Deck 13: Resource Planning

Question 1

Table 13.3
Consider the following MPS, BOM, and inventory data. You will need a blank MRP record to answer the question(s).
Week

Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Item


Master Production Schedule: the following table shows the MPS start quantities.
Use the information in Table 13.3. Which one of the following statements about item E is TRUE?

A) There will be an action notice to expedite the scheduled receipt up to week 2.
B) There is one planned receipt for the next 6 weeks.
C) There is a planned order release of 250 units in week 3.
D) There is a planned receipt of 250 units in week 2.

Answer 1

There will be an action notice to expedite the scheduled receipt up to week 2.

Question 2

One of the differences between Enterprise Resource Planning (ERP) and MRPII is that

A) ERP is limited to operations internal to the enterprise.
B) ERP is linked to the external supply chain, but MRPII is not.
C) ERP applies only to those operations that are external to the enterprise.
D) ERP includes both manufacturing and service operations.

Answer 2

ERP is linked to the external supply chain, but MRPII is not.

Question 3

The action notice is a

A) secret document to prompt actions to be taken against some suppliers.
B) computer- generated document that helps make decisions about releasing new orders.
C) document that records the most recent important actions taken in the context of MRP.
D) legal notice served by a customer whose order was delayed.

Answer 3

computer- generated document that helps make decisions about releasing new orders.

Question 4

Table 13.6

Use the information from Table 13.6. What is the planned receipts quantity in week 3?

A) 0 units
B) 10 units
C) 20 units
D) 30 units

Question 5

Complete the following MRP record in order to answer the question. How many action notices will there be for item XYZ?

A) 0
B) 1
C) 2
D) 3 or more

Question 6

Management wishes to use a POQ lot- sizing rule for an item that experiences an average demand of 30 units per week. If the desired average lot size is 120 units, what should P be?

A) 0 or 1 weeks
B) 2 or 3 weeks
C) 4 or 5 weeks
D) More than 5 weeks

Question 7

Which best defines the gross requirements for a component item?

A) the forecasted customer demand for the component
B) the total demand for the component derived from all immediate parents
C) the sum of gross requirements for all parents of the component
D) the amount of safety stock needed to buffer against uncertainties

Question 8

Which of the following statements about MRP II is TRUE?

A) It provides more extensive information than MRP because it is tied to the company's financial system.
B) It incorporates informal systems through the use of expert systems technology.
C) It is computationally faster than regular MRP.
D) It is limited only to aiding order- launching decisions.

Question 9

Use the following MRP record to answer the question. How large is the second planned order release?

A) less than or equal to 50 units
B) greater than 50 units but less than or equal to 100 units
C) greater than 100 units but less than or equal to 150 units
D) greater than 150 units

Question 10

Use the following MRP record to answer the question. What are the quantities of planned order releases for item DEF for the first five weeks (weeks 1, 2, 3, 4, and 5)?

A) 0, 30, 60, 0, 0
B) 30, 0, 60, 145, 0
C) 60, 0, 145, 0, 0
D) 30, 0, 60, 0, 145

Question 11

The purpose of Finite Capacity Scheduling is to

A) schedule a group of jobs across all work centers.
B) schedule all jobs for a finite amount of time.
C) limit the total capacity to be used in a day.
D) schedule by hand when MRP fails.

Question 12

Use the following MRP record to answer the question. How many action notices are needed for item A?

A) 0
B) 1
C) 2
D) 3 or more

Question 13

Table 13.5.

Use the information in Table 13.5. Which of the statements concerning item RST is TRUE? (Examine each answer independently.)

A) If the scheduled receipt in week 2 were delayed until week 3, there would be a planned order release in week 1.
B) If the gross requirements for week 8 were 100 units instead of 60 units, the projected on- hand inventory for week 8 would be 0 units.
C) If the safety stock level was 20 units instead of 0 units, there would be a planned order release in week 2.
D) If the safety stock level were 30 units instead of 0 units, the planned receipt in week 7 would be 110 units.

