers that lack capacity and therefore limit the firms overall ability to produce and sell products

Weaknesses of CRP

- difficult to calculate - dependent upon the quality of the data (BOM, routing, and inventory)

Weaknesses of Resource Profiles

- ignores information concerning current inventory - relatively difficult to calculate - dependent upon the quality of the data (BOM and routing)

Weaknesses of Capacity BOM

- ignores information concerning lead times and current inventory - dependent upon the quality of the data (routing)

Strengths of CRP

- reflects current production realities in terms of capacity usage - considers lead time and inventory when allocating capacity requirements

Strengths of CPOF

- relatively easy to perform - not subject to errors in estimation to the extent of other capacity planning techniques

Strengths of Capacity BOM

- relatively easy to perform - reflects current production realities in terms of capacity usage