Supply Questions
A company packages product in units of 100 per carton. Production yield averages 99%. What is the order quantity transmitted from master production scheduling (MPS) to material requirements planning (MRP) for a period order quantity of 1,000 units? A. 1,000 B. 1,005 C. 1,010 D. 1,011
A. 1,000 MPS will transmit the required quantity to MRP. MRP would then apply the yield to the order based on existing inventory or safety stock for release to production.
Which of the following tools enables a planner to perform bottom-up replanning? A. Firm planned orders B. Backorder report C. Pegging D. Demand time fence
C. Pegging Pegging allows the buyer to determine what the source of the demand is and what the impact would be if a change is made.
Since capacity has already been validated at the master production schedule (MPS) level, why is it checked again at the material requirements planning (MRP) level? A. CRP performs a more detailed capacity check at the work center level. B. MPS uses only key work centers. C. Capacity may have changed at the various key work centers. D. Load may have changed at the various key work enters.
A. CRP performs a more detailed capacity check at the work center level. Capacity requirements planning (CRP) performed at the MRP level is a more detailed process than rough-cut capacity planning (RCCP) at the master production schedule level. Master production scheduling doesn't check key work centers, but RCCP does.
The connection(s) between the execution and control of operations and the rest of the MPC system is (are) which of the following? A. Capacity and material plans B. Capacity plan C. Material plan D. Capacity plan and business plan
A. Capacity and material plans Execution and control of operations is the execution end of the MPC system, and it deals with the execution of both capacity and material plans. Capacity and material plans alone would be insufficient. The business plan's interface is with S&OP.
In discrete manufacturing, capacity requirements planning (CRP) receives which two of the following items from material requirements planning (MRP)? A. Due dates and order quantities B. Due dates and standard hours C. Order quantities and low-level codes D. Standard hours and low-level codes
A. Due dates and order quantities For CRP to function successfully, it must receive the due dates and order quantities from MRP.
Which of the following contributes the most to a purchasing department's ability to improve supplier delivery reliability? A. Long-term contracts with suppliers B. Computerized purchase requisition system C. Use of electronic data interchange (EDI) D. Improved relations between expediters and suppliers
A. Long-term contracts with suppliers Detailing delivery reliability is part of an effective long-term contract negotiated with the supplier.
In an engineer-to-order environment, what determines the latest point at which the bill of material can be completed and released to material requirements planning? A. Longest lead time horizon to obtain any required components B. Point at which the final assembly schedule is complete C. Demand horizon from the master production schedule D. Point at which the parent bill of material is completed
A. Longest lead time horizon to obtain any required components There needs to be sufficient time to obtain any necessary components.
Which of the following is a point in the master scheduling process planning horizon that marks a boundary inside of which changes to the schedule may affect component schedules, capacity plans, customer deliveries, and cost? A. Planning time fence B. Projected available balance C. Demand time fence D. Available-to-promise
A. Planning time fence The planning time fence is a point in the planning horizon of the master scheduling process that marks a boundary inside of which changes to the schedule may affect component schedules, capacity plans, customer deliveries, and cost. Demand time fence is not as good an answer because changes inside the demand time fence are almost certain to have adverse effects in a well-planned process.
A component is defined on only one bill of material at level 6, but it also has independent demand. Which of the following statements is true? A. As a service part, the low-level code is 0. B. As a service part, the low-level code is 6. C. It is treated as a phantom subassembly. D. The item cannot be planned by material requirements planning due to the independent demand.
B. As a service part, the low-level code is 6.
When designing a new part, a company can contract with one or more suppliers in a competitive bidding situation or perform concurrent engineering with one supplier. Which of the following situations would most support concurrent engineering? A. Concurrent engineering places the cost of part design on the supplier. B. The part design is not well defined and will affect the product design. C. One supplier will ensure lower prices, shorter lead times, and higher quality. D. It is too difficult to manage multiple suppliers for a single part design.
B. The part design is not well defined and will affect the product design. Concurrent engineering enables the part design to be done in parallel, with shared knowledge.
When should suppliers be involved in the product development process? A. At the prototype stage B. After design specifications have been developed C. As soon as their involvement is productive D. Immediately prior to the beginning of production
C. As soon as their involvement is productive Suppliers should be involved in the process as soon as their involvement is productive. The other answers are incorrect because this point will vary based on the type of product and whether the relationship is tactical (involvement is later) or strategic (involvement is earlier).
The design of a product is improved by which of the following factors? A. Patents to ensure process uniqueness B. Elimination of standard part attributes C. Complete design by the supplier D. Input from the supplier
D. Input from the supplier Early input from the supplier enables better product design by ensuring component specifications, participation of the supplier in the design, and information about the capabilities of a supplier to supply components in the right quantities once production begins. Identifying process similarities helps in standardizing processes, removing overcomplexity, and reducing the number of components needed to produce the product.
