385 Final ch 9

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BOM file is also called which of the following

Product tree

A modular bill of materials is the term for an item that can be produced and stocked as a subassembly

TRUE

Lot for Lot is the most common lot sizing technique

TRUE

MRP = Material Requirements Planning

TRUE

MRP is MOST valuable where a number of products are made in batches using the same productive equipment

TRUE

MRP is a logical, easily understandable approach to the problem of determining the number of parts, components, and materials needed to produce each end item

TRUE

MRP provides the schedule specifying where each part and component of an end item should be ordered or produced

TRUE

The EOQ lot sizing technique uses the square root formula to balance set up costs and carrying costs

TRUE

The master production schedule states the number of items to be produced during specific time periods

TRUE

The three main inputs to an MRP system are the bill of materials, the master schedule and the inventory records file

TRUE

the time phased plan specifying how many and when the firm plans to build each end item is called the master production schedule

TRUE

MRP is based on dependent demand

TRUE dependent demand is caused by the demand for a higher-level item. Tires, wheels, and engines are dependent demand items based on the demand for cars

The deeper one looks into the product creation sequence, the more the requirements of demand items tend to become more lumpy

TRUE, the requirements of dependent demand items become more and more lumpy as we go farther down the product creation sequence

A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations

TRUE- Lot for Lot is most common technique. It -sets planned orders to exactly match the net requirements -produces exactly whats needed each week with none carried over into future periods -minimizes carrying costs -does not take into account setup costs or capacity limitations

When implemented correctly, MRP links all areas of business

TRUE- MRP is the key piece of logic that ties the production functions together from a material planning and control view.

In a Net change MRP system requirements and schedules are updated whenever a transaction is processed that has an impact on the item.

TRUE- Net change MRP systems are activity driven and requirements and schedules are updates whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in real time the exact status of each item managed by the system

Net change MRP reflects the exact status of each item managed by the system in "real time"

TRUE- activity driven

Manufacturing firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product

TRUE- contains the complete product description, listing not only the materials, parts, and components, but also the sequence in which the product is created

A master production schedule is an input to a material requirements planning (MRP) system

TRUE- generally the master production schedule deals with end items and is a major input to the MRP process

Time fences are periods of time having some specified level of opportunity for the customer to make changes

TRUE- management defines time fences as having some specified level of opportunity for the customer to make changes

Net change MRP systems are "activity" driven

TRUE- net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on the item. Net change enables the system to reflect in real time the exact statue of each item managed by the system

Projected available balance is the amount of inventory that is expected as of the beginning of a period

TRUE- projected available balance is the amount of inventory that is expected as of the end of a period (or the beginning of the next period)

A BOM file is often called a product structure file or product tree because it shows how a product is put together

TRUE- the BOM file is often called the product structure file or product tree because it shows how a product is put together

The least total cost method lot sizing technique calculates the order quantity by comparing the carrying cost and setup or ordering cost for various lot sizes and then selects the lot in which these are most nearly equal

TRUE- the least total cost method (LTC) is a dynamic lot sizing technique that calculates the order quantity by comparing the carrying cost and the setup (or ordering) costs for various lot sizes and then selects the lot in which these are most nearly equal

The least unit cost method of lot sizing technique adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost

TRUE- the least unit cost method is a dynamic lot sizing technique that adds ordering and inventory carrying costs for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit cost

Computing the quantity of each component that goes into a finished product can be done by expanding or exploding each item in a product structure tile and summing at all levels

TRUE- to compute the amount of each item needed at the lower levels, each item would need to be expanded and summed. A more efficient procedure is to store parts data in simple, single level lists. That is, each item and component is listed showing only its parent and the number of units needed per unit of its parent

An input to the MRP system is an inventory records file

True- master schedule, BOM file, and inventory records file

which of the following is not a lot sizing technique used in MRP system

Warehouse loading factor

name for demand caused by the demand for a higher level item

dependent demand

Which of the following is considered a secondary report in an MRP system

exceptions reports

Which of the following is an input to the master production schedule

forecasts of random demand from customers none of the above

In MRP how is demand information for a level zero item derived

from the Master production scheduling process

A product tree can do which of the following

help to compute component usage

What does it mean when a super bill of materials specifies half of a component part in an assembly

it means that 50% of the units assembled will not include that part

Which of the following is a dynamic lot sizing technique that calculates the order quantity by comparing the carrying cost and the setup or ordering costs for various lot sizes and then selects the lot in which these are most nearly equal

least total cost

which of the following can be used for lot sizing in an MRP system

least unit cost

which of the following is a dynamic lot sizing technique that adds ordering and inventory carrying cost for each trial lot size and divides by the number of units in each lot size, picking the lot size with the lowest unit

