SCM 4362 Exam 3 Review

Which of the following is an assumption commonly made in using MRP lot-sizing procedures?

All of the options are assumptions commonly made in using MRP lot-sizing procedures.

Which of the following statement is(are) true in ROP analysis?

All statements are true

PAC is located in which part (phase) of the MPC framework?

Back end

In Theory of Constraints, which of the following is represented by "drum"?

Bottleneck resource

The Theory of Constraints (TOC) approach is also referred to as

Drum - Buffer - Rope

A CR (Critical ratio) > 1 of a job implies that the job is already late. (T/F)

False

As the service level increases, the probability of not running out of stock during a cycle decreases. (T/F)

False

EOQ inventory models are basically concerned with the timing of orders. (T/F)

False

Everything else remaining the same, if Lead Time (LT) increases, ROP will decrease. (T/F)

False

In MRP, the only source of uncertainty is supply. (T/F)

False

In a TOC system, inventory buffers before bottleneck resources are eliminated. (T/F)

False

In a single machine job shop, the makespan depends on the rule used for scheduling. (T/F)

False

Inventory items that are found at many points in a supply chain, including finished goods in factories, field warehouses, and distribution centers; spare-parts inventories; office and factory supplies; and maintenance materials are referred to as dependent demand inventories. (T/F)

False

Johnson's rule when applied in a two-machine case will provide minimum average lateness. (T/F)

False

KBB will provide the minimum total cost only if the net requirements in MRP are lumpy. (T/F)

False

Lead times are typically made up of operation or machine run time per piece × lot size. (T/F)

False

Short term capacity planning should be driven by identification and management of non-bottlenecks. (T/F)

False

TOC stands for Theory of Operating Controls. (T/F)

False

The Critical Ratio rule uses the information about the processing time of the job in the current work center only. (T/F)

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. (T/F)

False

The economic order quantity (EOQ) lot-sizing technique uses the "square root formula" to balance setup cost, carrying cost, and cost of stockouts. (T/F)

False

The objective of inventory management is to minimize the cost of holding inventory. (T/F)

False

The primary consideration in the development of lot-sizing procedures for MRP is the nature of the gross requirements data. (T/F)

False

Which one of the following reasons creates a pressure for reducing inventories?

High interest or opportunity cost

Priority sequencing rules determine which of the following? I- Allocation of goods to customers II- Which machine to service next? III- Which job to work on at the work center?

III only

Which of the following statement is false?

Johnson's rule will minimize average job completion (flow) time in two machine case

Which of the below lot-sizing procedures provide an optimal solution in MRP lot-sizing?

KBB

Which one of the following lot-sizing rules guarantees an optimal solution when demand is constant?

KBB & EOQ

Freezing the schedule is one way of mitigating

MRP system nervousness

Which of the below activities in MPC provide direct input to PAC?

Material Requirements Planning

The lowest planning and control level in MPC is:

PAC

Which one of the following is not an assumption of the basic EOQ model?

Quantity discounts can be taken advantage of for large lot sizes.

Practical application of the Theory of Constraints involves the implementation of all of the following steps except

Reduce the capacity at the bottleneck(s).

Which sequencing rule ignores all due date information as well as all information about work remaining?

SPT

What type of stock provides protection against irregularities or uncertainties in an item's demand?

Safety stock

A critical information service provided by MRP is apprising the SFC systems of all changes in material plans. (T/F)

True

Demand for raw materials and component items is derived demand, calculated exactly once a firm has the MPS. Therefore, items contained in manufacturing inventories is called dependent demand inventory. (T/F)

True

In TOC, bottleneck work centers are scheduled using finite loading techniques. (T/F)

True

KBB sometimes may yield the same total cost (cost of ordering + cost of carrying) as when some other Lot sizing method is used. (T/F)

True

One component of the holding cost of inventory is interest. (T/F)

True

Sequencing rules simply prioritize jobs at work centers without reference to the capacity. (T/F)

True

The SPT rule represents the best way to pick the next job to run, if the objective is to minimize average time per job, to minimize average number of jobs in the system, or to minimize average job lateness. (T/F)

True

The Theory of Constraints scheduling loads work centers to full capacity by using finite scheduling. (T/F)

True

The primary connection between PAC and the rest of the MPC systems comes from material requirements plans. (T/F)

True

The primary reason for keeping inventories low is that inventory represents a temporary monetary investment in goods on which a firm must pay interest. (T/F)

True

The process with the least capacity is called a bottleneck. (T/F)

True

The quantities and timings for planned order releases are determined via MRP logic using the inventory records, the gross requirements data, and a quantity-determination (lot-sizing) procedure. (T/F)

True

The routing specifies each operation to be performed to make the part and which work center will perform the operation. (T/F)

True

Variability in demand and/or lead time can be compensated for by safety stock. (T/F)

True

When finite scheduling through bottleneck resources is complete, the result is

a doable MPS

The general objective of all MRP lot-sizing procedures is to

balance inventory-related costs to achieve a low total cost requirement schedule.

According to Theory of Constraints, buffers should

be actively managed

In an ABC classification of inventory items which of the following is false?

class B items have a lower monetary value than class C items.

The lot-for-lot (L4L) procedure

creates order quantities that are exactly equal to net requirements.

In Theory of Constraints, "exploit the bottleneck(s)," suggests

creation of a schedule that maximizes the throughput of the bottlenecks.

If no variations in demand or lead time exist, the ROP will equal

demand during lead time.

The economic order quantity (EOQ) procedure

is based on the assumption of constant uniform demand.

Using the Theory of Constraints scheduling logic in simulation mode can help

negotiate achievable delivery dates and meet customer service goals.

Which of the following statements is correct about implicit enumeration?

only promising alternatives are judiciously selected & evaluated.

One way of dealing with the shop-floor complexity is by

priority sequencing rules

Examining realistic, multiple-machine, dynamic scheduling situations is possible by using

simulation

Which one of the following would not be a factor in determining the reorder point?

the EOQ

Theory of Constraints scheduling combines data in which of the following pairs?

the bill of materials (BOM) file with data in the routing file

The Stock-out probability is

the probability that inventory will not be sufficient to meet demand during the cycle

The Stock-out probability is:

the probability that inventory will not be sufficient to meet demand during the cycle