A company's customer is implementing lean initiatives and has asked that the order receipt to ship time be reduced by 50%. This will have a significant impact on production and supporting departments. Which functional area should take the lead in evaluating this request and taking action? A. Senior management B. Production C. Sales D. Quality
A. Senior management Senior management must be ready to commit and assign a core team and support personnel to work on lean initiatives.
What is the primary output of the capacity requirements planning (CRP) process? A. Load profile for each work center B. List of past-due manufacturing orders C. Planned and firm planned orders D. Final assembly schedule
A. Load profile for each work center CRP generates a load profile for each work center showing the load versus the available capacity.
What is the most likely reason for a lean manufacturing company to have only one supplier that uses kanban and returnable packaging designed for a specific part? A. Schedule and delivery are overly complicated with multiple suppliers. B. It is unlikely that multiple suppliers can be found for the same part. C. Lean manufacturing companies have only one supplier for most parts. D. Containers are owned by suppliers and must be returned to them.
A. Schedule and delivery are overly complicated with multiple suppliers. In lean manufacturing, simplicity requires that there be only one supplier for a specific part. The use of kanbans and returnable packaging is best managed with a single supplier.
An overload condition has been identified in the current period in spite of having a well-balanced final assembly schedule and material plan. What is the first action to be taken by production? A. Schedule overtime to get back on schedule. B. Delay orders that caused the overload. C. Adjust capacity planning parameters. D. Determine the reason for the overload.
A. Schedule overtime to get back on schedule. The immediate need is to resolve the existing overload using overtime.
Which of the following is true if a work center is overstated in terms of available production capacity? A. Capacity requirements planning becomes less useful as a feedback tool. B. Planned order-required dates won't match customers' order-required dates. C. Efficiency will increase. D. The company will add capacity via additional personnel, tooling, or equipment.
A. Capacity requirements planning becomes less useful as a feedback tool. Capacity requirements planning becomes less useful because it does not give accurate information and an overload condition appears to be satisfactory.
A company produces a line of handheld drills, various types of drill bits hardened to different levels, and a new fixture for different drills. These products are sold to customers through retail stores. Given the common use among these products, what is the best approach for the master scheduler to take for planning production? A. Establish modular bills of material for the drills, the drill bits, and the fixture. B. Add the fixture to the drill family group and plan using sales and operations planning. C. Plan and maintain separate bills of material for the drills, the drill bits, and the fixture. D. Enter orders for the new fixture to material requirements planning until historical demand is available for forecasting.
A. Establish modular bills of material for the drills, the drill bits, and the fixture Modular bills allow for similar products and percentages for options, which would work for each type of product.
In which of the following zones is it most difficult to respond to changes in customer demand? A. Frozen B. Danger C. Slushy D. Liquid
A. Frozen The frozen zone should be the most protected in terms of the amount of change permitted. The other answers are incorrect because there is no zone called the danger zone; in the liquid zone extensive changes can be made without causing much disruption to the MPS; in the slushy zone some change is tolerated, but changes must be controlled carefully.
The MPS typically displays the plan for which of the following? A. Individual products B. Product families C. Dependent demand items D. Product components
A. Individual products The MPS represents what the company plans to produce expressed in specific configurations, quantities, and dates. The other answers are incorrect because the MPS contains independent items, not dependent demand items; product families are planned at the S&OP level; and the MPS schedules end items.
A company that uses a functional layout produces several product families that use the same work centers, with some units being a standard design and others having custom design. Which of the following management decisions is most applicable as it relates to master scheduling? A. Level and type of inventory to stock B. Relevance of a demand time fence C. Use of a final assembly schedule D. Use of a quantity/period or flow rate
A. Level and type of inventory to stock Decisions would be required on which products to keep in stock as finished goods versus assemblies.
A purchased component has a net requirement in period 4. It has a 6-period lead time and no scheduled receipts. Which of the following actions will be the result of material requirements planning (MRP)? A. The planned order release is scheduled for period 1 and is due in period 4. B. The planned order release in period 1 is rescheduled for receipt in period 6. C. The planned order is overdue and the planner will need to delay the master production schedule. D. The planned order release is scheduled for period 2 and is overdue for release.
A. The planned order release is scheduled for period 1 and is due in period 4. MRP will assume that the plan can be executed and will provide an action to release the overdue planned order. A second action message may be given to expedite.
Which of the following is a tool for reducing material requirements planning (MRP) system nervousness? A. Time fences B. Dynamic lot sizing C. Pull signals D. Scheduled downtime
A. Time fences Nervousness in this context refers to instability when changes in higher-level records cause significant changes in lower-level schedules or orders. Devices such as time fences, which restrict changes, introduce stability into the master schedule.
A supplier that provides services such as warehousing, freight forwarding, and delivery is known as: A. a third-party logistics provider (3PL). B. an importer/exporter. C. a broker. D. a second-tier supplier.
A. a third-party logistics provider (3PL). A 3PL is a third party that provides product delivery services.
Although a company has the capability to produce a strategically important item, a question has arisen about the wisdom of outsourcing the item. In most cases, the decision to outsource, when compared with the item's strategic importance, is: A. inversely related. B. directly proportionally related. C. just a minor consideration in the overall make-or-buy decision. D. best left to marketing management.
