Ch 9: Material Requirements Planning
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 is based on dependent demand
TRUE
MRP is most valuable where a number of products are made in batches using the same productive equipment
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 (MPS).
TRUE
When implemented correctly, MRP links all areas of the business.
FALSE
A master production schedule is an input to a material requirements planning (MRP) system
TRUE
An input to the material requirements planning (MRP) system is an inventory records file.
TRUE
A modular bill of materials is the term for an item that can be produced and stocked as a subassembly.
TRUE
Lot-for-lot (L4L) is the most common lot sizing technique.
TRUE
Manufacturing firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product
TRUE
Low level coding in MRP indicates the exact status of each item managed by the system in "real time."
FALSE
MRP stands for Manufacturing Requirements Planning
FALSE
The MRP program performs its analysis from the bottom up of the product structure trees, imploding requirements level by level.
FALSE
The customer grace period is a time-span having some specified level of opportunity for the customer to make changes.
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.
FALSE
A BOM file is often called a product structure file or product tree because it shows how a product is put together.
TRUE
You have just performed a CPM Analysis and have found that more than one path through the project network has 0 slack values. What can you conclude?
You have multiple critical paths.
A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations.
TRUE
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 file and summing at all levels.
TRUE
In a net change MRP system requirements and schedules are updated whenever a transaction is processed that has an impact on the item.
TRUE
MRP provides the schedule specifying when each part and component of an end item should be ordered or produced
TRUE
MRP stands for Material Requirements Planning
TRUE
Net change MRP reflects the exact status of each item managed by the system in "real time."
TRUE
Net change MRP systems are "activity" driven.
TRUE
Projected available balance is the amount of inventory that is expected as of the beginning of a period.
TRUE
The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to become more "lumpy."
TRUE
The economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set-up cost and carrying cost.
TRUE
The least total cost method (LTC) lot-sizing technique 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.
TRUE
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 master production schedule states the number of items to be produced during specific time periods
TRUE
Time fences are periods of time having some specified level of opportunity for the customer to make changes.
TRUE
In a Gantt chart the horizontal axis is usually which of the following?
Time
"Projected available balance" is a term referring to unsold finished goods inventory.
FALSE
A modular bill of materials includes items with fractional options.
FALSE
An input to the material requirements planning (MRP) system is an exception report.
FALSE
An output of MRP is a bill of materials (BOM) file.
FALSE
Generally, determining lot sizes in MRP systems is simple.
FALSE
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
In a net change MRP system requirements and schedules are considered rigid and never updated.
FALSE
MRP is least valuable in industries where a number of products are made in batches using the same productive equipment
FALSE
The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to smooth out and become even over time.
FALSE
The economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set-up cost, carrying cost and cost of stock-outs.
FALSE
The least unit cost method (LUC) lot-sizing technique 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.
FALSE
The least unit cost method of lot-sizing adds ordering, stock-out 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.
FALSE
The lot-for-lot (L4L) lot sizing technique minimizes carrying cost by taking into account setup costs and capacity limitations.
FALSE
The time-phased plan specifying how many and when the firm plans to build each end item is called the Materials Requirements Plan (MRP.)
FALSE
Which of the following is an input file necessary to run an MRP system?
Inventory records file