OPMT 303 Chap 15 Final

30. End item A requires three component parts: B, C, and D. The BOM indicates that for each completed A, 1 unit of B, 2 units of C, and 1 unit of D are required. Current inventory for the four items is as follows: there are 15 As, 40 Bs, 50 Cs, and 15 Ds in stock. If the lead time for all items is 1 week and there are no scheduled receipts for any item, how many units of product A can be delivered to customers at the start of next week (week 2) if you realize now the BOM has just been changed? You now realize it takes 2 units of B to make 1 finished unit of A. A. 10 units B. 15 units C. 20 units D. 25 units

B. 15 units

28. Using a lot-for-lot ordering strategy for the following item, what is the net requirements amount in week 3? (Note: Use a lead time of one week and the gross requirements and scheduled receipts depicted below, and assume you begin with 100 units in inventory.) Week 1 2 3 4 Gross requirements 0 100 80 15 Scheduled receipts 75 0 0 0 Projected ending inventory (100) Net requirements Planned order receipts Planned order releases A. 0 units B. 5 units C. 15 units D. 80 units

B. 5 unites

17. The gross requirements of a part in an MRP system are determined from A. net requirements + on-hand. B. net requirements of the end item. C. gross requirements of the immediate part. D. planned order releases of the immediate parent item.

D. planned order releases of the immediate parent item.

43. Which of the following is true of ERP systems? A. Decisions and actions made by sales will be visible to operations. B. ERP systems can extend across the enterprise, but not to suppliers or customers. C. ERP systems, though expensive, rarely fail to deliver expected results. D. All of the above.

A. Decisions and actions made by sales will be visible to operations.

1. The three inputs for an MRP parts explosion are A. inventory, master schedule, and bill of materials. B. forecast, inventory, and bill of materials. C. capacity, master schedule, and inventory. D. forecast, bill of materials, and master schedule.

A. Inventory, Master schedule, and bill of materials

36. Which of the following statements is correct regarding the use of an MRP system? A. Many firms have insisted their suppliers also install MRP systems. B. MRP has essentially eliminated the need for engineering change order systems. C. With MRP, all component, part, and raw material inventories are managed with order-point systems. D. All of the above are correct.

A. Many firms have insisted their suppliers also install MRP systems.

24. A bill of materials A. is a structured list of all the materials or parts needed to produce one unit of a finished product. B. is rarely revised once established. C. will lead to sufficient MRP system performance as long as the "threshold degree" of accuracy of approximately 75% is met. D. is used as an input for dispatching decisions on the shop floor.

A. is a structured list of all the materials or parts needed to produce one unit of a finished product.

10. Cycle counting A. is counting a fraction of inventory each day. B. does not eliminate the need for annual physical inventory. C. is a way to plan inventory on a cyclic basis. D. is a way to decide how much to order.

A. is counting a fraction of inventory each day.

4. An MRP system is designed to deal with A. lumpy demand. B. constant demand. C. uncertain demand. D. random demand.

A. lumpy demand.

39. An MRP system makes it possible to A. manage thousands of products and parts in an environment of unpredictable demand and shifting priorities. B. translate the parts explosion into a master production schedule to satisfy the aggregate planning requirements. C. shift the demand for finished products from independent to dependent demand. D. do all of the above.

A. manage thousands of products and parts in an environment of unpredictable demand and shifting priorities.

5. Planned lead times A. usually are longer than actual working times. B. ignore interference from other jobs. C. usually are shorter than actual working times. D. assume the work is expedited and completed as quickly as possible.

A. usually are longer than actual working times.

44. Which of the following statements concerning MRP system operation is correct? A. Research has shown that many companies are transitioning from safety stock to safety capacity as a means of dealing with uncertain demand. B. A properly used MRP system allows for minimal levels of safety stock. C. Additional safety lead time is a common strategy for reducing inventory levels. D. All of the above are correct.

B. A properly used MRP system allows for minimal levels of safety stock.

26. Which of the following is NOT a major element considered in MRP implementation? A. Adequate computer support. B. Available data. C. Management support. D. User knowledge, including those outside operations.

