Material Requirements Planning
How do gross requirements differ from net requirements? Answers Gross requirements are a direct feed from the master production schedule. Gross requirements are frozen within the demand time fence. Gross requirements consider available inventory but not scheduled receipts Gross requirements do not consider available inventory or scheduled receipts.
Gross requirements do not consider available inventory or scheduled receipts. Rationale Gross requirements do not net available inventory receipts from the value.
Determining what is required, how much is required, and when it is required is a key function of what manufacturing planning and control process? Answers Material requirements planning Master planning Capacity requirements planning Demand management
Material requirements planning Rationale Determining the answers to these questions is a core objective of material requirements planning: to determine the materials needed.
Which of the following statements is true about the material requirements planning process? Answers Planned orders create net requirements for components. Net requirements create gross requirements for components. Planned orders create gross requirements for components. Gross requirements create net requirements for components.
Planned orders create gross requirements for components. Rationale Planned orders for a parent become the gross requirements for the component. Net requirements do not necessarily equal planned orders due to lot sizing.
Significant reductions in which of the following lead times has the most positive impact on material planning? Answers Cumulative lead time Cycle lead time Production lead time Supplier lead time
Production lead time Rationale Significant reductions in production lead time indicate that the company is implementing improvements in several areas. This simplifies material planning.
During MRP record balancing, if no safety stock is specified, when is the first net requirement triggered? Answers When projected available is less than the lot size When projected available is less than the gross requirements for the next period When projected available first becomes negative When projected available first becomes zero
When projected available first becomes negative Rationale 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.
The inventory for a dependent demand item was incorrect during the last cycle count, and there is no safety stock. Which date from material requirements planning (MRP) is of most use to the material planner to ensure availability of the part? Answers When the next cycle count will take place When the next gross requirement will occur When the part's next scheduled receipt is scheduled When the next planned order is scheduled
When the next planned order is scheduled Rationale The date of the planned order is when MRP has determined that inventory will be zero and a new order will be required.
A customer has ordered 80 units of a new product that is particularly difficult to manufacture: a device screen that has a 40% success rate of not breaking during construction. To meet the customer's acceptable level of quality, the work center needs to produce how many units? Answers 80 134 160 200
200 Rationale The yield is the amount of good or acceptable material available after the completion of a process. The number of units to produce is calculated by dividing the number of units ordered by the work center's yield; in this example, 80/0.4 = 200.
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: Answers 198. 200. 201. 202.
202. Rationale 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.
There is a scheduled receipt in week 4 for an item with a two-week lead time. What can be inferred from this information? Answers This item has yet to be released. The MRP grid should show a corresponding planned order release in week 2. The grid should show a corresponding planned order receipt for week 4. A firm planned order must have been used to provide more lead time.
A firm planned order must have been used to provide more lead time. Rationale The item has a two-week lead time, so it should still exist as a planned order receipt for week 4, with a corresponding planned order release in week 2. However, it has already been released, and there will be no planned order release or receipt shown any more. A firm planned order must have been used to provide more lead time than the standard, for example, due to production quality issues that need to be resolved.
What document shows the component parts and number of components needed to make one unit of the part? Answers Material requirements plan Routing sheet Material requisition Bill of material
Bill of material Rationale According to the APICS Dictionary, a bill of material is "a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly, showing the quantity of each required to make an assembly."
Why will material requirements planning check for available inventory of a purchased part in an engineer-to-order environment? Answers Because checking for available inventory can identify inventory inaccuracies Because the part may be in stock for another customer order and can be reallocated to this order Because a previous order of the part may have residual inventory from lot size or price break Because it is possible that the item was stocked at one time and is now considered non-stock
Because a previous order of the part may have residual inventory from lot size or price break Rationale If there was a minimum purchase quantity or a price break, there may have been excess inventory. A cancelled customer order could also result in residual inventory.
What does it mean when a material requirements planning (MRP) planned order is released? Answers The item on the order must be scheduled. Work has begun on the item referenced. Authorization has been given to manufacture or purchase the item. The item on the order has been completed and placed in stock.
Authorization has been given to manufacture or purchase the item. Rationale When the manufacturing or purchasing planner has been authorized by the MRP output, the planner can release planned purchasing and manufacturing orders.
Which two of the following action messages may be generated by material requirements planning (MRP)? Answers Cancel the order and change the lot size Cancel the order and release the order Cancel the order and generate the overload Change the lot size and release the order
Cancel the order and release the order Rationale "Cancel the order" and "Release the order" are valid MRP action messages because they refer to order scheduling and management.
A lead-time offset is a technique used in material requirements planning (MRP) where a planned order receipt in one time period will require the release of that order: Answers in a later time period based on the lead time for the item. in an earlier time period based on the lead time for the finished product. in a later time period based on dynamic load on the shop floor. in an earlier time period based on the lead time for the item.
