CH 9

Setting planned orders to match the net requirements exactly is what type of lot sizing technique? EOQ Least total costs Least unit costs Lot-for-lot

Lot-for-lot

The ultimate goal of any MRP lot sizing approach is to balance the setup or _____ costs and the _____ costs associated with meeting the net requirements generated by the MRP planning process.

order holding

The bill-of-material (BOM) file is also known as a Multiple select question. product structure file. product recipe. assembly instruction. product tree.

product structure file. product tree.

An EOQ lot sizing technique will try to balance the sum of which of the following costs given a fairly constant demand? Multiple select question. Marketing Transportation Setup Holding costs

Setup Holding costs

Which type of time fence allows for changes to a specific product so long as parts are available? Slushy Frozen Scheduled Liquid

Slushy

A process that places all identical parts at the same level in the bills-of-materials simplifies computations. This process is known as low level coding.

True

Which is the correct equation used to calculate economic order quantity (EOQ)? EOQ= √(2HS/D) EOQ= √(2DS/H) EOQ= √(2DH/S) EOQ= √(DS/H)

EOQ= √(2DS/H)

In which of the following industry types would MRP provide high benefits? Multiple select question. Engineer-to-order Make-to-order Assemble-to-stock Assemble-to-order

Engineer-to-order Assemble-to-stock Assemble-to-order

True or false: Finished goods purchased by individuals external to the organization are considered dependent demand items.

False

A major drawback with lot-for-lot sizing is? Low investment costs High capital investments High setup costs Low setup costs

High setup costs

A bill-of-materials that uses differences in alignment to indicate the order of assembly of components is using which type of structure? Uneven structure Duplicate structure Component structure Indented structure

Indented structure

Which of the following is true about MRP? Multiple select question. MRP is not used for dependent demand items. MRP is used to determine the number of parts, components, and other materials needed to produce a product. MRP is the highest level of planning in most organizations. MRP is an acronym for Material Requirements Planning.

MRP is used to determine the number of parts, components, and other materials needed to produce a product. MRP is an acronym for Material Requirements Planning.

The next level in the planning process down from an aggregate plan is called? Supply coordination Materials requirements planning Demand forecasting The master production schedule

The master production schedule

Which of the following is not a type of time fence described in the text? Variable Frozen Slushy Liquid

Variable

Least unit cost provides _________ as an advantage when taking variable ordering costs and setup costs into account. a shorter computation a simple return on investment a quick reference a more complete analysis

a more complete analysis

Outside of determining parts, components, and materials, MRP provides independent demand for products being produced. a schedule for when each of these should be produced or ordered. a forecast for the next 6 months. the total plan for all capital investments needed.

a schedule for when each of these should be produced or ordered.

MRP systems tend to work best in companies where products are made in _____ using the same productive equipment.

batches

Level 0 items during the explosion process are typically referred to as _____ items, or gross requirements.

end

The master production schedule is used to plan raw materials. end items. supply parts. rework.

end items.

A material requirements planning system interfaces with the master production schedule, bill-of-materials file and __________. product demand. inventory records file. forecasted sales. customer purchase order.

inventory records file.

When changes occur because of stock receipts and disbursements, scrap losses, wrong parts and canceled orders, the real-time file capturing these changes is called the peg record file. bill-of-material file. inventory transactions file. inventory backlog file.

inventory transactions file.

The _____ _____ _____ method is a dynamic approach that adds ordering and inventory carrying costs for each trial lot size, divides the costs by the number of units, and chooses the lot size with the lowest unit cost.

least unit cost

One of the limitations with least total coast (LTC) is the influence by the size of the manufacturing site. length of the planning horizon. number of parts ordered. selection of suppliers.

length of the planning horizon.

An item that can be produced and stocked as a subassembly often uses a _____ bill-of-materials for planning.

modular

Some benefits of an ERP system are Multiple select question. quality management can develop inspection points for products during manufacturing. manufacturing knows about orders as soon as they are entered. human resources knows how many employees to schedule. sales can track all the details of an order.

quality management can develop inspection points for products during manufacturing. manufacturing knows about orders as soon as they are entered. sales can track all the details of an order.

_____ _____ are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.

time fences

If a company has an MRP program that can reflect the exact status of each item in real time, this program is called? A peg record An inventory transaction file A net change MRP system A bill-of-material system

A net change MRP system

From the highest level planning at the top to the lowest level planning at the bottom, rank the following. Aggregate planning Master production schedule Material requirements planning

Aggregate planning Master production schedule Material requirements planning

If a company has more units in the master production schedule than firm customer orders, the residual is called? Liquid inventory Available to promise Ready to ship Customer overstock

Available to promise

A(n) _____ _____ _____ system is a computer system that integrates application programs from the functional areas of a firm.

