Deck 18: Material Requirements Planning

Question 1

A modular bill of materials includes items with fractional options.

Answer 1

False

Question 2

An input to the material requirements planning (MRP) system is an exception report.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

A BOM file is often called a product structure file or product tree because it shows how a product is put together.

Question 5

An output of MRP is a bill of materials (BOM) file.

Question 6

An input to the material requirements planning (MRP) system is an inventory records file.

Question 7

MRP is based on dependent demand.

Question 8

MRP stands for Material Requirements Planning.

Question 9

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

Question 10

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

Question 11

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.

Question 12

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

Question 13

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

Question 14

Computing the quantity of each component that goes into a finished product can be done by expanding (or exploding) each item in a product structure file and summing at all levels.

Question 15

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

Question 16

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

Question 17

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.

Question 18

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

Question 19

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

Question 20

MRP stands for Manufacturing Requirements Planning.

Question 21

Net change MRP systems are "activity" driven.

Question 22

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

Question 23

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

Question 24

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.

Question 25

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.

Question 26

Generally, determining lot sizes in MRP systems is simple.

Question 27

The least unit cost method 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.

Question 28

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.

Question 29

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

Question 30

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

Question 31

The economic order quantity (EOQ) lot sizing technique uses the "square root formula" to balance set-up cost and carrying cost.

Question 32

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

Question 33

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

Question 34

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.

Question 35

The least unit cost method of lot-sizing 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.

Question 36

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

Question 37

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.

Question 38

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.

Question 39

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

Question 40

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

Question 41

One of the main purposes of a MRP system is which of the following?

A)Track inventory levels.
B)Create productive capacity.
C)Decrease layers of management.
D)Develop schedules specifying when each component should be ordered or produced.
E)Upgrade manufacturing's professionalism.

Question 42

When implemented correctly, MRP links all areas of the business.

Question 43

Materials Requirements Planning (MRP) evolved from Enterprise Resource Planning (ERP).

Question 44

The time-phased plan specifying how many and when the firm plans to build each end item is called the
Materials Requirements Plan (MRP.)

Question 45

MRP systems seek to achieve which of the following?

A)Minimize lot sizes
B)Determine the number of dependent demand items needed
C)Relieve capacity bottlenecks
D)Provide a yardstick for future improvements
E)Improve on JIT methods

Question 46

Which of the following is an input to the master production schedule?

A)Prototype products from product development
B)Aggregate component schedule
C)Peg reports
D)Exception reports
E)Forecasts of random demand from customers

Question 47

A BOM file is also called which of the following?

A)Product structure tree
B)Stocking plan
C)Inventory usage record
D)Production parts plan
E)Time bucket schedule

Question 48

Which of the following is one of the main purposes of a MRP system?

A)Educate personnel in basic work rules.
B)To determine the amount of materials needed to produce each end item.
C)Stimulate the work force.
D)Decrease labor requirements.
E)Increase inventory accuracy.

Question 49

The customer grace period is a time-span having some specified level of opportunity for the customer to make changes.

Question 50

Enterprise Resource Planning (ERP) evolved from Materials Requirements Planning (MRP).

Question 51

Time fences are periods of time having some specified level of opportunity for the customer to make changes.

Question 52

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

Question 53

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

Question 54

Which of the following industry types has 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

Question 55

Which of the following is an input to the master production schedule (MPS)?

A)Inventory records file
B)The aggregate plan
C)The bill of materials
D)The exception report
E)Planned order schedules

Question 56

Which of the following is an input to the master production schedule?

A)Bill of materials (BOM) file
B)Inventory records file
C)Exception reports
D)Planned-order schedules
E)None of the above

Question 57

Which of the following is most closely related to the reason a firm might implement MRP?

A)So they can order the right parts
B)So they can order parts sufficient for immediate use
C)So they can insure that parts to arrive prior to when they are needed
D)To assure appropriate quality levels
E)To keep process costs between the LCL and the UCL

Question 58

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

Question 59

Which of the following industry types has high expected benefits from the application of MRP?

A)Fabricate-to-order
B)Hospitals
C)Assemble-to-order
D)Aircraft manufacturers
E)Oil refineries

Question 60

A product structure tree can do which of the following?

A)Help to compute component usage
B)Reduce product scrap
C)Reduce labor overtime
D)Reduce regular time labor
E)Locate raw material supplies

Question 61

Which of the following is an input file necessary to run an MRP system?

A)Exception report
B)Computer-aided-design files
C)Inventory records file
D)Personnel files
E)Planned order schedule

Question 62

Which of the following files allows us to retrace a material requirement upward in the product structure through each level, identifying each parent item that created the demand?

A)Planning bill of materials file
B)Modular bill of materials file
C)Super bill of materials file
D)Exception report file
E)Peg record file

Question 63

We would expect to see which of the following in an MRP system's inventory status file?

A)End items produced
B)Late/early delivery records
C)Scrap parts
D)Labor efficiency
E)Computer errors

Question 64

Which of the following is not a production activity report generated by MRP?

A)Exception report
B)Planning report
C)Performance control report
D)Planned-order schedules
E)Bill of materials report

Question 65

Which of the following is an input file necessary to run an MRP system?

A)Bill of materials (BOM) file
B)Quality management report
C)Exception reports
D)Planned-order schedules
E)Purchasing contracts

Question 66

In an MRP program, the program accesses the status segment of an inventory record according to specific periods called which of the following?

A)Cubed time units
B)Time buckets
C)BOM units
D)Time modules
E)Time lines