SCM4362 - Exam 3 Review

Which of the following is an assumption commonly made in using MRP lot-sizing procedures?

All of the options are assumptions commonly made in using MRP lot-sizing procedures.

Which of the following are functions of inventory?

All of the options are functions of inventory

Which of the following statements is correct?

All of the statements are correct.

Which of the following statement is(are) true in ROP analysis?

All statements are true

PAC is located in which part (phase) of the MPC framework?

Back end

In Theory of Constraints, which of the following is represented by "drum"?

Bottleneck resource

he Theory of Constraints (TOC) approach is also referred to as

Drum - Buffer - Rope

For a certain item, it was observed that the holding cost per annum per unit was equal to the setup cost per order. What can we say about the EOQ in this case?

EOQ =Sqrt (2A) , where A is the annual demand.

The prime objective of PAC is:

Executing MPC plans

A CR (Critical ratio) > 1 of a job implies that the job is already late.

False

In a TOC system, inventory buffers before bottleneck resources are eliminated

False

In a single machine job shop, the makespan depends on the rule used for scheduling.

False

In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

False

Inventory items that are found at many points in a supply chain, including finished goods in factories, field warehouses, and distribution centers; spare-parts inventories; office and factory supplies; and maintenance materials are referred to as dependent demand inventories.

False

Johnson's rule when applied in a two-machine case will provide minimum average lateness.

False

KBB will provide the minimum total cost only if the net requirements in MRP are lumpy.

False

PAC stands for Process Activity Control

False

Short term capacity planning should be driven by identification and management of non-bottlenecks.

False

TOC stands for Theory of Operating Controls.

False

The A-B-C approach involves classifying inventory items based on their name.

False

The Critical Ratio rule uses the information about the processing time of the job in the current work center only.

False

The EOQ is based on the assumption of lumpy demand,

False

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

The primary consideration in the development of lot-sizing procedures for MRP is the nature of the gross requirements data.

False

The use of the lot-for-lot procedure tends to increase the lumpiness of the gross requirements of items further down in the BOM.

False

Which one of the following reasons creates a pressure for reducing inventories?

High interest or opportunity cost

Which of the following three strategies can be useful in reducing MRP system nervousness?

I- Using Time fences II- Using Firm Planned Orders III- Careful use of Lot-Sizing procedures

Which one of the following lot sizing rules guarantees an optimal solution when demand is constant?

KBB & EOQ

The total time to process an entire set of jobs at a work center is referred to as

Make-span

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

None of the statements is correct

Summing the setup times and run times for all remaining operations, and subtracting this from the time remaining until the due date is referred to as

Order Slack (ST) rule

Which one of the following is not an assumption of the basic EOQ model?

Quantity discounts can be taken advantage of for large lot sizes.

Practical application of the Theory of Constraints involves the implementation of all of the following steps except

Reduce the capacity at the bottleneck(s).

Which sequencing rule ignores all due date information as well as all information about work remaining?

SPT

Which one of the following descriptions best defines customer service level?

The desired probability of not running out of stock during the lead time

. In TOC, bottleneck work centers are scheduled using finite loading techniques.

True

A bottleneck is an operation that has the lowest capacity of any operation in the process.

True

A bottleneck resource should never be starved.

True

A negative SPO (Slack per remaining operations) of a job implies that the job is already late

True

Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost.

True

Everything else remaining the same, if EOQ increases, Time Between Orders (TBO) will increase.

True

Johnson's sequencing rule for two machines will minimine the makespan

True

KBB sometimes may yield the same total cost (cost of ordering + cost of carrying) as when some other Lot sizing method is used

True

MRP lot-sizing procedures are designed specifically for the discrete demand case.

True

POQ and LFL will be the same if TBO = 1 period.

True

Sequencing rules simply prioritize jobs at work centers without reference to the capacity.

True

The SFC system of PAC is updated on changes in the MRP system

True

The SPT rule represents the best way to pick the next job to run, if the objective is to minimize average time per job, to minimize average number of jobs in the system, or to minimize average job lateness.

True

The Theory of Constraints scheduling loads work centers to full capacity by using finite scheduling.

True

The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

True

The basic EOQ model ignores the purchasing cost.

True

The calculation of safety stock requires knowledge of demand and lead time.

True

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

True

The primary PAC objective is managing the materials flow to meet MPC plans

True

The primary connection between PAC and the rest of the MPC systems comes from material requirements plans.

True

The process with the least capacity is called a bottleneck

True

The quantities and timings for planned order releases are determined via MRP logic using the inventory records, the gross requirements data, and a quantity-determination (lot-sizing) procedure.

True

Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered.

True

When ordering costs are relatively small compared to inventory carrying costs, LFL will yield favorable results

True

Priority sequencing rules determine which of the following?

Which job to work on at the work center?

When several jobs arrive at a work center, there is a need for

a system of scheduling and prioritizing

The need for safety stocks can be reduced by an operations strategy which

all of the options are incorrect

Which of the following statements is correct about complete enumeration?

all possible alternatives are evaluated and compared to pick the best solution.

The general objective of all MRP lot-sizing procedures is to

balance inventory-related costs to achieve a low total cost requirement schedule.

According to Theory of Constraints, buffers should

be actively managed

Consider consecutive processes A-B-C, where process A has a capacity of 20 units per hour, process B has a capacity of 25 units per hour, and process C has a capacity of 30 units per hour. Where would an operations manager, with some understanding of TOC, want any buffer inventory?

in front of process A.

In Theory of Constraints application, "breaking the constraint" or "elevate the bottleneck(s)," means

increasing capacity of the bottleneck.

Using the Theory of Constraints scheduling logic in simulation mode can help

negotiate achievable delivery dates and meet customer service goals.

Which of the following statements is correct about implicit enumeration?

only promising alternatives are judiciously selected & evaluated.

One way of dealing with the shop-floor complexity is by

priority sequencing rules

In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will

remain the same.

Which one of the following would not be a factor in determining the reorder point?

the EOQ

sequencing rules are used to establish

the priorities for the jobs in a queue waiting to be processed at a work center.