E R P

Which of the following is/are a part of an MRP record? Multiple select question. Scheduled repairs Raw material receipts Gross requirements Net requirements Planned order receipts

Gross requirements Net requirements Planned order receipts

______________ are the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule. Lot sizes Least total cost Demand numbers Economic order quantity

Lot sizes

Projected balance, the amount of inventory expected at the end of a period, is calculated using which equation? Projected available balance = sum of on-hand inventory + gross requirements - scheduled receipts + planned orders Projected available balance = sum of on-hand inventory + gross requirements - scheduled receipts - planned orders Projected available balance = sum of on-hand inventory + gross requirements + scheduled receipts - planned orders Projected available balance = sum of on-hand inventory - gross requirements + scheduled receipts + planned orders

Projected available balance = sum of on-hand inventory - gross requirements + scheduled receipts + planned orders

The first step in the MRP explosion process is? Retrieve the gross requirements for end items from the master schedule. Place part orders for net requirements. Calculate the lead times for all products that have been schedule on the master schedule. Identify the inventory on hand for all parts.

Retrieve the gross requirements for end items from the master schedule.

A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material? Partial bill-of-material Modular bill-of-material Deluxe bill-of-material Super bill-of-material

Super bill-of-material

Which of the following is NOT a part of the material requirements planning system? Master production schedule Supplier delivery schedule Bill-of-materials Inventory records

Supplier delivery schedule

Lumpiness, or the tendency for uneven production, further down the creation sequence is cause by items being withdrawn from inventory in single items. not possible with an ERP system in place. caused by items being withdrawn from inventory in lots.

caused by items being withdrawn from inventory in lots.

Using complex lot-sizing techniques, larger lot sizes can cause an increase in __________, complicating plant logistics. inventory setup costs supplier costs demand

inventory

The master production schedule typically deals with end items, but can be broken down to __________ if the item is large or expensive. inexpensive components work-in-process major subassemblies single use

major subassemblies

After finding gross requirements, the next step in the MRP explosion process references inventory on hand and scheduled orders to calculate _____ requirements.

net

Which of the following would be located on the MPS plan? Multiple select question. vehicle engine purchased for a production line. pens ordered from an office supply company. pen caps ordered by a pen manufacturer from a supplier. a new vehicle purchased from an automotive dealer.

pens ordered from an office supply company. a new vehicle purchased from an automotive dealer.

Which of the following is not a lot sizing technique used in MRP systems? Fixed time costs Economic order quantity Lot-for-lot Least total costs

Fixed time costs

Which of the following are sources of demand for products in a material requirements planning system? Multiple select question. Inter-department transactions. Customer orders that have been canceled. Customer orders from sales personnel. The master production schedule.

Inter-department transactions. Customer orders from sales personnel.

At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as low-level coding system. product part matrix. bill-of-material. time buckets.

time buckets.

The inventory records file contains information such as Multiple select question. item description. list of authorized suppliers. lead time. planned order releases. safety stock.

item description. lead time. planned order releases. safety stock.

If ordering costs and setup costs remain constant then _________ is the easiest method for lot sizing. the lowest total cost method any method the least unit cost method the lot-for-lot method

the lowest total cost method

True or false: A least total cost lot sizing technique is a dynamic approach that continually looks for an optimal lot size where carrying costs and ordering costs are close to equal.

True

Which of the following statements best characterizes an MRP system? A system-driven logic that allows a company to tie the production functions together from a material planning and control view. An independent demand system that helps a company to prioritize customer orders based on profit potential. A system that specifies the best transportation mode for inbound materials. A system-driven approach to determine which suppliers are likely meet delivery due dates.

A system-driven logic that allows a company to tie the production functions together from a material planning and control view.

When safety stock is needed, what is reduced by the safety stock? Projected available balance Forecast for last period On-hand balance Demand from sales

On-hand balance

The file containing the complete product description, parts listing, quantity needed and product build sequence is called? The peg record The bill-of-material The inventory log The MPS

The bill-of-material

Which of the following is/are issues a master scheduler must consider? Multiple select question. Trade-off manufacturing, engineering and marketing conflicts. Be involved with customer order promising. The firms financing plans. Never lose sight of the aggregate plan. Adjust the raw material supply schedule as needed.

Trade-off manufacturing, engineering and marketing conflicts. Be involved with customer order promising. Never lose sight of the aggregate plan.

The file created by retracing a material requirement upward in the product structure to identify each parent item that created the demand is called a _____ record.

peg