A. inversely related. Outsourcing and the strategic importance of the process, service, or product are inversely related: The outsourcing incentive is low when the strategic importance is high.
The replacement of internal capacity and production with that of a supplier's is known as: A. outsourcing. B. outpartnering. C. capacity buying. D. buying down.
A. outsourcing.. Outsourcing is the process of having suppliers provide goods and services that were previously provided internally.
The standard hours of load placed on a resource within a time period is the: A. resource profile. B. bill of resources. C. resource driver. D. resource calendar.
A. resource profile. The resource profile is the standard hours of load placed on a resource by time period.
Generating and rewarding short-term performance improvements within organizational change: A. sidelines cynics and selfish resisters. B. should strike fear into the hearts of the naysayers. C. proves that the project champion was right. D. may be the only success within the entire project.
A. sidelines cynics and selfish resisters. Short-term performance improvements help transformations.
Planned orders from a distribution warehouse become which of the following? A. Planned orders in material requirements planning B. Gross requirements in the master production schedule C. Demand in the sales and operations plan D. Planned orders in the master production schedule
B. Gross requirements in the master production schedule Planned orders from a warehouse become gross requirements in the master production schedule during distribution requirements planning.
Which of the following changes is most likely to directly impact the master schedule? A. Extending the planning time fence by four periods B. Increasing safety stock from demand for one period to demand for two periods C. Reducing the lot size quantity by one-half D. Shortening the demand time fence by one-half
B. Increasing safety stock from demand for one period to demand for two periods Increasing safety stock will have the effect of pulling orders forward in the schedule, which may result in overload conditions or material shortages.
An assemble-to-order environment using a mixed-model production schedule has a bottleneck work center. What is the best rough-cut capacity planning approach for determining the feasibility of the master production schedule? A. Define capacity as some percentage less than 100% of rated capacity by management policy. B. Define capacity at 100% of rated capacity and utilization when the mix of demand justifies it. C. Define capacity as 85% of rated capacity to provide 15% to accept additional customer orders. D. Define capacity as rated capacity times utilization times efficiency to factor the engineering standard.
B. Define capacity at 100% of rated capacity and utilization when the mix of demand justifies it. Bottlenecks should be scheduled at the rated capacity if there is sufficient business volume to justify it.
Which of the following actions is taken first to ensure the validity of the material plan in a make-to-stock company? A. Development of the operations plan B. Development of the master production schedule C. Development of the material requirements plan D. Development of the capacity requirements plan
B. Development of the master production schedule The master production schedule is the first time in the planning hierarchy that individual products are defined by date and quantity.
Which design process attempts to meet all the needs of the stakeholders and should result in a product that can be quickly brought to the marketplace? A. Reverse engineering B. Concurrent engineering C. Prototyping D. Product benchmarking
B. Concurrent engineering Concurrent engineering refers to the simultaneous participation of all the functional areas of the firm in the product design activity.
What is the most likely reason for schedules determined in material requirements planning (MRP) to be changed in production? A. Schedules are based on often incorrect forecasts. B. Infinite loading does not account for sequencing. C. Lead times are based on standards and not actuals. D. Work center capacity has changed since planning began.
B. Infinite loading does not account for sequencing. MRP does not account for sequencing at a work center but goes by due dates only.
A company produces lawn mowers that have many options to choose: three horsepower choices, three cut widths, manual versus self-propelled options, and four color choices. Product is produced in lot quantities for retail sales and assembled-to-order for direct sales. Which of the following types of bills of material is most likely used for the two-level master scheduling? A. Multilevel B. Modular C. Single-level D. Common parts
B. Modular Modular bills (also called planning bills) would allow a percentage to be applied to each of the various options.
Which of the following best measures the production operation's contribution to delivery reliability? A. Cycle time per part B. Percentage of master schedule achieved C. Direct labor hours per product D. Number of customer complaints
B. Percentage of master schedule achieved There is a direct correlation between the percentage of the master schedule that is completed as scheduled and on-time delivery.
The firm planned order (FPO) technique may be used to achieve which of the following results? A. Prevent automatic rescheduling of planned orders by material requirements planning (MRP). B. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and reduce plant load fluctuation. C. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and increase plant capacity. D. Reduce plant load fluctuation, and trigger MRP to replan higher-level items.
B. Prevent automatic rescheduling of planned orders by material requirements planning (MRP), and reduce plant load fluctuation. When a planned order is firmed in the material requirements plan, it is frozen and will not be changed by the MRP processor. Since it is frozen, it will help in dampening small changes in supply and demand.
A buyer asks a supplier to design a product to the buyer's specifications. Which of the following steps is the buyer not responsible for? A. Detailed product requirements B. Production of samples C. Analysis of test results D. Approval of test procedure
B. Production of samples The production of samples is the responsibility of the supplier, who will eventually make the product if tests are successful. The other three actions all are the responsibility of the buyer.