B. Available data.

16. Which of the following most closely describes net material requirements in an MRP system? A. Gross requirements - planned receipts. B. Gross requirements - (on-hand + scheduled receipts). C. Gross requirements - on-hand + scheduled receipts. D. Gross requirements - planned order releases.

B. Gross requirements - (on-hand + scheduled receipts).

18. _______ systems use a requirements order philosophy, while _______ systems use a replenishment order philosophy. A. Order-point, MRP B. MRP, order-point C. EOQ, quantity discount D. P, Q

B. MRP, order-point

11. Bills of materials are kept current with changes using A. master scheduling systems. B. engineering change order systems. C. inventory tracking systems. D. capacity planning systems.

B. engineering change order systems.

3. A replenishment-based system derives orders from A. capacity available. B. forecast or customer request. C. bill of materials. D. master schedule.

B. forecast or customer request.

7. Safety stock in an MRP system A. is never needed. B. is used to provide flexibility to meet changing customer requirements. C. must provide a 100% service level. D. is planned at the part level, independent of the safety stock of other parts.

B. is used to provide flexibility to meet changing customer requirements.

27. The master production schedule (MPS) for two products, A and B, is shown below. To manufacture item A, two units of component C are required. To manufacture item B, four units of component C are required. The inventory balance for C is 10 units at the start of week 1. Using this information, determine the gross requirements for component C to start week 1. MPS Week 1 Product A 15 Product B 2 A. 15 units B. 28 units C. 38 units D. 48 units

C. 38 units

33. Which of the following is correct regarding future demand for component parts? A. Future demand in an order-point system is based on the master production schedule. B. Future demand in an MRP system is based on the past history of demand for each component part. C. Future demand in an MRP system is based on the master production schedule. D. None of the above.

C. Future demand in an MRP system is based on the master production schedule.

38. A manufacturing execution system (MES) A. is another name for a shop floor control system. B. provides information on job priorities using dispatching rules. C. supports managers in the adjustment of lead times to meet customer needs. D. has all of the above features.

D. has all of the above features.

22. Which of the following statements concerning MRP systems is FALSE? A. MRP is a computer-based inventory planning and control information system designed to handle production scheduling of dependent-demand inventories for batch systems. B. MRP is designed to determine how much is needed and when the need occurs for items that experience dependent demand (components, subassemblies, parts, and raw materials). C. MRP systems are based on a replenishment philosophy, which indicates that material should be ordered when stock runs low. D. The ordering philosophy of MRP may result in "lumpy" demand for component parts.

C. MRP systems are based on a replenishment philosophy, which indicates that material should be ordered when stock runs low.

13. Which system specifies the output of the operations function? A. Parts explosion. B. Bill of materials. C. Master scheduling. D. Capacity planning.

C. Master scheduling.

8. The bill of materials A. shows how much inventory is available. B. is a bill sent to the customer for material ordered. C. is a list of all materials required to produce a part. D. none of the above.

C. is a list of all materials required to produce a part.

9. Successful MRP implementation requires A. management support, parts explosion, and adequate computer support. B. marketing support, master schedule, and bill of materials. C. management support, accurate data, and adequate computer support. D. none of the above.

C. management support, accurate data, and adequate computer support.

32. The main problem with the traditional annual physical inventory count is A. closing the inventory warehouse for the time needed to conduct the physical inventory count. B. reconciling the physical inventory count with up to date BOMs. C. many of the people assigned to this task are inexperienced and make errors. D. none of the above.

C. many of the people assigned to this task are inexperienced and make errors.

40. The purpose of lot sizing in MRP is to A. avoid the need for fixed lot sizes by allowing adjustable lots (lot-for-lot). B. adjust orders to match the gross requirement, eliminating the need to carry ending inventory. C. promote economical production lots and purchasing orders. D. do all of the above.

C. promote economical production lots and purchasing orders.

6. The parts explosion results in the following outputs: A. purchase orders and S&OP (aggregate planning). B. purchase orders and bill of materials. C. purchase orders and shop orders. D. shop orders and inventory orders.

C. purchase orders and shop orders

37. The purpose of the shop floor control subsystem is to A. ensure there is adequate capacity to meet the needs of the master production schedule. B. manage the many orders placed with external suppliers. C. release and manage orders to make sure they are completed on time. D. perform all of the above .

