Chapter 9: Material Requiremnets Planning

The first step in the MRP explosion process is?

Retrieve the gross requirements for end items from the master schedule.

Which type of time fence allows for changes to a specific product so long as parts are available?

Slushy

Which of the following is NOT a part of the material requirements planning system?

Supplier delivery schedule

True or false: A least total cost lot sizing technique is a dynamic approach that continually looks for an optimal lot size where carrying costs and ordering costs are close to equal.

TRUE

The file containing the complete product description, parts listing, quantity needed and product build sequence is called?

The bill-of-material

_____ _______ is/are a company's attempt to provide a controlled window of opportunity to make changes to the master production schedule.

Time fence

Periods of time having some specified level of opportunity for the customer to make changes are called __________.

Time fences

Least unit cost provides ______ as an advantage when taking variable ordering costs and setup costs into account.

a more complete analysis

Outside of determining parts, components, and materials, MRP provides:

a schedule for when each of these should be produced or ordered

Product demand for end items comes primarily from two main sources: known customers who have placed specific orders and the _______ production plan.

aggregate

MRP systems tend to work best in companies where products are made in ________ using the same productive equipment.

batches

Level 0 items during the explosion process are typically referred to as ______ items or gross requirements.

end

The master production schedule is used to plan:

end items

An ______________ system is a computer system that integrates application programs from the functional areas of a firm.

enterprise resource planning (ERP)

Which of the following is not a lot sizing technique used in MRP systems?

fixed time costs

Using complex lot-sizing techniques, larger lot sizes can cause an increase in ______, complicating plant logistics.

inventory

A material requirements planning system interfaces with the master production schedule, bill-of-materials file and _________.

inventory records file.

One of the limitations with least total cost (LTC) is the influence by the:

length of the planning horizon.

Setting planned orders to match the net requirements exactly is what type of lot sizing technique?

lot - for - lot

A process that places all identical parts at the same level in the bills-of-materials simplifies computations is known as __________ level coding.

low level coding

The master production schedule typically deals with end items but can be broken down to _________ if the item is large or expensive.

major subassemblies

The next level in the planning process down from an aggregate plan is called?

master production schedule

When safety stock is needed, what is reduced by the safety stock?

on - hand balance

The ultimate goal of any MRP lot sizing approach is to balance the setup or __________ costs and the ___________ costs associated with meeting the net requirements generated by the MRP planning process.

order; holding

The file created by retracing a material requirement upward in the product structure to identify each parent item that created the demand is called a _______ record.

peg

A _________ bill-of-materials includes items with fractional options.

super

A company producing widgets only needs Part A for 40% of the widgets built. This company is likely using what type of bill-of-material?

super

At any point in time, an MRP system can access the status segment of the inventory record according to specific time periods commonly known as

time buckets.

The BOM file is often called the product structure file or product _________.

tree

Plan ranking:

1. Aggregate Planning (highest level) 2. Master Production Schedule 3. Material Requirements Planning

An EOQ lot sizing technique will try to balance the sum of which of the following costs given a fairly constant demand?

1. Holding costs 2. Setup

Which of the following are sources of demand for products in a material requirements planning system?

1. Inter-department transactions. 2. Customer orders from sales personnel

The bill-of-material (BOM) file is also known as a

1. Product Structure File 2. Product Tree

Which of the following would be located on the MPS plan?

1. pens ordered from an office supply company. 2. a new vehicle purchased from an automotive dealer.

Some benefits of an ERP system are

1. quality management can develop inspection points for products during manufacturing 2. sales can track all the details of an order 3. manufacturing knows about order as soon as they are entered

Which is the correct equation used to calculate economic order quantity (EOQ)?

EOQ= √(2DS/H)

T/F: A modular bill-of-materials is a standard item with many options within the module.

False

Projected balance, the amount of inventory expected at the end of a period, is calculated using which equation?

Projected available balance = sum of on-hand inventory - gross requirements + scheduled receipts + planned orders

T/F: The master scheduler typically focuses on end items rather than raw materials.

TRUE

In which of the following industry types would MRP provide high benefits?

1. Engineer - to - order 2. Assemble - to - order 3. Assemble - to - stock

Which of the following is/are issues a master scheduler must consider?

1. Trade-off manufacturing, engineering and marketing conflicts. 2. Never lose sight of the aggregate plan. 3. Be involved with customer order promising.

Which of the following statements best characterizes an MRP system?

A system-driven logic that allows a company to tie the production functions together from a material planning and control view.

If a company has more units in the master production schedule than firm customer orders, the residual is called?

Available to promise

This feature identifies the difference between the number of units currently included in the master schedule and firm customer orders.

Available to promise

A bill-of-material also goes by the acronym

BOM

A major drawback with lot-for-lot sizing is?

High setup costs

______ are the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule.

Lot sizes

T/F: A process that places all identical parts at the same level in the bills-of-materials simplifies computations. This process is known as low level coding.

True

Which of the following is not a type of time fence described in the text?

Variable

Lumpiness, or the tendency for uneven production, further down the creation sequence is:

caused by items being withdrawn from inventory in lots

Which of the following is true about MRP?

1. MRP is used determined the number of parts, components, and other materials needed to produce a product. 2. MRP is an acronym for Material Requirements Planning

An item that can be produced and stocked as a subassembly often uses a _________ bill - of - materials for planning.

modular

If ordering costs and setup costs remain constant then _________ is the easiest method for lot sizing

the lowest total cost method