Which of the following is defined as the process of converting the MPS into the load for critical resources? A. Resource capacity planning B. RCCP C. ATP D. Multilevel master scheduling
B. RCCP Rough-cut capacity planning (RCCP) is defined as the process of converting the MPS into capacity needs for critical resources: workforce, machinery, warehouse space, vendors' capabilities, and, in some cases, money. Essentially, it is a validity check for the MPS. ATP is incorrect, because it is the uncommitted portion of a company's inventory and planned production, maintained in the MPS to support customer order promising. Resource capacity planning is incorrect, because it is used to determine the load placed on resources by product families in the production plan. Multilevel master scheduling is incorrect, because it is a master scheduling technique that enables any level in an end item's BOM to be master-scheduled.
A company is expecting a one-year downturn in the economy that is likely to reduce customer demand as compared to past annual sales levels. Which of the following responses would be best in this situation? A. Increase order demand satisfied from production. B. Reduce production output and inventory levels. C. Match competitors' responses to price and lead time. D. Increase inventory levels to reduce lead times.
B. Reduce production output and inventory levels. Reducing output and inventory sustains the business strategy while addressing the effect of the economy. Increasing inventory ties up more capital in a bad economy. Matching prices may become necessary but is not implied in the question, and order demand is already being satisfied from production.
What inventory data is used by MRP? A. Planned order releases B. Scheduled receipts C. Gross requirements D. Net requirements
B. Scheduled receipts . Inventory data used by MRP are scheduled receipts and on-hand amounts. The other answers are incorrect because gross requirements come from the master production schedule or are calculated by MRP from higher level requirements; and because MRP calculates both net requirements and planned order releases.
Which of the following approaches will facilitate the smooth integration of a new product to production? A. Statistical process control B. Standardization of components C. Prototyping D. Quality function deployment
B. Standardization of components Standardization of components and processes shortens the prototyping time and learning curve, getting products to market faster.
What is the difference between an FAS and a MPS? A. The FAS addresses a shorter-term planning period than the MPS and looks at forecasted demand rather than customer orders. B. The FAS addresses a shorter-term planning period than the MPS and looks at customer orders rather than forecasted demand. C. The FAS addresses a longer-term planning period than the MPS and looks at forecasted orders rather than customer orders. D. The FAS addresses a longer-term planning period than the MPS and looks at customer orders rather than forecasted demand.
B. The FAS addresses a shorter-term planning period than the MPS and looks at customer orders rather than forecasted demand. The FAS addresses a shorter-term planning period than the MPS and looks at customer orders rather than forecasted demand.
Which of the following statements about the final assembly schedule (FAS) is true? A. The FAS is the same as the master production schedule. B. The FAS is separate from the master production schedule and serves a completely different purpose. C. The FAS is the same as the production plan. D. The FAS includes only final operations.
B. The FAS is separate from the master production schedule and serves a completely different purpose. The FAS plans and controls final assembly, which is different from the master production schedule. It is typically driven by customer demand, not the forecast, and is for end items.
Which of the following statements about capacity is true? A. Resource planning capacity is more accurate than rough-cut capacity planning due to aggregation. B. The master scheduler can schedule load above that indicated by rough-cut capacity planning. C. The number of machines in a machine shop is the primary determinant of capacity. D. Common units such as quantities or hours are used at all levels for consistency.
B. The master scheduler can schedule load above that indicated by rough-cut capacity planning. Rough-cut capacity planning is a check of only critical resources.
What is the term for the intersection of a row and a column in an MRP grid? A. Time period B. Time bucket C. Bucketless display D. Manufacturing cell
B. Time bucket The cell formed by the intersection of a row and a column is a time bucket, which summarizes the designated number of days of data for that line.
What is the primary purpose of the bill of material in material requirements planning (MRP)? A. To generate a where-used list for all components B. To provide a structure for the explosion process C. To outline the production process in detail D. To provide costing information
B. To provide a structure for the explosion process MRP uses the bill of material to multiply the requirements by the usage requirements throughout the product structure.
If an annual contract is in place, the supplier is notified of the delivery amount required by means of: A. a purchase order. B. a release. C. a blanket order. D. an advance shipment notification.
B. a release. Monthly, weekly, or daily quantities needed are communicated via releases, which may be in the form of a kanban.
Strategic sourcing is focused on: A. stable pricing. B. acquiring goods and services. C. order execution. D. transactions.
B. acquiring goods and services. Strategic sourcing should be focused on finding suppliers that provide the best value, and this can include many factors besides pricing. In fact, pricing may be the least important aspect depending on the commodity.
Measuring the order fill rate enables a company to determine: A. backorder allocations. B. customer service levels. C. throughput time. D. forecast accuracy.
B. customer service levels The fill rate measures delivery performance of finished goods.
By implementing a supplier certification program, a company should be able to eliminate: A. receiving paperwork. B. incoming inspection for parts from the supplier. C. safety stock. D. quality audits of the supplier.