Question 14

Which one of the following is an MRP lot- sizing rule that attempts to minimize the amount of average inventory?

A) Fixed order quantity (FOQ)
B) Periodic order quantity (POQ), with P = 2
C) Economic order quantity (EOQ)
D) Lot for lot (L4L)

Question 15

Table 13.7.

Use the information from Table 13.7. If a POQ lot- sizing rule is used, where P = 3, how many planned order releases are there for item XYZ?

A) 0 or 1
B) 2 or 3
C) 4 or 5
D) more than 5

Question 16

A technique for projecting time- phased requirements for critical workstations is a definition of

A) distribution requirements planning.
B) capacity requirements planning.
C) manufacturing resource planning.
D) material requirements planning.

Question 17

Which of the following statements about MRP is TRUE?

A) MRP may generate a planned order release that exceeds current production capacity.
B) MRP always recognizes capacity limitations in production as well as human resources.
C) Capacity limitations are implicit in all MRP calculations.
D) MRP recognizes the capacity limitations in production, but not in human resources.

Question 18

Table 13.7

Use the information from Table 13.7. If a FOQ of 75 units is used, how many planned order releases are there for item XYZ?

A) 0 or 1
B) 2 or 3
C) 4 or 5
D) more than 5

Question 19

Table 13.3
Consider the following MPS, BOM, and inventory data. You will need a blank MRP record to answer the question(s).
Master Production Schedule: the following table shows the MPS start quantities.
Week

Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Item

Use the information in Table 13.3. Which one of the following statements about item C is TRUE?

A) It has a planned receipt of 80 units in week 3.
B) It has a planned receipt of 180 units in week 6.
C) Its first planned order release is for 130 units in week 1.
D) Its second planned order release is for 200 units in week 3.

Question 20

A term for systems that are large, integrated information systems which support many enterprise processes and data storage needs is called

A) standard resource planning.
B) material resource planning.
C) enterprise resource planning.
D) effective resource planning.

Question 21

Which one of the following statements concerning MRP is TRUE?

A) The scheduled receipts for a parent item are used to calculate the gross requirements for components of that parent.
B) Some of the key inputs to a computerized MRP system are inventory records, updated bills of material, and a valid master production schedule.
C) One of the main prerequisites for implementing an MRP system is to have products with few BOM levels.
D) Benefits of a successful MRP implementation typically include a decrease in the number of inventory turns, and an increase in the number of expediters.

Question 22

Table 13.1

Use the information in Table 13.1. In which week will the second planned order release occur?

A) Week 1
B) Week 2
C) Week 3
D) Week 4, 5, 6, 7 or 8

Question 23

Table 13.3
Consider the following MPS, BOM, and inventory data. You will need a blank MRP record to answer the question(s).
Master Production Schedule: the following table shows the MPS start quantities.
Week

Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Item

Use the information in Table 13.3. Which one of the following statements on item C is TRUE?

A) There will be more than two action notices.
B) There will be exactly two action notices, to release a new order and delay the scheduled receipt.
C) There will be exactly one action notice, to release a new order.
D) There will be no action notices for item C.

Question 24

Table 13.5.

Use the information in Table 13.5. Which one of the statements concerning item RST is TRUE?

A) The first planned receipt occurs in week 5.
B) There are exactly two planned order releases needed.
C) There is an action notice needed to expedite the schedule receipt by one week.
D) The planned receipt in week 7 is 80 units.

Question 25

Table 13.8
Sunshine Manufacture produces three products, X, Y, and Z. The production of these end items is controlled by an MRP
system. Each end item X is assembled with two components of A and one component of B. Each end item of Y is assembled
with two components of C and one component of A, each component of C is manufactured from one unit of B. End item Z is
assembled from one unit of D and one unit of C, D is manufactured from one unit of A, and C is manufactured from one unit
of B.
Use the information in Table 13.8. If level- by- level processing is used, what is a correct order for processing components A, B, C, and D?