least unit cost

demand for an item located in level 3 of a product structure tree depends on demand for an item in the next higher level. what is that level

level 2

In a typical inventory status record, which of the following would you not expect to see

lost items

The time phased plan specifying how many and when the firm plans to build each end item is called

master production schedule

Under the lot for lot sizing technique, we would expect which of the following

minimize carrying costs

Which of the following files allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand

peg record file

which of the following is considered a primary report in an MRP system

planned order schedules

We would expect to see which of the following in an MRP systems inventory status file

scrap parts

Which of the following is most closely related to the reason a firm might implement MRP

so they can order the right parts

If annual demand is 6125 units, holding cost is $5 per unit, and setup cost per order is $50, which of the following is the EOQ lot size

square root of (2x6125x50/5) = 350

If annual demand is 1000, annual holding cost is .5 and cost per order is 10, what is EOQ

square root of 2x1000x10/.5 = 200

name for a bill of materials that includes items with fractional options

super bill of materials

Which of the following is an input to the MPS master production schedule

the aggregate plan

In an MRP program, the program accesses the status segment of an inventory record according to specific periods called which of the following

time buckets

what are periods of time having some specified level of opportunity for the customer to make changes called

time fences

Which of the following is one of the main purposes of MRP

to determine the amount of materials needed to produce each end item

Which of the following is the net requirement using an MRP program if the gross requirement is 1000 and the inventory on hand is 500

1000-500=500

Which of the following is the net requirement using an MRP program if the gross requirement is 1250 and the inventory on hand is 50?

1250-50=1200

What is the planned order release using an MRP program if the gross requirement is 1600 and inventory is 600

1600-600=1000

Which of the following is the planned-order release using an MRP program if the gross requirement is 5000, inventory on hand is 1200, and planned receipts are 800

5000-1200-800=3000

Which of the following is the planned order release using an MRP program if the gross requirement is 670 and the inventory on hand is 600

670-600=70

Which of the following industry types have high expected benefits from the application of MRP

Assemble to stock Assemble to order

What are the three main inputs to MRP

BOM, master schedule, and inventory records file

Which of the following is an input file necessary to run an MRP system

Bill of Material BOM Inventory records file

Which of the following is not a production activity report generated by MRP

Bill of materials report

MRP systems seek to achieve which of the following

Determine the number of dependent demand items needed

One of the main purposes of a MRP system is which of the following

Develop schedules specifying when each component should be ordered to produced

In a net change MRP system requirements and schedules are considered rigid and never updated

FALSE

An output of the MRP is a bill of materials file

FALSE- BOM is an input

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

FALSE- EOQ assumes that parts are used continuously during the period. The lot sizes generated by EOQ do not always cover the entire number of periods. For example, the EOQ might provide the requirements for 4.6 periods (when another EOQ would be needed)

The Economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set up costs, carrying cost, and cost of stock outs

FALSE- EOQ balances setup and holding costs

In a net change MRP program, a change in one item will result in a completely new inventory plan and schedule for every item in the master production schedule

FALSE- Net change systems are "activity" driven and requirements and schedules are updated whenever a transaction is processed that has an impact on them. Net change enables the system to reflect in real time the exact status of each item managed by the system

A modular bill of materials includes items with fractional options

FALSE- a Super bill of materials includes items with fractional options

Generally, determining lot sizes in MRP systems is simple

FALSE- determining lot sizes in an MRP system is a complicated and difficult problem

the Lot-4-lot lot sizing technique minimizes carrying cost by taking into account setup costs and capacity limitations

FALSE- lot for lot is most common technique -sets planned orders to exactly match net requirements -produces exactly what is needed each week with none carried over into future periods -minimizes carrying cost -does not take into account setup costs or capacity limitations

Low level coding in MRP indicates the exact status of each item managed by the system in real time

FALSE- low level coding is where each item is placed at the lowest level at which it appears in the structure hierarchy

The time phased plan specifying how many and when the firm plans to build each end item is called the MRP

FALSE- master production schedule

Projected available balance is a term referring to unsold finished goods inventory

FALSE- projected available balance is the amount of inventory (not unsold finished goods) that is expected at the end of a period

An input to the MRP system is an exception report

FALSE- the BOM file is one of the three main inputs to the MRP program. the other two are the master schedule and the inventory records file

The MRP Program performs its analysis from the bottom up of the product structure trees, imploding requirements level by level

FALSE- the MRP program performs its analysis from the top down

Which of the following industry types will not benefit greatly from the application of MRP

Fabricate to order


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