B. incoming inspection for parts from the supplier Certifying a supplier means that parts would not have to be inspected.
Using phantom bills of material will result in a reduction in: A. lot sizes and product structures. B. inventory transactions and work orders. C. product structures and work orders. D. inventory transactions and lot sizes.
B. inventory transactions and work orders. Using phantom bills of material means that subassemblies are noted on the bill of material but are not stocked as assemblies, so they do not require inventory transactions.
Time fences should be viewed as a way to: A. evaluate production effectiveness. B. measure the likely impact of changing the master production schedule. C. avoid changing the master production schedule. D. maximize production.
B. measure the likely impact of changing the master production schedule. The time fence is not a barrier to change, merely an indicator of the point at which effort, time, and cost will start to becoming significant if making a change.
A manager who is committed to employee involvement typically will A. inform employees of decisions. B. seek employee input on decisions. C. tell decisions to employees. D. limit employee decisions.
B. seek employee input on decisions. The manager who is committed to employee involvement will seek employee input on decisions. To inform/tell employees of decisions and to limit employee decisions represent a command-and-control style of management and do not encourage employee involvement.
Why does capacity requirements planning use infinite rather than finite planning? A. Customer demand is inconsistent and requires variable work center capacity. B. The material requirements plan cannot provide sufficient detail for finite loading. C. Capacity requirements planning is simply a reflection of the requirements from the material plan. D. Infinite capacity matches the level of detail as defined in the planning hierarchy.
C. Capacity requirements planning is simply a reflection of the requirements from the material plan. The materials plan drives the requirements for capacity planning.
An item is being replaced on a BOM. The effectivity of the original item ends when the new item's effectivity date begins. What does this action illustrate? A. Horizontal dependence B. Parent-child relationship C. Engineering change process D. Phantom bill of material
C. Engineering change process A parent-child relationship exists between items at different levels on the BOM, making this answer incorrect. Horizontal dependency exists between two items on the same level in the BOM; thus, this answer is incorrect. A phantom BOM rarely is stocked and has a lead time of zero; its parent consumes it during manufacture, and is therefore also an incorrect answer.
The purposes of a modular bill of material include which of the following? A. Translating the sales and operations plan to the master production schedule B. Providing for easier material requirements planning processing C. Facilitating forecasting D. Minimizing inventory for unique components
C. Facilitating forecasting A modular bill of material is a type of planning bill that is arranged in product modules or options. It is often used in companies where the product has many optional features.
Which of the following elements is used to reduce system nervousness? A. Planned orders B. Economic order quantity C. Firm planned orders D. Safety stock
C. Firm planned orders Firming planned orders allows the planner to make decisions on whether small changes are important enough to react to as well as locking in order quantities and dates for various reasons.
A customer order for a quantity of 50 exists within the planning time fence. A change order has been received to increase the quantity to 100. There is a forecast in that period of 80. Which of the following changes should occur? A. Forecast quantity should not be changed; order quantity should be changed to 80 in this period and 20 in the next period. B. Forecast quantity should be changed to 120; order quantity should be changed to 100. C. Forecast quantity should not be changed; order quantity should be changed to 100. D. Forecast quantity and order quantity should both be changed to 100.
C. Forecast quantity should not be changed; order quantity should be changed to 100. Within the planning time fence, the order change can be accepted. The forecast does not change.
Which of the following is an advantage of multiple sourcing? A. Upward pressure on price if there are few other buyers B. More cooperation of new product development C. Less vulnerability to supply disruptions D. Greater economies of scale
C. Less vulnerability to supply disruptions More suppliers means less vulnerability. Single sourcing is more likely to produce more cooperation because it is likely to be a reason for entering into a single source relationship. Greater economies of scale or leverage are likely to occur if purchasing is concentrated in a single supplier. If there were few buyers and multiple suppliers, the price pressure would be downward.
Risk assessment prior to offshoring or outsourcing should analyze at a minimum which of the following attributes? A. Quality, data security, loss of control, employee attitudes, cultural differences B. Quality, intellectual property, infrastructure, employee attitudes, cultural differences C. Quality, data security, loss of control, employee turnover, cultural differences D. Quality, data security, loss of control, financial exchange rates, delivery lead times
C. Quality, data security, loss of control, employee turnover, cultural differences In a recent survey, it was revealed that these attributes, in order, were of concern when offshoring: Quality Data security Loss of control High turnover Cultural differences
Which of the following is the best reason for performing master scheduling at the narrowest point of the product structure? A. Any other point adversely affects material requirements planning. B. Any higher point contains unknown customer order uniqueness. C. There are fewer items to master-schedule at the narrowest point. D. Planning is more accurate due to aggregation of bill-of-material levels.
C. There are fewer items to master-schedule at the narrowest point. There are fewer items to schedule at this point.
The relationship for all components at the same level in the bill of material to be available at the same time is: A. component availability. B. a vertical dependency. C. a horizontal dependency. D. a parent-child relationship.
