ISDS 3115 Chapter 14
The MPS calls for 50 units of Product A and 60 of B. There are currently 25 of Product B on hand. Each A requires 2 of Part C; each B requires 5 of C. There are 160 units of C available. The net requirements for C are
115
Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is _______ days.
13
The MPS calls for 110 units of Product A. There are currently 60 of Product A on hand. Each A requires 4 of Part B. There are 20 units of B available. The net requirements for B are
180
An item's holding cost is 60 cents per week. Each setup costs $120. Lead time is 2 week. EPP is
200
The MPS calls for 110 units of Product M. There are currently 30 of Product M on hand. Each M requires 4 of Component N. There are 20 units of N on hand. The net requirements for N are
300
Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacture of Y is 1 week. The lead time for the procurement of Z is 6 weeks. The cumulative lead time for X is _______ weeks.
8
The minimum record accuracy required for successful MRP is approximately
99%
True or false? A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item.
True
True or false? Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.
True
True or false? DRP is a time-phased stock-replenishment plan for all levels of a distribution network.
True
True or false? Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.
True
True or false? Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.
True
True or false? In general, the lot-for-lot approach should be used whenever economical.
True
True or false? Reduced inventory levels and faster response to market changes are both benefits of MRP.
True
Low level coding means that
a component item is coded at the lowest level at which it appears in the BOM structure
Which of the following statements is TRUE about the MRP plan when using lot-for-lot ordering? a. The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. c. The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. d. The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. e. All of the above are true.
b. The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly.
The ______ is the input to material requirements planning which lists the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product.
bill of material
In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket
is impossible
By convention, the top level in a bill of material is
level 0
What lot-sizing technique is generally preferred when inventory holding costs are extremely high?
lot-for-lot
In MRP, system nervousness is caused by
management's attempt to continually respond to mind changes in production requirements
A document calls for the production of 50 small garden tractors in week 1; 5 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a(n)
master production schedule
The _______ is (are) the MRP input dealing which end items are to be produced, when they are needed, and in what quantities.
master production schedule
Firms making many different final products use _______ to facilitate production scheduling.
modular bills
Material requirements plans specify
the quantity and timing of planned order releases
Each R requires 4 of component S; each S requires 3 of part T. The lead time for assembly of R is 1 week. The lead time for the manufacture of S is 2 weeks. The lead time for the procurement of T is 6 weeks. The cumulative lead time for R is _____ weeks.
9
True or false? "Phantom bills" are bills of material for subassemblies that do not exist in reality.
False
True or false? A dependent demand item is so called because its demand is dependent on customer preferences.
False
True or false? By convention, the top level in a bill of material is designated level 1.
False
True or false? In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.
False
True or false? MRP can be effective only if very accurate lot sizes are calculated in advance.
False
True or false? MRP is an excellent tool for scheduling products with variable lead times.
False
True or false? Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.
False
True or false? Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning.
False
True or false? The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how much of which products is to be made at what times.
False
True or false? The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.
False
True or false? The economic part period is a fraction of a time bucket.
False
True or false? The master production schedule is a forecast of demand for families of products.
False
MRP II is accurately described as
MRP augmented by other resource variables
When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic?
Projected On Hand
True or false? Gross material requirements do not take into account the amount of inventory on hand.
True
True or false? If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.
True
True or false? If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.
True
True or false? If parts and subassemblies common to a variety of products are managed through the supermarket concept, formal order releases for such parts are not necessary.
True
True or false? Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.
True
True or false? MRP is generally practiced on items with dependent demand.
True
True or false? Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.
True
True or false? Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.
True
True or false? The lot-for-lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.
True
True or false? The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.
True
True or false? The supply chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.
True
True or false? The time phased product structure, unlike the bill of material, adds the concept of lead times.
True
True or false? Time fences divide that segment of the MPS that can be revised from that section that is "frozen."
True
True or false? Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.
True
True or false? When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected on-hand inventory of the MRP logic.
True
True or false? While ERP may provide a strategic advantage over competitors, it is so complex that many companies cannot adjust to it.
True
Distribution resource planning (DRP) is
a time-phased stock replenishment plan for all levels of a distribution network
Which of the following best differentiates material requirements planning (MRP) from finite capacity scheduling (FCS)? a. FCS recognizes the finite nature of capacity while MRP does not. b. FCS works in services while MRP does not. c. MRP requires time buckets while FCS does not. d. FCS is an input into traditional MRP systems. e. FCS uses the Wagner-Whitin algorithm while MRP uses lot-for-lot and EOQ.
a. FCS recognizes the finite nature of capacity while MRP does not.