In an earlier time period based on the lead time for the item. Rationale A lead-time offset is a technique used in MRP where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item.
What is a principal function of MRP? Answers Plan and control orders released to the factory to ensure valid due dates are met Provide engineering change notice information to engineering Provide safety lead time to ensure supplier delivery dates are met Provide accurate planned order loading for use by RCCP
Plan and control orders released to the factory to ensure valid due dates are met Rationale The other answers are incorrect because MRP provides accurate planned order loading for capacity requirements planning, not RCCP; safety lead time simply is a technique for buffering lead time. Engineering issues engineering change notices, which affect the product structures of assemblies that are scheduled by MRP.
Material requirements planning has identified 20 C-item purchase orders that should be de-expedited by two weeks. Each order averages a two-month supply. Which of the following actions is most appropriate for the planner to take? Answers Release the de-expedite message to the buyer. Receive the materials on the original due date. Release the de-expedite message to the buyer and the supplier. Release change orders to the buyer and the supplier.
Receive the materials on the original due date. Rationale These are C items and of low value. It will cost more to de-expedite 20 purchase orders than to simply receive them, as there will be little impact on carrying cost.
There are no planned order releases in week 1, but there is a planned order release for 50 As in week 2. The As have a one-week lead time. After advancing forward one week in time, what action will be recommended in the action time bucket? Answers Receive planned order receipt of 50 As. Not enough information was provided to answer the question. Release planned order release of 50 As. No action.
Release planned order release of 50 As. Rationale The action time bucket is the current period 1. Right now there is nothing in the action time bucket. However, next week, the current week 2 will become week 1 and will become the action time bucket. Therefore, the planned order release for 50 As will be recommended for release.
What should happen in the material requirements planning system if delivery dates change due to purchasing or delivery delays? Answers Shift the items to the slushy zone to give them more time. Replanning should be done to keep plans current. Get master scheduler approval to change the plan, because it is in the frozen zone. Nothing should be done, as there should be slack time built in and the plan shouldn't change.
Replanning should be done to keep plans current. Rationale Changes in required delivery dates and delays in purchasing and component deliveries are all examples where replanning would be needed in the material requirements planning system. A system objective is to keep priorities current with changing conditions.
The scheduled receipt in the information provided below represents a purchase order. What would material requirements planning recommend? Answers Reducing the quantity of the order Expediting the order Rescheduling the order to period 2 Rescheduling the order to period 3
Rescheduling the order to period 2 Rationale The system would recommend rescheduling to period 2, as there is enough stock on hand to cover both safety stock and gross requirements in period 1. This recommendation may well be ignored by the supplier due to the close time frame and the cost associated with rescheduling.
A company has a historical 2% failure rate at final test. The failed units cannot be reworked. Which of the following information should be used in material planning? Answers Yield is 2% and is accounted for as an inventory master field. Scrap is 2% and is accounted for as an addition to the order quantity. Yield and scrap are basically irrelevant with a stocked item. Safety stock of 2% should be statistically calculated for each part.
Scrap is 2% and is accounted for as an addition to the order quantity. Rationale Scrap is "material outside of specifications and possessing characteristics that make rework impractical" (Dictionary). The scrap (failure) rate of this process is 2%, which needs to be factored into the bill of material for this item. If this is done correctly, there would be additional material added to the work order to account for the anticipated scrap.
Based on the information below, in what week would a planned order release be generated to satisfy the net requirement? Lead time: 3 weeks Order quantity: 100 Net requirement exists in: week 6 Net requirement quantity: 150 Answers Week 1 Week 2 Week 3 Week 6
Week 3 Rationale Because the net requirement exists in week 6, the planned order release is offset by the lead time of three weeks. Thus, the planned order release will be generated in week 6 - 3 weeks = week 3.
What is the primary purpose of the bill of material in material requirements planning (MRP)? Answers To outline the production process in detail To provide a structure for the explosion process To provide costing information To generate a where-used list for all components
To provide a structure for the explosion process Rationale MRP uses the bill of material to multiply the requirements by the usage requirements throughout the product structure.
The relationship for all components at the same level in the bill of material to be available at the same time is: Answers a parent-child relationship. component availability. a horizontal dependency. a vertical dependency.
a horizontal dependency. Rationale Horizontal dependency is the relationship between components at the same level in the bill of material.
Low-level codes are maintained by the bill of material system because they: Answers enable the material requirements planning explosion to be performed more accurately. simplify the maintenance process when a make part is changed to a buy part. simplify the update process when phantom levels are included in the bill of material. are unknown until the material requirements planning explosion process is completed.
enable the material requirements planning explosion to be performed more accurately. Rationale The low-level code enables the explosion process to more effectively compute total requirements for items.