C. a horizontal dependency. Horizontal dependency is the relationship between components at the same level in the bill of material.
The production forecast A. represents the product family forecast in two-level master scheduling. B. is primarily used with master production scheduled items. C. forecasts the family ATP multiplied by option percentages. D Is based on production lead times.
C. forecasts the family ATP multiplied by option percentages. The production forecast is used with two-level master scheduling and represents the ATP (MPS minus customer orders) at the family level multiplied by the option percentage. The other answers are incorrect because the production forecast is used with a subset of master-scheduled items only; the production forecast does not represent the product family forecast; and the production forecast is not based on production lead times.
When product life cycle is a consideration, the production environment likely to have the most supplier partnerships is: A. make-to-order. B. assemble-to-order. C. make-to-stock. D. engineer-to-order.
C. make-to-stock. Make-to-stock environments have high volumes and the greatest need for single sources and strong relationships that focus on product life cycle improvements.
Material consumed in a pull environment is determined by: A. actual yield percentage. B. scheduled rate of production. C. number of units completed. D. number of customer orders.
C. number of units completed. Units complete determines the material used in a pull environment.
A work center is best described as a set of machines and/or operators that: A. produce the same products. B. produce at the same rate of output. C. perform related processes. D. perform tasks in a sequence.
C. perform related processes. A work center is a specific production area consisting of one or more people and/or machines with similar capabilities.
On-time supplier deliveries can be impacted most by: A. long lead times. B. purchase order quantities. C. supplier capacity. D. dedicated transportation carriers.
C. supplier capacity. Supplier capacity that is adequate for meeting the dates has the most impact on on-time deliveries.
A company is going to begin an aggressive sales promotion for a new make-to-stock product line that will affect most work centers. Capacity requirements planning (CRP) can best be used to determine: A. whether the company is capable of meeting the forecast. B. whether material storage can handle the expected volume. C. the timing and impact of the forecasted load. D. the number of units that can be made.
C. the timing and impact of the forecasted load. CRP will help determine when the inventory buildup will have to start to prepare for the sales promotion.
Capacity requirements planning data used to calculate available labor and machine capacity is most likely to be located in the: A. labor reporting database. B. routing operation details. C. work center data. D. capacity planning bill of labor.
C. work center data. The work center master record contains all of the data regarding the capacity properties of the productive resource. This data is used whenever any job is assigned to be completed at the work center.
A purchased assembly is destruct-tested upon receipt. The sample size is 1% of the order quantity. The purchase order quantity to satisfy a production order of 200 units is: A. 198. B. 200. C. 201. D. 202.
D. 202. Two units would be scrapped due to the testing process. Since the sample size is 1%, or 2 units, 202 would have to be ordered every time. Two would be destroyed, therefore leaving 200 for the production order - which is either an order, or a make-to-stock item.
Long-term agreements with suppliers may include which of the following? A. Tactical buying B. Required cost of goods sold C. Supplier-held inventory that the buyer owns D. Ownership exchange points
D. Ownership exchange points Ownership exchange points may be specified in long-term agreements with suppliers. Suppliers may be required to hold inventory but the supplier would own that inventory until it is needed. A supplier's prices might be specified but not their costs. Tactical buying is for commodities and is the opposite of a long-term relationship.
Which of the following actions would most likely be considered to address a missing part problem in a push environment but not in a pull environment? A. Using an alternate routing B. Working overtime C. Using an alternate part D. Partially completing an order
D. Partially completing an order Orders can be completed to the point of the missing part and then put aside until the part is available.
Material requirements planning (MRP) indicates that safety stock will be dipped into in period 2. The next order will be received in period 3 due to a component availability issue at the supplier. Which of the following actions will most likely occur? A. No action message generated by MRP, so no action from planner. B. No action message from MRP; buyer attempts to expedite order from supplier. C. Action message to reschedule order from period 3 to period 2; planner temporarily reduces safety stock quantity. D. Action message to reschedule order from period 3 to period 2; planner allows safety stock to be used.
D. Action message to reschedule order from period 3 to period 2; planner allows safety stock to be used. An action message will be generated to reschedule the order. However, as the order cannot be expedited, safety stock should be consumed. Safety stock is in place for this very purpose.
Which of the following types of demand should be input to the master schedule? A. Orders for end items B. Forecast for service parts C. Forecast for end items D. All of the above
D. All of the above All sources of demand, including service parts, forecasts, and actual customer orders, constitute demand in the master schedule.
What function may be directly involved in developing and maintaining customer-supplier relationships? A. Purchasing management B. Product engineering C. Quality management D. All of the above
D. All of the above Customer-supplier relationships involve the participation of purchasing management (which performs sourcing and purchase order management), product engineering (which defines product specifications and works with suppliers on product management), and quality management (which works with suppliers and internal purchase order inspection to ensure the highest-product quality at purchase order receipt).
