Ch. 14

Master production schedule

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 __________. A. Bill of material b. Planning bill c. Master production schedule

Modular

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: A. Modular b. Planning c. Phantom

Requires additional training

All of the following are advantages of enterprise resource planning except it __________. a. Requires additional training b. Increases communication and collaboration between business units worldwide c. Can provide a strategic advantage over competitors

200 Q* = Economic Order Quantity D = Annual Demand (in this case 15,000 units) S = Fixed cost per setup (in this case $100) H = Holding or Carrying cost ($75) Step 1: calculate 2*D (Annual Demand)*S(Setup Cost) 2*15,000*100 = 300,000 Step 2: Divide 2*D (Annual Demand)*S(Setup Cost)/H 300,000/75 = 40,000 Step 3: Take square root of 40,000 Square root of 40,000 = 200.

An items annual holding cost is $75. Each setup cost is $100. Lead time is 2 weeks. Annual demand is 15,000 The EOQ lot size quantity would be: a. 200 b. 60 c. 72

Adds in additional capacity

Capacity planning in closed-loop MRP does not do which of the following? a. Adds in additional capacity b. Utilize feedback about workload c. Smooth work center loads

Raw material level

Distortion in MRP systems can be minimized when safety stock is held at the __________. a. Raw material level b. Work in process level c. Any inventory point

8 Therefore, 1 week (lead time for part Y) + 6 weeks (lead time for part Z) + 1 week (assembly time for product X) = 8 weeks cumulative lead time.

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. A. 6 b. 8 c. 10

Cost of individual components

Effective use of MRP and other dependent demand models does not require which of the following? a. Bill of materials b. Cost of individual components c. Lead times

Automates and integrates the majority of business processes

Enterprise resource planning: a. Seldom requires additional software b. Does not integrate well with other functional areas beyond operations c. Automates and integrates the majority of business processes

Modular bills When bills of material are organized around product modules (rather than final products), they are referred to as modular bills.

Firms making many different final products use ______ to facilitate production scheduling a. Modular bills b. Planning bills c. Phantom bills

The work center's load may be smoothed

If a load report (resource requirements profile) shows a work center scheduled beyond capacity, then: a. The work centers load may be smoothed b. The company must add capacity by enlarging the facility c. The aggregate plan must be revised

Managements attempt to continually respond to minor changes in production requirements

In MRP, system nervousness is caused by: a. The use of the lot for lot approach b. Managements attempt to continually respond to minor changes in production requirements c. Managements attempt to evaluate alternative plans before taking action

Pegging

Linking a part requirement with the parent component that caused the requirement is referred to as: a. Net requirement planning b. Leveling c. Pegging

MRP augmented by other resource variables

MRP II is accurately described as: a. MRP augmented by other resource variables b. Enhanced MRP that includes all elements of the supply chain c. MRP software designed for services

Capacity

Material requirements planning (MRP) does not consider a. Time buckets b. Capacity c. Service organizations

Master production schedule

The __________ is the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. Master production schedule b. Purchase order c. Bill of material

Dependent demand

The phrase "demand related to the demand for other products" describes: a. A dependent variable b. Dependent demand c. Recursive demand

Lot for lot

What lot-sizing technique is generally preferred when inventory holding costs are extremely high? a. Part period balancing b. Economic order quantity c. Lot for lot

A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start

Which of the following best describes a gross material requirements plan? a. An intermediate range plan for the scheduling of families of products b. A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start c. A schedule showing which products are to be manufactured and in what quantities

It is inexpensive to implement

Which of the following is FALSE concerning enterprise resource planning (ERP)? a. It shares common data and practices across the enterprise b. It provides and accesses info in a real time environment c. It is inexpensive to implement

Using smaller buckets

Which of the following is a step towards integrating MRP and finite capacity? a. Using smaller buckets b. Using pegging c. Using time fences

Quality increases

Which of the following is not a key benefit of MRP? a. Improves response to customers b. Faster response to market changes c. Quality increases

Lot for lot

Which of the following lot sizing techniques results in the lowest holding costs? a. Part period balancing b. Lot for lot c. Economic order quantity

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. Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills of material, and scheduling b. MRP does not work well in services because there is little (or no) dependent demand c. MRP can be used in services, but only for those that offer little customization

It includes inventory on hand

Which of the following statements regarding the gross material requirements plan is false? a. It shows when an item must be ordered or when production must be started b. It includes inventory on hand c. It combines a master production schedule with the time phased schedule