ISDS Chapter 14
3 benefits of ERP
(1) automate and integrate many (or most) of their business processes; (2) share a common database and business practices throughout the enterprise; and (3) produce information in real time.
ERP allows companies to do 3 things:
(1) automate and integrate many (or most) of their business processes; (2) share a common database and business practices throughout the enterprise; and (3) produce information in real time.
4 key benefits of MRP
(1) better response to customer orders because of improved scheduling; (2) faster response to market changes; (3) improved utilization of facilities and labor; and (4) reduced inventory levels.
An item's annual holding cost is $75. Each setup costs $100. Lead time is 2 weeks. Annual demand is 15,000. The EOQ lot size quantity would be
200
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 manufacturer of Y is 1 week. The lead time for 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 which of the following?
99%
Which of the following best describes a gross material requirements plan?
A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start.
automates and integrates the majority of business processes
Enterprise Resource Planning
T/F: Because most services cannot be inventoried, there is little place for JIT to help service organizations achieve competitive advantage.
False
T/F: MRP can be effective only if very accurate lot sizes are calculated in advance.
False
Which of the following statements regarding the gross material requirements plan is false?
It includes inventory on hand
What is a dependent demand technique that uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements?
MRP
MRP II is accurately described as:
MRP augmented by other resource variables
Which of the following statements regarding MRP in services is true?
Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.
Low-level coding means that:
a component item is coded at the lowest level at which it appears in the BOM structure
Capacity planning in closed-loop MRP does not do which of the following?
adds in additional capacity
Material requirements planning (MRP) does not consider
capacity
Effective use of MRP and other dependent demand models does not require which of the following?
cost of individual components
The phrase "demand related to the demand for other products" describes
dependent demand
Which of the following is false concerning enterprise resource planning?
it's inexpensive
What lot-sizing technique is generally preferred when inventory holding costs are extremely high?
lot-for-lot
Which of the following lot-sizing techniques results in the lowest holding costs?
lot-for-lot
Which of the following lot-sizing techniques results in the lowest holding costs?
lot-for-lot
In MRP, system nervousness is caused by
management's attempt to continually respond to minor changes in production requirements
A document calls for the production of 50 small garden tractors in week 1; 50 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
master production schedule
The __________ is the MRP input detailing which end items are to be produced, when they are needed, and in what quantities.
master production schedule
A paint company mixes ten different base colors into 3,000 different color options. If the MPS is organized around the ten different base colors, their bills of material are classified as:
modular
Firms making many different final products use __________ to facilitate production scheduling.
modular bills
Linking a part requirement with a parent component that caused the requirement is referred to as:
pegging
A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified?
planning bill
Which of the following is not a key benefit of MRP?
quality increases
Distortion in MRP systems can be minimized when safety stock is held at the
raw material level
All of the following are advantages of enterprise resource planning except it
requires additional training
If a load report (resource requirements profile) shows a work center scheduled beyond capacity, then
the work center's load may be smoothed
Which of the following is a step towards integrating MRP and finite capacity?
using smaller buckets
In MRP, system nervousness is caused by:
management's attempt to continually respond to minor changes in production requirements.