C. release and manage orders to make sure they are completed on time.

21. End item A requires three component parts: B, C, and D. The bill of materials indicates that for each completed A, one unit of B, 2 units of C, and 1 unit of D are required. Current inventory for the four items is as follows: there are 18 As, 40 Bs, 50 Cs and 35 Ds in stock. If the lead time for all items is one week and there are no scheduled receipts for any item, how many units of product A can be delivered to customers at the start of next week (week 2)? A. 13 B. 25 C. 31 D. 43

D. 43

35. Which of the following statements is correct regarding the impact of an MRP system on the purchasing function? A. Past-due orders are eliminated for the most part. B. Suppliers have more confidence in the validity of orders they receive. C. The amount of order expediting is dramatically reduced. D. All of the above are correct.

D. All of the above are correct

34. Which of the following would NOT likely be included in a typical computerized inventory record? A. Lead times and standard costs for each item. B. A complete materials plan for each item. C. A history of changes and demand patterns for each item. D. All of the above are typically included.

D. All of the above are typically included.

42. Integration with which of the following functions is required for an effective ERP system? A. Finance/accounting. B. Marketing/sales. C. Human resources. D. All of the above.

D. All of the above.

2. A requirements-based system derives orders from A. customer requests. B. forecast. C. bill of materials. D. master schedule.

D. Master Schedule

12. Which of the following is true about MRP systems? A. Forecast is based on past demand. B. Lot sizing is EOQ. C. Demand pattern is random. D. Objective is to meet manufacturing needs.

D. Objective is to meet manufacturing needs.

25. Which of the following statements about safety stock within an MRP system is NOT correct? A. When maintained, safety stock is normally held for end items rather than lower-level items in the BOM because end items experience uncertain independent demand. B. Carrying safety stock may represent a common solution for variable product scrap rates. C. Safety lead time may be a more cost-effective solution than safety stock for purchased materials that are subject to variable delivery times. D. Safety capacity as an alternative to safety stock is widely applied in industry.

D. Safety capacity as an alternative to safety stock is widely applied in industry.

31. Which of the following is NOT an element of an MRP system? A. Inventory record. B. Shop floor control. C. Capacity planning system. D. Sales and operations planning system.

D. Sales and operations planning system.

23. Which of the following statements is INCORRECT concerning MRP systems? A. MRP systems are useful in managing dependent demand inventories. B. MRP systems utilize requirements type of ordering philosophy while managing inventories. C. MRP systems are best suited for managing lumpy demand patterns. D. The ABC classification principle is used for managing inventories in MRP systems.

D. The ABC classification principle is used for managing inventories in MRP systems.

15. Successful MRP system implementation includes A. implementation planning. B. accurate data. C. user knowledge. D. all of the above.

D. all above

14. All of the following help to handle uncertainty when operating an MRP system EXCEPT A. safety stock. B. safety lead time. C. safety capacity. D. backup suppliers.

D. backup suppliers.

41. When MRP is extended all the way to the final customer, this is called A. customer requirements planning. B. order release planning. C. enterprise resource planning. D. distribution requirements planning.

D. distribution requirements planning.

19. In MRP "scheduled receipts" are A. identical to "planned order receipts." B. identical to "planned order releases." C. identical to "net requirements." D. open orders not delivered yet.

D. open orders not delivered yet.

20. The master production schedule for Product A shows a need for 30 units, and Product B shows a need of 25 units. To manufacture a unit of Product A, three units of component C are required. To manufacture a unit of Product B, four units of component C are required. Determine the gross requirements for component C to complete production. A. 55 B. 190 C. 110 D. 380 E. None of the above.

b. 190

29. Using a lot-for-lot ordering strategy for the following item, what is the planned order release amount in week 3? (Note: Use a lead time of one week and the gross requirements and scheduled receipts depicted below, and assume you begin with 50 units in inventory.) Week 1 2 3 4 Gross requirements 0 100 80 15 Scheduled receipts 25 0 0 0 Projected ending inventory (50) Net requirements Planned order receipts Planned order releases A. 0 units B. 5 units C. 15 units D. 80 units

c. 15 units