Good measures of material requirements planning performance include evaluations of which of the following factors? A. Percentage of order due dates met B. Percentage of assembly orders with no shortage C. Percentage of orders started on time D. All of the above
D. All of the above. These are all valid measurements of how well material requirements planning has produced orders on time to meet the schedule, the number of orders that were delivered to manufacturing without shortages, and the number of orders that were started on time.
What can make producing an unrealistic final assembly schedule (FAS) a worse problem than producing an unrealistic master production schedule (MPS)? A. An FAS is the last step of the MPS, so there is less time to make corrections. B. The shorter planning horizon for an FAS magnifies the impact of forecasting error. C. An FAS is based entirely on forecasts. D. An FAS is based entirely on actual customer orders.
D. An FAS is based entirely on actual customer orders. The consequences of an unrealistic FAS can potentially be more severe than those of an unrealistic MPS because an FAS is based entirely on actual customer orders and has no forecasted component, meaning any change will directly impact a customer order.
In an assemble-to-order environment, how can the execution and control function help ensure a valid material plan? A. By identifying alternate routings if the primary routing is unavailable B. By maintaining bottleneck flexibility through utilizations of at least 85% C. By providing accurate efficiency and utilization factors for work centers D. By achieving on-time start and completion dates for production orders
D. By achieving on-time start and completion dates for production orders In any environment, achieving start and completion dates best supports the material plan.
What is pegging used for? A. Linking subassemblies with parent items B. Determining priorities for manufacturing C. Displaying the quantity of a component in the bill of material D. Determining the source of gross requirements
D. Determining the source of gross requirements Pegging is the ability to identify the sources of a given item's gross requirements and/or allocations.
A company makes four product lines, each with a variety of features and options. Which of the following tools would be most appropriate for the company to use to document the product configurations to be built over the next two weeks? A. Master production schedule B. Planning bill of material C. Detailed material plan D. Final assembly schedule
D. Final assembly schedule The final assembly schedule (FAS) is prepared after receipt of a customer order, as constrained by the availability of material and capacity (based on the features and options ordered). It schedules the operations necessary to complete the product assembly and states the exact set of end products to be built over the time periods.
Which of the following statements correctly describes netting logic when safety stock is involved? A. Allocations are added to on-hand inventory and safety stock to establish a beginning available balance. B. On-hand inventory should be reduced by allocations and increased by safety stock to establish a beginning available balance. C. Safety stock is classified as a requirement in the current planning period. D. If the projected available balance falls below the safety stock, material requirements planning will generate a planned order.
D. If the projected available balance falls below the safety stock, material requirements planning will generate a planned order. The netting process ensures that the projected available balance (PAB) does not drop below the safety stock. Allocations are taken from the beginning on-hand inventory first, and then the gross requirements are subtracted. If the PAB falls below the safety stock, material requirements planning generates a planned order.
In which of the following zones can changes be made with relative ease? A. Danger B. Frozen C. Slushy D. Liquid
D. Liquid In the liquid zone, extensive changes can be made without causing much disruption to the MPS. The other answers are incorrect because there is no zone called the danger zone; the frozen zone should be the most protected in terms of the amount of change permitted; and changes in the slushy zone must be reviewed for potential impact on existing supply and demand situations.
RCCP takes place at which of the following planning levels? A. Business planning B. MRP C. Strategic planning D. Master scheduling
D. Master scheduling RCCP is used to determine if sufficient capacity is available for the MPS. Strategic and business planning are incorrect because resource planning is used for strategic and business planning. MRP is incorrect because CRP is used for material requirements planning.
Specifically accounting for a finishing lead time is an element of: A. production scheduling. B. constrained scheduling. C. master production scheduling. D. final assembly scheduling.
D. final assembly scheduling. The final assembly schedule is where any special packaging and finishing operations are defined for a customer order.
A parent item has a net demand of 100 units in period 6. Its lead time is two periods. One of the components is used in quantities of 4 per unit, and it has 0 in inventory and a lead time of 1 week. It is purchased in 1,000-unit order quantities. Which of the following planned order receipts would be the result of the explosion process for the component? . A. Quantity of 400 units in period 3 B. Quantity of 400 units in period 4 C. Quantity of 1,000 units in period 3 D. Quantity of 1,000 units in period 4
D. Quantity of 1,000 units in period 4
Types of orders considered in the load distribution during capacity requirements planning include which of the following? A. Released order, purchase orders, and firm planned orders B. Released orders C. Purchase orders and firm planned orders D. Released orders and firm planned orders
D. Released orders and firm planned orders Capacity planning is concerned with production orders that have been released to production and with planned and firm planned orders.
What is a direct input into CRP? A. Preventive maintenance schedule B. Work center load report C. Dispatch list D. Routing data
D. Routing data Routing data is an input to CRP and is used to determine work centers, load, and sequence timing. The other answers are incorrect because reports and schedules of order releases are outputs; and the preventive maintenance schedule may affect available capacity, but is not a direct input to CRP.
