chapter 9 materials planning

Enterprise Resource Planning (ERP)

A computer system that integrates application programs in accounting, sales, manufacturing, and the other functions of a firm.

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.

In which of the following industry types would MRP provide high benefits?

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

In Industry, A bill-of-material also goes by the acronym ______

BOM

Which is the correct equation used to calculate economic order quantity (EOQ)?

EOQ= √(2DS/H)

Which of the following is/are a part of an MRP record?

Gross requirements Planned order receipts Net requirements

When safety stock is needed, what is reduced by the safety stock?

On-hand balance

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

Which of the following is NOT a part of the material requirements planning system?

Supplier delivery schedule

The file containing the complete product description, parts listing, quantity needed and product build sequence is called?

The bill-of-material

The next level in the planning process down from an aggregate plan is called?

The master production schedule

Outside of determining parts, components, and materials, MRP provides

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

master production schedule

a time-phased plan specifying how many end items the firm plans to build, and when.

The master production schedule is used to plan

end items.

An _________ ________ __________ system is a computer system that integrates application programs from the functional areas of a firm

enterprise resource planning

Finished goods purchased by individuals external to the organization are considered dependent demand items

false

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

false

Which of the following is not a type of time fence described in the text?

fence

Which of the following is NOT a long sizing technique used in MRP systems

fixed time costs

A major drawback with lot-for-lot sizing is?

high holding costs

Using complex lot-sizing techniques, larger lot sizes can cause an increase in __________, complicating plant logistics.

inventory

A material requirements planning system interfaces with the master production schedule, bill-of-materials file and _________ _________ file

inventory records 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 cost (LTC) is the influence by the

length of the planning horizon.

______________ are the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule.

lot sizes

Setting planned orders to match the net requirements exactly is what type of lot sizing technique?

lot-for-lot

The master production schedule typically deals with end items, but can be broken down to __________ if the item is large or expensive.

major subassemblies

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 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

Which of the following would be located on the MPS plan?

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

An EOQ lot sizing technique will try to minimize the sum of which of the following costs given a fairly constant demand?

setup holding cost

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

slushy

bill of materials

the complete product description, listing the materials, parts, and components, and also the sequence in which the product is created.

material requirements planning

the logic for determining the number of parts, components, and materials needed to produce a product.

If ordering costs and setup costs remain constant then _________ is the easiest method for lot sizing.

the lowest total cost method

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

time buckets

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

time fence

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

time fences

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 are sources of demand for products in a material requirements planning system?

-Customer orders from sales personnel. -Inter-department transactions.

Which of the following is true about MRP?

-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.

Which of the following is/are issues a master scheduler must consider?

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

The inventory records file contains information such as

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

Some benefits of an ERP system are

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

available to promise

a feature of MRP systems that identifies the difference between the number of units currently included in the master schedule and the actual (firm) customer orders.

Least unit cost provides _________ as an advantage when taking variable ordering costs and setup costs into account.

a more complete analysis

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

net change systems

an map system that calculates the impact of a change the map data (the inventory status, BOM, or master schedule) immediately.

If a company has more units in the master production schedule than firm customer orders, the residual is called?

available to promise

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

batches

Lumpiness, or the tendency for uneven production, further down the creation sequence is

caused by items being withdrawn from inventory in lots.