Q&A Hero

Q: Which of the following industry types have high expected benefits from the application of MRP? A. Fabricate-to-order B. Hospitals C. Assemble-to-order D. Aircraft manufacturers E. Oil refineries

Q: Which of the following industry types have high expected benefits from the application of MRP? A. Fabricate-to-stock B. Fabricate-to-order C. Assemble-to-stock D. Continuous process E. Service and repair parts

Q: Which of the following industry types will not benefit greatly from the application of MRP? A. Fabricate-to-order B. Assemble-to-stock C. Assemble-to-order D. Manufacture-to-order E. None of the above

Q: A BOM file is sometimes called which of the following? A. Product structure tree B. Stocking plan C. Inventory usage record D. Production parts plan E. Time bucket schedule

Q: The three main inputs to an MRP system are the bill of materials, the master schedule and the inventory records file.

Q: Projected available balance is the amount of inventory that is expected as of the beginning of a period.

Q: "Projected available balance" is a term referring to unsold finished goods inventory.

Q: The least unit cost method (LUC) of lot-sizing technique 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.

Q: The least unit cost method (LUC) 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.

Q: 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.

Q: 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.

Q: The difference between the number of units currently included in the master schedule and the number of units in firm customer orders is often called "available to promise".

Q: "Available to promise" is a term referring to unsold finished goods inventory.

Q: 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.

Q: 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.

Q: Lot-for-lot (L4L) is the most common lot sizing technique.

Q: The lot-for-lot (L4L) lot sizing technique minimizes carrying cost by taking into account setup costs and capacity limitations.

Q: A lot-for-lot (L4L) lot sizing technique does not take into account setup costs or capacity limitations.

Q: Generally, determining lot sizes in MRP systems is simple.

Q: Since MRP systems focus on batch or lot-sized orders and JIT is focused on individual item production, the two systems are incompatible and cannot work together.

Q: A material requirements planning (MRP) system with information feedback from its module outputs is termed a "closed-loop MRP" system.

Q: An MRP program with a capacity requirements planning module allows rescheduling to try to Level capacity.

Q: Net change MRP reflects the exact status of each item managed by the system in "real time". Goal: 3

Q: In a net change MRP system requirements and schedules are considered rigid and never updated.

Q: In a net change MRP system requirements and schedules are updated whenever a transaction is processed that has an impact on the item.

Q: 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.

Q: Low Level coding in MRP indicates the exact status of each item managed by the system in "real time".

Q: The MRP program performs its analysis from the bottom of the product structure trees up, imploding requirements Level by Level.

Q: A modular bill of materials is the term for an item that can be produced and stocked as a subassembly.

Q: A modular bill of materials includes items with fractional options.

Q: Net change MRP systems are "activity" driven.

Q: Computing the quantities of each component that goes into a finished product requires expanding (or exploding) each item in a product structure file and summing at all Levels.

Q: A BOM file is often called a product structure file or product tree because it enumerates all of the component parts of the end item product.

Q: One of the outputs of an MRP system is a bill of materials (BOM) file.

Q: If you cannot provide a master production schedule (MPS) as an input file, you cannot run a material requirements planning (MRP) system.

Q: Computing the quantity of each component that goes into a finished product requires expanding (or exploding) each item in a product structure file and summing at all Levels.

Q: One of the biggest complaints by users of MRP systems is that MRP is too flexible in making changes in schedules when the need arises.

Q: To implement a MRP system successfully, a high degree of inventory and bill-of-material accuracy is required. This may involve significant change in how a firm operates.

Q: In today's modern world of rapid computing and just-in-time replenishment of supplies, freezing the master production schedule is unnecessary.

Q: The "theme" of MRP is getting the right materials to the right place before they are needed.

Q: The philosophy of material requirements planning is that materials should be expedited when their lack would delay the overall production schedule and de-expedited when the schedule falls behind and postpones their need.

Q: Use of time fences maintains a reasonably controlled flow through a production system.

Q: A necessary input to the material requirements planning (MRP) system is an inventory records file.

Q: A necessary input to the material requirements planning (MRP) system is an exception report.

Q: A master production schedule is an essential input to a material requirements planning (MRP) system.

Q: Time fences increase productivity by reducing the time spent waiting for each product to be produced.

Q: Developing the master production schedule is done by disaggregating the aggregate production plan.

Q: 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.

Q: The deeper one looks into the product creation sequence, the more the requirements of dependent demand items tend to become "lumpy".

Q: 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.

Q: MRP provides the schedule specifying when each part and component of an end item should be ordered or produced.

Q: The master production schedule states the number of items to be produced during specific time periods.

Q: Management defines time fences as periods of time having some specific Level of opportunity for the customer to make changes.

Q: MRP is least valuable in industries where a number of products are made in batches using the same productive equipment.

Q: A time fence is a unit of productivity related to time.

Q: The master production schedule (MPS) is a time-phased plan specifying how many of each end item to build and when the firm plans to build them.

Q: MRP is most valuable in industries where a number of products are made in batches using the same productive equipment.

Q: MRP is based on dependent demand.

Q: All firms maintain bill of materials (BOM) files, which are simply a sequencing of everything that goes into a final product.

Q: MRP II stands for Manufacturing Resource Planning.

Q: MRP stands for Manufacturing Requirements Planning.

Q: The key difference between a fixed-order quantity inventory model where demand is known and one where demand is uncertain is in computing the reorder point.

Q: Safety stock can be computed when using the fixed-order quantity inventory model by multiplying a "z" value representing the number of standard deviations to achieve a service Level or probability by the standard deviation of lead time.

Q: Safety stock can be computed when using the fixed-order quantity inventory model by multiplying a "z" value representing the number of standard deviations to achieve a service Level or probability by the standard deviation of daily demand.

Q: If demand for an item is normally distributed we plan for demand to be twice the average demand and carry 2 standard deviations worth of safety stock inventory.

Q: Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Q: Using the probability approach we assume that the demand for inventory over a period of time is normally distributed.

Q: The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory and then subtracting back-ordered inventory.

Q: Fixed-order quantity inventory systems determine the order point, R and the order quantity, Q values.

Q: Fixed-time period inventory models are "event-triggered".

Q: Fixed-order quantity inventory models are "event-triggered".

Q: The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Q: The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout.

Q: The fixed-order quantity inventory model favors less expensive items because average inventory is lower.

Q: The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

Q: Dependent demand inventory Levels are usually managed by calculations using calculus-driven, cost-minimizing models.

Q: Shortage costs are precise and easy to measure.

Q: If the cost to change from one product to another were zero the lot size would be very small.

Q: In inventory models, high holding costs tend to favor low inventory Levels and frequent replenishment.

Q: In inventory models, high holding costs tend to favor high inventory Levels.