Which of the following describes what happens when a normally dependent demand item is not included in a material requirements planning bill of material explosion? A. There is excess inventory of all of the components. B. As a dependent demand item, the item would not be included on the bill of material. C. The item doesn't require safety stock. D. The assembly is changed from a make to a buy part.
D. The assembly is changed from a make to a buy part. When an item is changed to a purchased component, the explosion stops and ignores the components.
Capacity requirements planning has been used to check the validity of the material plan, and no constraining work centers have been identified. Which of the following is most likely the reason? A. The capacity check did not include the various constraining work centers. B. Capacity requirements planning used infinite capacity rather than finite loading. C. The production operations are balanced and have no individual bottlenecks. D. The available capacity is greater than that required by the volume and mix.
D. The available capacity is greater than that required by the volume and mix. The only scenario that is known is that there is enough available capacity. Individual operations within a work center may still have bottlenecks.
Which explanation best describes when a pull system works well? A. Emphasis is on producing as much as possible. B. Production is based on a schedule. C. Decision making is centralized. D. The flow of incoming material is consistent.
D. The flow of incoming material is consistent. A pull system works well when the flow of incoming material is consistent. As variation in process flow increases, implementation of a pull system, such as lean, becomes more difficult. The other answers are incorrect because production is based on a rate called takt time that is consistent with the rate at which the customer has agreed to accept delivery, although sometimes in transfer batches; the remaining two answers are inherently untrue in a pull system.
Which two of the following conditions describe an environment that most likely will support change successfully? A. The chief executive officer spearheads the change process, and major projects are tackled first to achieve maximum benefit. B. The chief executive officer spearheads the change process, and experimentation is accepted as a part of the change process. C. The organization is under considerable internal or external pressure to improve, and major projects are tackled first to achieve maximum benefit. D. The organization is under considerable internal or external pressure to improve, and experimentation is accepted as a part of the change process.
D. The organization is under considerable internal or external pressure to improve, and experimentation is accepted as a part of the change process. Conditions that lead to support of successful change efforts in an organization include internal or external pressure to improve and acceptance of experimentation as part of the change process.
What is the role of upper management in a quality organization? A. To facilitate the quality teams B. To hire outside resources to provide quality oversight C. To supervise the quality functions and activities D. To provide resources and training for quality activities
D. To provide resources and training for quality activities The main role for upper management is to provide the resources for quality activities and provide training in quality methodologies.
Which of the following conditions is typically necessary for a successful pull production system implementation? A. Products are made to inventory. B. There are only assembly operations. C. Specialized machinery and skilled operators are used. D. Variation in demand is low.
D. Variation in demand is low. In a pull system, items are produced only as demanded for use or to replace those taken for use, so pull systems are reactive and do not "look ahead." Therefore, the pull system works best when products are stable and predictable.
During MRP record balancing, if no safety stock is specified, when is the first net requirement triggered? A. When projected available is less than the lot size B. When projected available first becomes zero C. When projected available is less than the gross requirements for the next period D. When projected available first becomes negative
D. When projected available first becomes negative The first net requirement is triggered during MRP record balancing when projected available first becomes negative. The other answers are incorrect because carrying no inventory until there is an item needed is a major advantage of MRP; because MRP generates the net requirement in the next period; and because lot size has no relation to net requirement calculation.
In a company with somewhat erratic demand levels, which of the following is of most importance to the planner in the relationship between material requirements planning (MRP) and capacity requirements planning (CRP)? A. Whether overload conditions exist B. Whether underload conditions exist C. Whether there is a balance D. Whether the plan is achievable
D. Whether the plan is achievable The objective of running CRP with MRP is to know that the plan is achievable. Knowing the other elements is important in order to help achieve the plan.
A firm planned order is used to: A. allocate material prior to the release of a customer or shop order. B. manage target inventory levels. C. schedule a purchase order contract with a supplier. D. override the standard planning parameters that have been defined.
D. override the standard planning parameters that have been defined Firming a planned order can be used to change a particular lot size or lead time that has been defined as a standard and to prevent material requirements planning from manipulating the order.
Rough-cut capacity planning checks whether critical resources are available to: A. keep track of past-due orders. B. establish the takt time of the work cells. C. create work center load capacity profiles. D. support the preliminary master production schedules.
D. support the preliminary master production schedules. Rough-cut capacity planning checks whether critical resources are available to support the preliminary master production schedules. Critical resources include bottleneck operations, labor, and critical materials.
The final assembly schedule (FAS) takes place when: A. the forecast is fixed. B. the component level is fixed. C. there are few options. D. the customer's order is received.
D. the customer's order is received. The FAS is a schedule of end items to finish the product for specific customers' orders in a make- or assemble-to-order environment.
A company's core competency is product design. They choose to outsource 100% of their prototyping, manufacturing, and distribution. This company is best defined as a: A. marketing miracle. B. focused factory. C. alliance entity. D. virtual organization.
D. virtual organization. A virtual organization is a short-term alliances between independent organizations in a potentially long-term relationship to design, produce, and distribute a product. Organizations cooperate based on mutual values and act as a single entity to third parties.
