Question 1

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

Accepted Answer

The answer of Projected available balance is the amount of...

Question 2

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

Accepted Answer

"Projected available balance" typically refers to the expected balance of funds in a bank account after pending transactions have been taken into account. It is not related to unsold finished goods inventory.

Question 3

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 technique...

Question 4

Net change MRP systems are "activity" driven.

Accepted Answer

Net change MRP systems use activity-based planning to update production schedules, inventory levels, and material requirements based on changes in demand, inventory levels, and production lead times. This contrasts with traditional MRP systems that rely on periodic batch updates, which can result in inaccurate planning and excess inventory.

Question 5

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 6

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 is a correct description of the least total cost method (LTC) lot-sizing technique.

Question 7

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

Accepted Answer

This statement is true. The bill of materials provides information about the components and quantities required to manufacture a product, the master schedule outlines the production plan and timing, and the inventory records file tracks current inventory levels. These three inputs are used by an MRP system to generate a materials plan and schedule for production.

Question 8

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 9

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 10

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 11

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 as changes occur in customer demand, inventory levels or production schedules. This allows the system to respond quickly to changes in the production environment.

Question 12

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

Accepted Answer

Lot-for-lot (LKL) lot sizing technique calculates the exact quantity needed for each time period without considering the setup costs or capacity limitations. It is commonly used in situations where demand is stable, and the cost of holding inventory is high. Thus, it is true that LKL does not consider setup costs or capacity limitations.

Question 13

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 14

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

Accepted Answer

The economic order quantity (EOQ) lot sizing technique does use a formula that involves the square root of (2 x annual demand x setup cost) divided by carrying cost per unit. This formula balances the cost of setting up a production run (setup cost) with the cost of holding inventory (carrying cost) by calculating the optimal order quantity that minimizes total cost.

Question 15

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 economic order quantity (EOQ) lot sizing technique is designed to minimize inventory costs by determining the optimal order quantity that balances ordering costs and holding costs. This means that some product may be carried over into future periods to avoid excessive ordering costs. Therefore, the statement is false.

Question 16

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 is a correct description of the least unit cost method.

Question 17

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, updates are triggered by transactions that impact the item, resulting in requirements and schedules being updated. This differs from a gross change system where all items are recalculated regardless of whether or not there has been a change.

Question 18

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

Accepted Answer

Net change MRP updates the status of each item in real-time as operations occur in the system, making it an accurate reflection of the current status of each managed item.

Question 19

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

Accepted Answer

Lot-for-lot (L4L) is indeed the most common lot sizing technique, where the order size matches the demand exactly.

Question 20

Generally,determining lot sizes in MRP systems is simple.

Accepted Answer

Determining lot sizes in MRP systems can be complex as it involves considering various factors such as economic order quantity, production capacity, lead times, etc.

Quiz 9: Material Requirements Planning