Question 1

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.

Accepted Answer

The answer of The least unit cost method (LUC) lot-sizing...

Question 2

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.

Accepted Answer

This statement accurately describes the least total cost method (LTC) lot-sizing technique.

Question 3

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

Accepted Answer

Projected available balance refers to the expected inventory level at any given point in time, not just at the beginning of a period. It accounts for incoming and outgoing inventory throughout the period.

Question 4

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

Accepted Answer

The EOQ lot sizing technique does use a formula that involves the square root, but it is not referred to as the "square root formula". The formula is used to balance ordering/setup costs and holding/carrying costs.

Question 5

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

Accepted Answer

The lot-for-lot (L4L) technique orders exactly what is needed for production and does not take into account setup costs or capacity limitations; it aims to minimize carrying costs by not holding excess inventory.

Question 6

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.

Accepted Answer

The EOQ lot sizing technique calculates the optimal quantity of product to order or produce, which may result in some inventory being carried over into future periods.

Question 7

Net change MRP systems are "activity" driven.

Accepted Answer

Net change MRP systems are driven by activity, such as changes in inventory levels or customer demand, and only update the necessary components of the production plan rather than recalculating the entire plan.

Question 8

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

Accepted Answer

Low-level coding in MRP (Material Requirements Planning) systems is used to identify the lowest level at which a component appears in the Bill of Materials, not to indicate the real-time status of each item.

Question 9

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

Accepted Answer

"Projected available balance" typically refers to the amount of funds that will be available in a bank account after pending transactions have been processed, not unsold finished goods inventory.

Question 10

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

Accepted Answer

The EOQ lot-sizing technique uses a formula that calculates the optimal quantity of inventory to order based on setup cost and carrying cost, but does not take into account the cost of stockouts. There is no specific "square root formula" used in EOQ calculations.

Question 11

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

Accepted Answer

Net change MRP continuously updates and reflects the current status of inventory items in the system, making it a real-time planning tool.

Question 12

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.

Accepted Answer

This statement accurately describes the least unit cost method of lot-sizing.

Question 13

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

Accepted Answer

A lot-for-lot (L4L) lot sizing technique only considers the exact quantity needed for production, without considering setup costs or capacity limitations. It is used when there are no inventory holding costs and backordering costs.

Question 14

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

Accepted Answer

In a net change MRP system, changes are made to requirements and schedules only when there is a transaction that affects the item. This approach offers significant time savings and reduced paperwork compared to traditional MRP systems, which require the entire plan to be recalculated every time any change is made in the system.

Question 15

Generally, determining lot sizes in MRP systems is simple.

Accepted Answer

Determining lot sizes in MRP systems can be complex and dependent on various factors such as order quantities, lead times, and inventory levels.

Question 16

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.

Accepted Answer

The answer of The least unit cost method of lot-sizing...

Question 17

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

Accepted Answer

These are indeed the three main inputs to an MRP system. The bill of materials lists all the components and subcomponents needed to produce a product, the master schedule outlines the production schedule for each item, and the inventory records file tracks the current inventory levels of each item.

Question 18

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

Accepted Answer

In a net change MRP system, requirements and schedules are updated based on changes in demand or supply availability, making it flexible and adaptable to changes in the production process.

Question 19

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.

Accepted Answer

In a net change MRP program, changes are made only for those items directly affected by the change, not for every item in the master production schedule.

Question 20

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

Accepted Answer

Lot-for-lot (L4L) is a commonly used lot sizing technique in inventory management. It involves ordering exactly the amount needed to satisfy demand for each period, without any additional inventory.

Quiz 9: Material Requirements Planning