Chapter 14 Material Requirements Planning (MRP) and ERP

Which of the following best describes a gross material requirements plan? A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started B) an intermediate range plan for the scheduling of families of products C) a chart illustrating whether capacity has been exceeded D) a table that corrects scheduled quantities for inventory on hand E) a schedule showing which products are to be manufactured and in what quantities

A) a schedule that shows total demand for an item, and when it must be ordered from a supplier or when production must be started

Which of the following is NOT a key benefit of MRP? A) increased quality B) better response to customer orders C) faster response to market changes D) improved utilization of facilities and labor E) reduced inventory levels

A) increased quality

By convention, what is the top level in a product structure? A) level 0 B) level 1 C) level T D) level 10 E) level 100

A) level 0

Firms making many different final products use ________ to facilitate production scheduling. A) planning bills B) modular bills C) phantom bills D) overdue bills E) gross requirements bills

B) modular bills

Which of the following statements is TRUE regarding the master production schedule? A) It specifies what is to be made and how. B) The schedule is independent of the aggregate plan. C) It disaggregates the aggregate plan. D) The master production schedule sets the upper and lower bounds on the aggregate plan. E) It specifies the work-shift schedule for the assembly line workers.

C) It disaggregates the aggregate plan.

Low-level coding means that: A) a final item has only a few levels in the BOM structure. B) the code being used is the code for the lowest level in the BOM structure. C) a component item is coded at the lowest level at which it appears in the BOM structure. D) the top level of the BOM is below level zero and that BOMs are not organized around the finished product. E) the lowest-paid staff member in the production department performs the coding.

C) a component item is coded at the lowest level at which it appears in the BOM structure.

A paint company mixes ten different base colors into 3,000 different color options. If production scheduling is organized around the ten different base colors, then the bills of material are classified as which of the following? A) phantom B) planning C) modular D) low-level E) A and B

C) modular

A material requirements plan contains information with regard to all of the following EXCEPT: A) quantities and required delivery dates of all subassemblies. B) quantities and required delivery dates of final products. C) the capacity needed to provide the projected output rate. D) inventory on hand for each final product. E) inventory on hand for each subassembly.

C) the capacity needed to provide the projected output rate.

Dependent demand and independent demand items differ in that: A) for any product, all components are dependent-demand items. B) the need for independent-demand items is forecasted. C) the need for dependent-demand items is calculated. D) All of these are true. E) None of these is true.

D) All of these are true.

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) it is a component of a clearly identifiable parent. E) the item has several children.

D) it is a component of a clearly identifiable parent.

In MRP, the number of units projected to be available at the beginning of each time period refers to: A) net requirements. B) scheduled receipts. C) planned order releases. D) projected on hand. E) the amount necessary to cover a shortage.

D) projected on hand.

The minimum record accuracy required for successful MRP is approximately which of the following? A) lower than 90% B) 90% C) 95% D) 97% E) 99%

E) 99%

Which of the following statements regarding the gross material requirements plan is TRUE? A) It shows total demand for an item. B) It shows when an item must be ordered from a supplier or when production must be started. C) It combines a master production schedule with the time-phased schedule. D) It requires several inputs, including an accurate bill of material. E) All of these are true.

E) All of these are true.

Which of the following statements best compares modular bills and phantom bills? A) Both pertain to assemblies that are not inventoried. B) There is no difference between the two. C) Both pertain to assemblies that are inventoried. D) Modular bills are used for assemblies that are not inventoried, unlike phantom bills. E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

E) Modular bills represent subassemblies that actually exist and are inventoried, while phantom bills represent subassemblies that exist only temporarily and are not inventoried.

Effective use of MRP and other dependent demand models does NOT require which of the following? A) master production schedule B) bill of materials C) inventory availability D) lead times E) cost of individual components

E) cost of individual components

A grill assembly takes 20 washers. Instead of listing these washers separately, they are grouped into a single kit for production. How is the bill of material for the washers classified? A) phantom bill B) component bill C) modular bill D) low-level bill E) planning bill

E) planning bill