Which of the following best describes a gross material requirements plan? a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started b. an intermediate range plan for the scheduling of families of products c. a chart illustrating whether capacity has been exceeded d. a table that corrects scheduled quantities for inventory on hand e. a schedule showing which products are to be manufactured and in what quantities
a. a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started
Which of the following lot-sizing techniques results in the lowest holding costs? a. lot-for-lot b. EOQ c. part-period balancing d. Wagner-Whitin algorithm e. the quantity discount model
a. lot-for-lot
Enterprise resource planning (ERP)
automates and integrates the majority of business processes
Which of the following statements regarding lot-sizing is TRUE? a. EOQ principles should be followed whenever economical. b. Too much concern with lot-sizing results in false accuracy. c. Lot-for-lot cannot be modified for scrap allowance or process constraints. d. The Wagner-Whitin algorithm simplifies lot size calculations. e. All of the above are true.
b. Too much concern with lot-sizing results in false accuracy.
Which of the following is FALSE concerning enterprise resource planning (ERP)? a. It attempts to automate and integrate the majority of business processes. b. It shares common data and practices across the enterprise. c. It is inexpensive to implement. d. It provides and accesses information in a real-time environment. e. All of the above are true.
c. It is inexpensive to implement.
Which of the following statements regarding Wheeled Coach is FALSE? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.
c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.
A material requirements plan contains information with regard to all of the following EXCEPT a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. the capacity needed to provide the projected output rate d. inventory on hand for each final product e. inventory on hand for each subassembly
c. the capacity needed to provide the projected output rate
A bill of material lists the
components, ingredients, and materials required to produce an item
The bill of material contains information necessary to
convert (explode) net requirements at one level into gross requirements at the next level
In job shop (make-to-order) operations, the master production schedule is usually expressed in
customer orders
Dependent demand and independent demand items differ in that a. for any product, all components are dependent-demand items b. the need for independent-demand items is forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.
d. All of the above are true.
Which of the following statements regarding MRP in services is TRUE? a. MRP is for manufacturing only, and is not applicable to services. b. MRP can be used in services, but only those that offer very limited customization. c. MRP does not work in services because there is no dependent demand. d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. e. None of the above is true.
d. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.
All of the following are advantages of enterprise resource planning (ERP) EXCEPT it a. creates commonality of databases b. increases communications and collaboration worldwide c. helps integrate multiple sites and business units d. requires major changes in the company and its processes to implement e. can provide a strategic advantage over competitors
d. requires major changes in the company and its processes to implement
The phrase "demand related to the demand for other products" describes
dependent demand
Enterprise resource planning (ERP) a. has been made possible because of advances in hardware and software b. uses client/server networks c. creates commonality of databases d. uses business application-programming interfaces (BAPI) to access their database e. All of the above are true of ERP.
e. All of the above are true of ERP
Capacity planning in closed-loop MRP a. utilizes feedback about workload from each work center b. may make use of resource requirements profiles (load reports) c. may smooth work center loads with such tactics as overlapping and lot splitting d. does not add capacity, but rather seeks effective use of existing capacity e. All of the above are true.
e. All of the above are true.
Which of the following regarding enterprise resource planning (ERP) is TRUE? a. It involves an ongoing process for implementation. b. It can incorporates improved, reengineered "best processes." c. It has a software database that is off-the-shelf coding. d. ERP systems usually include MRP, financial and human resources information. e. All of the above are true.
e. All of the above are true.
Which of the following statements regarding the gross material requirements plan is TRUE? a. It shows total demand for an item. b. It shows when an item must be ordered from a supplier or when production must be started. c. It combines a master production schedule with the time-phased schedule. d. It requires several inputs, including an accurate bill of material. e. All of the above are true.
e. All of the above are true.
Which of the following statements best compares modular bills and phantom bills? a. Both pertain to assemblies that are not inventoried. b. There is no difference between the two. c. Both pertain to assemblies that are inventoried. d. Modular bills are used for assemblies that are not inventoried, unlike phantom bills. e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.
e. Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.
Distortion in MRP systems can be minimized when safety stock is held at the a. purchased component or raw material level b. work-in-process level c. finished goods level d. a and b e. a and c
e. a and c
The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above
e. all of the above
In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of
end items
A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n)
engineering change notice
The extension of MRP which extends to resources such as labor hours and machine hours, as well as to order entry, purchasing, and direct interface with customers and suppliers is
enterprise resource planning
Linking a part requirement with the parent component that caused the requirement is referred to as
pegging
A master production schedule contains information about
quantities and required delivery dates of final products
For the lot-sizing technique known as lot-for-lot to be appropriate
setup cost should be relatively small
A firm makes numerous models of mowers, garden tractors, and gasoline powered utility vehicles. Some assemblies and parts are common to many end items. To relieve the MPS of performing order releases on these common parts, the firm might choose to use the ________ technique.
supermarket
The number of units projected to be available at the end of each time period refers to
the amount projected to be on hand
If a load report (resource requirements profile) shows a work center scheduled beyond capacity
the work center's load may be smoothed by such tactics as operations splitting or lot splitting
Demand for a given item is said to be dependent if
there is a clearly identifiable parent
One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are)
time fences
A master production schedule specifies
what product is to be made, and when
