ISDS 3115: Chapter 14 TB

components, ingredients, and materials required to produce an item

**A bill of material lists the: a. times needed to perform all phases of production b. production schedules for all products c. components, ingredients, and materials required to produce an item d. operations required to produce an item e. components, ingredients, materials, and assembly operations required to produce an item

quantities and required delivery dates of final products

**A master production schedule contains information about: a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

what product is to be made, and when

**A master production schedule specifies: a. the raw materials required to complete the product b. what component is to be made, and when c. what product is to be made, and when d. the labor hours required for production e. the financial resources required for production

a and c

**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

is impossible

**In MRP record calculations, the appearance of a negative value for the gross requirements of an end item in a specific time bucket: a. signals the need to purchase that end item in that period b. implies that value was scheduled by the MPS c. signals the need for a negative planned order receipt in that period d. is impossible e. All of the above are true

pegging

**Linking a part requirement with the parent component that caused the requirement is referred to as: a. net requirements planning b. a time fence c. pegging d. kanban e. leveling

the quantity and timing of planned order releases

**Material requirements plans specify: a. the quantities of the product families that need to be produced b. the quantity and timing of planned order releases c. the capacity needed to provide the projected output rate d. the costs associated with alternative plans e. whether one should use phantom bills of material or not

time fences

**One of the tools that is particularly useful in reducing the system nervousness in the MRP system is (are): a. modular bills b. time phasing c. time fences d. lot sizing e. closed loop system

bill of material

**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. a. bill of material b. master production schedule c. inventory records d. assembly time chart e. net requirements chart

Projected On Hand

**When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic? a. Gross Requirements b. Scheduled Receipts c. Projected On Hand d. Net Requirements e. Planned Order Receipts

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 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

Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.

**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.

True

A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item A. True B. False

engineering change notice

A bill of material must be updated with the corrected dimensions of a part. The document that details this change is a(n): a. modular bill b. engineering change notice c. resource requirements profile d. lead time-offset product structure document e. planning bill

False

A dependent demand item is so called because its demand is dependent on customer preferences. A. True B. False

supermarket

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. a. Wagner-Whitin b. economic part period c. supermarket d. gross material requirements e. resource requirements profile

the capacity needed to provide the projected output rate

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

requires major changes in the company and its processes to implement

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

level 0

By convention, the top level in a bill of material is: a. level 0 b. level 1 c. level T d. level 10 e. level 100

there is a clearly identifiable parent

Demand for a given item is said to be dependent if: a. it originates from the external customer b. there is a deep bill of material c. the finished products are mostly services (rather than goods) d. there is a clearly identifiable parent e. the item has several children

All of the above are true.

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.

a time-phased stock replenishment plan for all levels of a distribution network

Distribution resource planning (DRP) is: a. a transportation plan to ship materials to warehouses b. a time-phased stock replenishment plan for all levels of a distribution network c. a shipping plan from a central warehouse to retail warehouses d. material requirements planning with feedback loop from distribution centers e. a material requirements planning package used exclusively by warehouses

All of the above are true of ERP.

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.

automates and integrates the majority of business processes

Enterprise resource planning (ERP): a. seldom requires software upgrade or enhancement b. does not integrate well with functional areas other than operations c. is inexpensive to implement d. automates and integrates the majority of business processes e. all of the above

modular bills

Firms making many different final products use __________ to facilitate production scheduling. a. planning bills b. modular bills c. phantom bills d. overdue bills e. none of the above

setup cost should be relatively small

For the lot-sizing technique known as lot-for-lot to be appropriate: a. future demand should be known for several weeks b. setup cost should be relatively small c. annual volume should be rather low d. item unit cost should be relatively small e. the independent demand rate should be very stable

True

Gross material requirements do not take into account the amount of inventory on hand. A. True B. False

False

In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ. A. True B. False

management's attempt to continually respond to minor changes in production requirements

In MRP, system nervousness is caused by: a. management's attempt to continually respond to minor changes in production requirements b. the use of the lot-for-lot approach c. management's marking part of the master production schedule as "not to be rescheduled" d. the use of phantom bills of material e. management's attempt to evaluate alternative plans before making a decision

end items

In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of: a. end items b. modules c. kits d. customer orders e. warehouse orders

customer orders

In job shop (make-to-order) operations, the master production schedule is usually expressed in: a. end items b. modules c. kits d. customer orders e. warehouse orders

True

Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP. A. True B. False

a component item is coded at the lowest level at which it appears in the BOM structure

Low level coding means that: a. a final item has only a few levels in the BOM structure b. it is the code for the lowest level in the BOM structure c. a component item is coded at the lowest level at which it appears in the BOM structure d. the top level of the BOM is below level zero and that BOMs are not organized around the finished product e. none of the above

False

MRP is an excellent tool for scheduling products with variable lead times. A. True B. False

True

MRP is generally practiced on items with dependent demand. A. True B. False

True

Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts. A. True B. False

True

Reduced inventory levels and faster response to market changes are both benefits of MRP. A. True B. False

False

Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning. A. True B. False

True

Smoothing a resource requirements profile to stay within capacity limits may increase setup costs. A. True B. False

master production schedule

The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

all of the above

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

convert (explode) net requirements at one level into gross requirements at the next level

The bill of material contains information necessary to: a. place an order to replenish the item b. calculate quantities on hand and on order c. convert net requirements into higher level gross requirements d. convert gross requirements into net requirements e. convert (explode) net requirements at one level into gross requirements at the next level

enterprise resource planning

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: a. MRP II b. enterprise resource planning c. the master production schedule d. closed-loop MRP e. not yet technically possible

True

The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost. A. True B. False

False

The master production schedule is a forecast of demand for families of products. A. True B. False

99%

The minimum record accuracy required for successful MRP is approximately : a. lower than 90% b. 90% c. 95% d. 97% e. 99%

the amount projected to be on hand

The number of units projected to be available at the end of each time period refers to: a. net requirements b. scheduled receipts c. the projected usage of the item d. the amount projected to be on hand e. the amount necessary to cover a shortage

dependent demand

The phrase "demand related to the demand for other products" describes: a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

True

The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used. A. True B. False

True

The time phased product structure, unlike the bill of material, adds the concept of lead times. A. True B. False

lot-for-lot

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. lot-for-lot b. EOQ c. part-period balancing d. the Wagner-Whitin algorithm e. All of the above are appropriate for the situation.

It is inexpensive to implement.

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

lot-for-lot

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

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 incorporate 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 resource information. e. All of the above are true.

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.

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

Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

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.

Too much concern with lot-sizing results in false accuracy.

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.

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.