Ch 9: Material Requirements Planning

MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item

TRUE

MRP is based on dependent demand

TRUE

MRP is most valuable where a number of products are made in batches using the same productive equipment

TRUE

The three main inputs to an MRP system are the bill of materials, the master schedule and the inventory records file.

TRUE

The time-phased plan specifying how many and when the firm plans to build each end item is called the master production schedule (MPS).

TRUE

When implemented correctly, MRP links all areas of the business.

FALSE

A master production schedule is an input to a material requirements planning (MRP) system

TRUE

An input to the material requirements planning (MRP) system is an inventory records file.

TRUE

A modular bill of materials is the term for an item that can be produced and stocked as a subassembly.

TRUE

Lot-for-lot (L4L) is the most common lot sizing technique.

TRUE

Manufacturing firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product

TRUE

Low level coding in MRP indicates the exact status of each item managed by the system in "real time."

FALSE

MRP stands for Manufacturing Requirements Planning

FALSE

The MRP program performs its analysis from the bottom up of the product structure trees, imploding requirements level by level.

FALSE

The customer grace period is a time-span having some specified level of opportunity for the customer to make changes.

FALSE

The economic order quantity (EOQ) lot sizing technique produces or acquires exactly the amount of product that is needed each time period with none carried over into future periods.

FALSE

A BOM file is often called a product structure file or product tree because it shows how a product is put together.

TRUE

You have just performed a CPM Analysis and have found that more than one path through the project network has 0 slack values. What can you conclude?

You have multiple critical paths.

A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations.

TRUE

Computing the quantity of each component that goes into a finished product can be done by expanding (or exploding) each item in a product structure file and summing at all levels.

TRUE

In a net change MRP system requirements and schedules are updated whenever a transaction is processed that has an impact on the item.

TRUE

MRP provides the schedule specifying when each part and component of an end item should be ordered or produced

TRUE

MRP stands for Material Requirements Planning

TRUE

Net change MRP reflects the exact status of each item managed by the system in "real time."

TRUE

Net change MRP systems are "activity" driven.

TRUE

Projected available balance is the amount of inventory that is expected as of the beginning of a period.

TRUE

The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to become more "lumpy."

TRUE

The economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set-up cost and carrying cost.

TRUE

The least total cost method (LTC) lot-sizing technique calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal.

TRUE

The least unit cost method of lot-sizing technique adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost.

TRUE

The master production schedule states the number of items to be produced during specific time periods

TRUE

Time fences are periods of time having some specified level of opportunity for the customer to make changes.

TRUE

In a Gantt chart the horizontal axis is usually which of the following?

Time

"Projected available balance" is a term referring to unsold finished goods inventory.

FALSE

A modular bill of materials includes items with fractional options.

FALSE

An input to the material requirements planning (MRP) system is an exception report.

FALSE

An output of MRP is a bill of materials (BOM) file.

FALSE

Generally, determining lot sizes in MRP systems is simple.

FALSE

In a net change MRP program, a change in one item will result in a completely new inventory plan and schedule for every item in the master production schedule.

FALSE

In a net change MRP system requirements and schedules are considered rigid and never updated.

FALSE

MRP is least valuable in industries where a number of products are made in batches using the same productive equipment

FALSE

The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to smooth out and become even over time.

FALSE

The economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set-up cost, carrying cost and cost of stock-outs.

FALSE

The least unit cost method (LUC) lot-sizing technique calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal.

FALSE

The least unit cost method of lot-sizing adds ordering, stock-out and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost.

FALSE

The lot-for-lot (L4L) lot sizing technique minimizes carrying cost by taking into account setup costs and capacity limitations.

FALSE

The time-phased plan specifying how many and when the firm plans to build each end item is called the Materials Requirements Plan (MRP.)

FALSE

Which of the following is an input file necessary to run an MRP system?

Inventory records file