OM Chapter 4 quiz

3 major lot sizing techniques

-lot-for-lot -economics order quantity (EOQ) -periodic order quantity (POQ)

Zum-zum Inc., an outfit that produces birthday celebration gadgets, is trying to implement an MRP along with an order sizing method which minimizes costs. Setup cost is $200 for each order and holding cost is $2/period. If each period is 1 week, gross requirements are 270 units per 10 weeks, and there are 6 planned order releases for every 10 weeks, then the cost of the orders for an entire year is $____, using the lot-for-lot method. Assume that lot-for-lot is computed as though the usage will occur continually throughout the year. -A) 6240 -B) 3796 -C) 7596 -D) 2700 -E) 5200

A. 6240

Which of the following lot-sizing techniques results in the lowest holding costs? -A) lot-for-lot -B) EOQ -C) part-period balancing -D) Wagner-Whitin algorithm -E) the quantity discount model

A. Lot-for-lot

In MRP, system nervousness is caused by _____. -A) management's attempt to continually respond to minor changes in production requirements -B) the use of the lot-for-lot approach -C) management's marking part of the master production schedule as "not to be rescheduled" -D) the use of phantom bills of material -E) management's attempt to evaluate alternative plans before making a decision

A. management's attempt to continually respond to minor changes in production requirements

MRP II stands for: -A) material resource planning. -B) management requirements planning Version II. -C) management resource planning Version II. -D) material revenue planning. -E) material risk planning.

A. material resource planning.

"System nervousness" of the MRP schedule is best summarized as ____. -A) the reaction to a large number of minor changes that may introduce instability into the purchasing and production departments -B) the excessively short periods for production, say days instead of weeks -C) too many net requirements in the production phases of the MRP schedule -D) insufficient safety stock in the purchasing phases of the MRP schedule -E) infeasible lead times in lot-for-lot

A. the reaction to a large number of minor changes that may introduce instability into the purchasing and production departments

All of the following are disadvantages of ERP, except ____, which is an advantage. -A) They involve an ongoing process for implementation, which may never be completed -B) They have software that is off-the-shelf coding. -C) Expertise in ERP is limited, with staffing an ongoing problem. -D) They are so complex that many companies cannot adjust to them. -E) Implementation may require major changes in the company and its processes.

B. They have software that is off-the-shelf coding.

Each R requires 2 of component S and 1 of part T. The lead time for assembly of R is 3 days. The lead time for the manufacture of S is 5 days. The lead time for the manufacture of T is 10 days. The cumulative lead time for R is __________ days. -A) 6 -B) 9 -C) 13 -D) 17 -E) cannot be determined

C. 13

Four A washers, Five B washers, Two C bolts, and a D bolt are required to make one Grill parts kit. If 100 grill part kits are needed then ____ more washers than bolts will be used. -A) 1200 -B) 500 -C) 600 -D) 800 -E) 400

C. 600

In a product structure diagram: -A) parents are found only at the top level of the diagram. -B) parents are found at every level in the diagram. -C) children are found at every level of the diagram except the top level. -D) all items in the diagrams are both parents and children. -E) all of the above.

C. children are found at every level of the diagram except the top level.

A tactic for load smoothing in MRP include any of the following, except ___. -A) send pieces to the second operation before the entire lot is completed on the first operation -B) send the lot to two different machines for the same operation -C) lot-for-lot technique -D) break up the order and run part of it ahead of schedule.

C. lot-for-lot technique

A master production schedule specifies _____. -A) the raw materials required to complete the product -B) what component is to be made, and when -C) what product is to be made, and when -D) the labor hours required for production -E) the financial resources required for production

C. what product is to be made, and when

Which system extends MRP II to tie in customers and suppliers? -A) MRP III -B) JIT -C) IRP -D) ERP -E) Enhanced MRP II

D. ERP

It is week 1 and there are currently 20 As in stock. The MPS calls for 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120. As each A has a lead time of 1 week when and how large of an order should be placed to meet the requirement of 300 As? -A) Week 1, 300 As -B) Week 1, 40 As -C) Week 5, 40 As -D) Week 4, 40 As -E) Week 4, 300 As

D. Week 4, 40 As

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(n) ____. -A) net requirements document -B) resource requirements profile -C) aggregate plan -D) master production schedule -E) bill of material document

D. master production schedule

Demand for a given item is said to be dependent if ____. -A) it originates from the external customer -B) there is a deep bill of material -C) the finished products are mostly services (rather than goods) -D) there is a clearly identifiable parent -E) the item has several children

D. there is a clearly identifiable parent

-expects a known constant demand and MRP systems often deal with unknown and variable demand -use when the demand is constant and setup costs are high

economic order quantity (EOQ)

-integrated database software systems to integrate all activities within a firm -Ex: Edwards, SAP, Baan, JD

enterprise resource planning (ERP)

T/F: MRP can be used for scheduling products with variable lead times.

false

-orders just what is required for production based on net requirements -may not always be feasible -if setup costs are high, it can be expensive -no inventory -use whenever economical -lowest holding cost

lot-for-lot technique

planning and scheduling technique used for batch production of assembled items

material requirements planning (MRP)

-orders quantity needed for a predetermined time period interval -POQ = EOQ / average demand per period -order quantity set to cover the interval -no extra inventory -not always optimal -good when setup costs are high

periodic order quantity (POQ)

T/F: While ERP may provide a strategic advantage over competitors, it is often so complex that many companies cannot adjust to it.

true