Deck 21: Material Requirements Planning

Question 1

Net change MRP systems are "activity" driven.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

MRP is based on dependent demand.

Question 6

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

Question 7

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

Question 8

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

Question 9

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 10

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

Question 11

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

Question 12

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 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

MRP stands for Material Requirements Planning.

Question 19

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 20

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

Question 21

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

Question 22

The least unit cost method of lot-sizing adds ordering, stock-out, and inventory carrying costs 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 23

The economic order quantity (EOQ) lot-sizing technique uses the "square root formula" to balance setup cost, carrying cost, and cost of stockouts.

Question 24

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 25

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

Question 26

Generally, determining lot sizes in MRP systems is simple.

Question 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

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 32

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

Question 33

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 34

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 35

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

Question 36

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

Question 37

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 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

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 43

In this industry type, items are manufactured by machine rather than assembled from parts. These are standard stock items carried in anticipation of customer demand.

A) Assemble-to-stock
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 44

This industry type combines multiple component parts into a finished product, which is then stocked in inventory to satisfy customer demand.

A) Assemble-to-stock
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 45

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

Question 46

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

Question 47

A product 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 48

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 49

Which of the following is not a direct input to the material planning?

A) Bill-of-material file
B) Aggregate production plan
C) Master production schedule
D) Inventory records file

Question 50

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 these choices are correct

Question 51

The master production schedule deals exclusively with dependent demand items.

Question 52

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 53

This industry type includes industries such as foundries, rubber and plastics, specialty paper, chemicals, paint, drug, and food processors.

A) Process
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 54

A BOM file is also called which of the following?

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

Question 55

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

Question 56

In this industry type, a final assembly is made from standard options that the customer chooses.

A) Assemble-to-stock
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 57

A super bill can specify that a fraction of a part, say 25 percent, is used.

Question 58

In this industry type, items are manufactured by machine to customer order. These are generally industrial orders.

A) Process
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 59

In this industry type, Iitems are fabricated or assembled completely to customer specification.

A) Process
B) Make-to-stock
C) Assemble-to-order
D) Make-to-order
E) Engineer-to-order

Question 60

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

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

Question 61

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 these choices are correct

Question 62

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

Question 63

Which of the following is the planned-order release using an MRP program if the gross requirement is 5,000, inventory on hand is 1,200, and planned receipts are 800?

A) 7,000
B) 4,200
C) 3,000
D) 2,000
E) 1,200

Question 64

Which of the following is considered a primary report in an MRP system?

A) Planned-order schedule
B) Peg report
C) Planning report
D) Inventory accuracy report
E) Aggregate production plan report

Question 65

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 66

Which of the following is the planned-order release using an MRP program if the gross requirement is 670 and the inventory on hand is 600?

A) 670
B) 600
C) 530
D) 70
E) None of these choices are correct

Question 67

Which of the following is the net requirement using an MRP program if the gross requirement is 1,000 and the inventory on hand is 500?

A) 1,000
B) 950
C) 500
D) 400
E) 350

Question 68

Which of the following is considered a secondary report in an MRP system?

A) Planned-order schedule
B) Exceptions reports
C) Inventory record
D) Firm orders from known customers
E) Engineering change reports

Question 69

Which of the following can be used for lot sizing in an MRP system?

A) Low-level coding
B) Time bucket size
C) Least unit cost
D) Inventory record file
E) Peg inventory

Question 70

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 71

In a typical inventory status record, which of the following would you not expect to see?

A) Scrap allowance
B) Order quantity
C) Gross requirements
D) Planned-order releases
E) Lost items

Question 72

One of the main purposes of an 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 73

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 74

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

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

Question 75

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 76

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 77

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 78

Which of the following is the net requirement using an MRP program if the gross requirement is 1,250 and the inventory on hand is 50?

A) 1,200
B) 1,300
C) 1,150
D) 2,450
E) None of these choices are correct

Question 79

Which of the following is considered a primary report in an MRP system?

A) Planning reports
B) Performance reports
C) Exception reports
D) Planned-order schedules
E) Cycle counting reports

Question 80

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