isds Ch. 14 (Part 1)

4. A dependent demand item is so called because its demand is dependent on customer preferences.

False (Dependent demand, moderate)

24. The economic part period is a fraction of a time bucket.

False (Lot-sizing techniques, easy)

2. MRP is generally practiced on items with dependent demand.

True (Dependent demand, easy)

23. In general, the lot-for-lot approach should be used whenever economical.

True (Lot-sizing techniques, moderate)

15. If 100 units of Q are needed and 10 are already in stock, then the gross requirement is 100 and the net requirement is 90.

True (MRP structure, easy)

44. In continuous (make-to-stock) operations, the master production schedule is usually expressed in terms of a. end items b. modules c. kits d. customer orders e. warehouse orders

a. end items

39. 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 forecast c. the need for dependent-demand items is calculated d. All of the above are true. e. None of the above is true.

d. All of the above are true.

45. In job shop (make-to-order) operations, the master production schedule is usually expressed in a. end items b. modules c. kits d. customer orders e. warehouse orders

d. customer orders

10. "Phantom bills" are bills of material for subassemblies that do not exist in reality.

False (Dependent inventory model requirements, easy)

7. The master production schedule is a forecast of demand for families of products.

False (Dependent inventory model requirements, easy)

12. The Aggregate Plan, derived from the Master Production Schedule, specifies in more detail how much of which products is to be made at what times.

False (Dependent inventory model requirements, moderate)

31. By convention, the top level in a bill of material is designated level 1.

False (Dependent inventory model requirements, moderate)

6. Since MRP is quite detailed in nature, it has no influence on the longer-range, less detailed aggregate planning.

False (Dependent inventory model requirements, moderate)

29. Operations splitting sends pieces to the next operation before the entire lot is completed on the previous operation.

False (Extensions of MRP, moderate)

26. MRP can be effective only if very accurate lot sizes are calculated in advance.

False (Lot-sizing techniques, easy)

25. The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.

False (Lot-sizing techniques, moderate)

19. MRP is an excellent tool for scheduling products with variable lead times.

False (MRP management, easy)

17. In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ.

False (MRP management, moderate)

5. The quantity required of a dependent demand item is computed from the demand for the final products in which the item is used.

True (Dependent demand, moderate)

8. Lead times, inventory availability, and purchase orders outstanding are among the five things operations managers must know for effective use of MRP.

True (Dependent inventory model requirements, easy)

11. Planning bills of material are bills of material for "kits" of inexpensive items such as washers, nuts, and bolts.

True (Dependent inventory model requirements, moderate)

13. The time phased product structure, unlike the bill of material, adds the concept of lead times.

True (Dependent inventory model requirements, moderate)

14. If X consists of one A and one B, and each A consists of one F and two Gs, then A is the "parent" component of G.

True (Dependent inventory model requirements, moderate)

9. A bill of material lists all components, ingredients, and materials needed to produce one unit of an end item.

True (Dependent inventory model requirements, moderate)

35. The supply chain systems that result from using ERP in the grocery industry are called efficient consumer response (ECR) systems.

True (Enterprise resource planning (ERP), easy)

33. While ERP may provide a strategic advantage over competitors, it is so complex that many companies cannot adjust to it.

True (Enterprise resource planning (ERP), moderate)

34. Firms may discover that, rather than adapting ERP to the way they do business, they have to adapt the way they do business to accommodate the ERP software.

True (Enterprise resource planning, moderate)

27. Smoothing a resource requirements profile to stay within capacity limits may increase setup costs.

True (Extensions of MRP, moderate)

28. Closed-loop MRP systems allow production planners to move work between time periods to smooth the load or to at least bring it within capacity.

True (Extensions of MRP, moderate)

Wheeled Coach obtains competitive advantage through MRP in part because of their excellent record integrity and insistence on record accuracy.

True (Global company profile, easy)

3. Reduced inventory levels and faster response to market changes are both benefits of MRP.

True (Introduction, easy)

22. The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very smooth and set up cost is small compared to holding cost.

True (Lot-sizing techniques, moderate)

32. DRP is a time-phased stock-replenishment plan for all levels of a distribution network.

True (MRP in services, moderate)

18. Time fences divide that segment of the MPS that can be revised from that section that is "frozen."

True (MRP management, easy)

20. Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of departments and machines when building schedules.

True (MRP management, easy)

21. If parts and subassemblies common to a variety of products are managed through the supermarket concept, formal order releases for such parts are not necessary.

True (MRP management, easy)

16. Gross material requirements do not take into account the amount of inventory on hand.

True (MRP structure, easy)

30. When safety stock is deemed absolutely necessary, the usual policy is to build it into the projected on-hand inventory of the MRP logic.

True (MRP structure, moderate)

41. The ______ is (are) the MRP input detailing which end items are to be produced, when they are needed, and in what quantities. a. master production schedule b. gross requirements c. inventory records d. assembly time chart e. bill of material

a. master production schedule

38. The phrase "demand related to the demand for other products" describes a. a dependent variable b. dependent demand c. recursive demand d. regression analysis e. independent demand

b. dependent demand

42. A master production schedule contains information about a. quantities and required delivery dates of all subassemblies b. quantities and required delivery dates of final products c. inventory on hand for each subassembly d. inventory on hand for each final product e. scheduled receipts for each final product

b. quantities and required delivery dates of final products

36. Which of the following statements regarding Wheeled Coach is false? a. Wheeled Coach has found competitive advantage through MRP. b. Wheeled Coach builds ambulances in a repetitive process. c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise. d. Wheeled Coach's MRP system maintains excellent record integrity. e. Low inventory and high quality are two positive outcomes of Wheeled Coach's use of MRP.

c. Wheeled Coach's MRP system allowed the company to meet tight schedules, but caused inventory to rise.

40. 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

37. 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

43. The aggregate plan gets input or feedback from which of the following areas? a. engineering b. finance, marketing, and human resources c. the master production schedule d. procurement, production, and general management e. all of the above

e. all of the above