supply chain management test 3 chapters 11&12

An MRP system cannot answer the question:

"why?"

master schedule record

-forecasted demand -booked orders projected inventory levels -production quantities -units still available to meet customer needs

Which of the following statements regarding master production scheduling calculations is BEST? If booked orders are greater than forecasted orders, there must be a master production schedule for that period. If ending inventory is greater than or equal to zero, there is no master production schedule quantity for that period. Forecasted demand always exceeds booked orders. Booked orders always exceed forecasted demand.

Correct If ending inventory is greater than or equal to zero, there is no master production schedule quantity for that period.

Supply chain inventory:

Correct increases in cost as materials move downstream.

The inventory that companies hold to protect themselves against uncertainties in either demand or replenishment time is called:

Correct safety stock.

MRP is NOT capable of:

Correct sequencing jobs at a machining center.

A time-phased planning approach that uses planned orders at the point of demand to determine forecasted demand at the source level is:

DRP

planning and control

a set of tactical and execution level business activities that includes master scheduling , material requirements planning and some form of production activity control and vendor order management.

planning horizon

amount of time the master schedule record or mrp record extends into the future. in general longer the production and supplier lead times, the longer the planning horizon must be.

bullwhip effect

an extreme change in the supply position in a supply chain generated by a small change in demand downstream in the supply chain

If a manufacturer had no inventory of any kind but had orders for 10 finished units of their sole product, their buyer would know what parts to order if they were supplied with a:

bill of material

cycle stock

components or products that are received in bulk by a downstream partner, gradually used up and then replenished again in bulk by the upstream partner

master scheduling

detailed planning process that tracks production output and matches this output to actual customer orders.

safety stock

extra inventory that a company holds to protect itself against uncertainties in either demand or replenishment time.

Distribution requirements planning is used to synchronize supply chain partners at the production activity control level.

false

Order quantity decisions are typically made in isolation from considerations of transportation, packaging, and material handling.

false

The excess cost of an item is the profit you would have made on it.

false

hedge inventory

form of inventory buildup to buffer against some event that may not happened.

anticipation inventory

inventory that is held in anticipation of customer demand

transportation inventory

inventory that is moving from one link in the supply chain to another

smoothing inventory

inventory that is used to smooth out differences b/w upstream production levels and downstream demand.

inventory

those stocks or items used to support production (Raw materials and work in process items) supporting activities( maintenance repair and operating supplies) and customer service ( finished goods and spare parts)

Inventory that is "in the pipeline" moving from one link to another is:

transportation inventory.

Companies do not plan to use safety stock.

true

Component J is ordered on February 1, is received, and is ready to use on February 8. Its planning lead time is seven days.

true

Cycle stock can occur at more than one point in a supply chain.

true

Distribution requirements planning is identical to material requirements planning except instead of gross requirements, a DRP record shows forecasted demand.

true

From a revenue standpoint, a producer would rather have higher forecasted demand than booked orders.

true

In order for the economic order quantity model to work, demand must be known and constant.

true

Material requirements planning is performed at greater level of detail than master scheduling.

true

The bullwhip effect says that a small change in demand downstream in the supply chain causes a large change in demand upstream.

true

The longer the production and supplier lead times, the longer the master scheduling record's planning horizon needs to be.

true

The order quantity in a periodic review system rises as the on-hand inventory falls.

true

Which of the following relationships shows dependent demand inventory? A winemaker buys grapes from farmers in the Columbia Valley. A tire maker buys cleaning supplies. A business purchases a new car when the old one wears out. An automaker purchases four tires for each car they produce.

An automaker purchases four tires for each car they produce.