MGT 301 Chapter 14

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 ___________. ANSWER 60 72 200

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. ANSWER 6 8 10

8

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

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

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

Adds in additional capacity

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

Cost of individual components

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

It includes inventory on hand

Which of the following is false concerning enterprise resource planning? ANSWER It shares common data and practices across the enterprise. It provides and accesses information in a real-time environment. It is inexpensive to implement.

It is inexpensive to implement.

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

Lot-for-lot

Which of the following lot-sizing techniques results in the lowest holding costs? ANSWER Part period balancing Lot-for-lot Economic order quantity

Lot-for-lot

MRP II is accurately described as: ANSWER enhanced MRP that includes all elements of the supply chain MRP augmented by other resource variables MRP software designed for services

MRP augmented by other resource variables

Which of the following is not a key benefit of MRP? ANSWER Improved response to customers Faster response to market changes Quality increases

Quality increases

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

Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling.

Enterprise Resource Planning __________. ANSWER automates and integrates the majority of business processes seldom requires additional software does not integrate well with other functional areas beyond operations

automates and integrates the majority of business processes

Material requirements planning (MRP) does not consider __________. ANSWER time buckets capacity service organizations

capacity

The phrase "demand related to the demand for other products" describes __________. ANSWER a dependent variable dependent demand recursive demand

dependent demand

In MRP, system nervousness is caused by __________. ANSWER the use of the lot-for-lot approach management's attempt to evaluate alternative plans before taking action management's attempt to continually respond to minor changes in production requirements

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 __________. ANSWER bill of material master production schedule planning bill

master production schedule

The __________ is the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. ANSWER master production schedule purchase order bill of material

master production schedule

Linking a part requirement with a parent component that caused the requirement is referred to as: ANSWER net requirement planning leveling pegging

pegging

Distortion in MRP systems can be minimized when safety stock is held at the __________. ANSWER raw material level work-in-process level any inventory point

raw material level

All of the following are advantages of enterprise resource planning except it __________. ANSWER increases communication and collaboration between business units worldwide can provide a strategic advantage over competitors requires additional training

requires additional training