A) A B C D
B) D A B C
C) C B A D
D) C D A B

Question 26

Table 13.3
Consider the following MPS, BOM, and inventory data. You will need a blank MRP record to answer the question(s).
Master Production Schedule: the following table shows the MPS start quantities.
Week

Bill of Material
-End item A uses 1 each of component C and 1 each of subassembly D.
-Subassembly D uses 2 each of component E and 2 each of component F.
-End item B uses 1 each of component C and 2 each of component F.
Selected Inventory Data
Item

Use the information in Table 13.3. Which one of the following statements about item F is TRUE?

A) Its first planned receipt is for 215 units in week 4.
B) There will be exactly one action notice, which calls for the release of a new order.
C) There will be exactly one action notice, which calls for the delay of the scheduled receipt until week 2.
D) The first planned order release is for 205 units in week 3.

Question 27

Table 13.7

Use the information from Table 13.7. If a FOQ of 100 units is used, how many planned order releases are there for item XYZ?

A) 0 or 1
B) 2 or 3
C) 4 or 5
D) more than 5

Question 28

Use the following MRP record to answer the question. What are the quantity and the week of the first planned order release?

A) 150 units: week 2
B) 140 units; week 2
C) 150 units; week 1
D) 20 units; week 1

Question 29

Which one of the following statements about lot- sizing rules is TRUE?

A) If the POQ rule is used, an item's lot size can vary each time an order is placed.
B) The periodic order quantity (POQ) rule seeks to create inventory remnants.
C) The lot for lot (L4L) rule is a special case of the fixed order quantity (FOQ) rule.
D) All lot- sizing rules seek to minimize inventory levels.

Question 30

Table 13.2.

Use the information in Table 13.2. How many planned order releases are there for item XYZ?

A) 3
B) 4 or more
C) 0
D) 1 or 2

Question 31

Which one of the following systems is an input to the MRP system?

A) purchasing system
B) master production scheduling system
C) financial reporting system
D) shop floor scheduling system

Question 32

Use the following MRP record to answer the following question. What is the planned order release quantity in week 4?

A) 0 units
B) greater than 0 units but less than or equal to 50 units
C) greater than 50 units but less than or equal to 100 units
D) greater than 100 units

Question 33

Planned lead time for purchased items is

A) order processing time.
B) setup time plus materials handling time plus waiting time.
C) time difference between when the order was issued and when it would be received from the supplier.
D) setup time plus processing time plus waiting time.

Question 34

The underlying logic for level- by- level processing in an MRP system is

A) all parents of an item must be processed before that item is processed.
B) items without safety stock quantities must be processed before items that have safety stocks greater than zero.
C) each item in a bill of material must be processed from the bottom up.
D) items must be processed in order of increasing lead time.

Question 35

Use the following MRP record to answer the question. What are the quantities of planned order releases for item XYZ for the first six weeks (weeks 1, 2, 3, 4, 5, and 6)?

A) 35, 0, 60, 0, 0, 0
B) 5, 30, 0, 40, 20, 0
C) 35, 0, 0, 40, 20, 0
D) 35, 0, 0, 60, 0, 0

Question 36

A resource planning process takes

A) buying and production plan; processes information in the way of time standards, routings, and other information on how the firm produces its services or products; and then plans the input requirements.
B) sales and operation plan; processes information in the way of time standards, routings, and other information on how the firm produces its services or products; and then plans the input requirements.
C) marketing and distribution plan; processes information in the way of time standards, routings, and other information on how the firm produces its services or products; and then plans the input requirements.
D) modelling and branding plan; processes information in the way of time standards, routings, and other information on how the firm produces its services or products; and then plans the input requirements.

Question 37

Use the following MRP record to answer the question. What will be the projected on- hand inventory quantity in week 8?

A) less than or equal to 30 units
B) greater than 30 units but less than or equal to 60 units
C) greater than 60 units but less than or equal to 90 units
D) greater than 90 units

Question 38

Table 13.7.

Use the information from Table 13.7. If a L4L lot- sizing rule is used, how many planned order releases are there for item XYZ?

A) 0 or 1
B) 2 or 3
C) 4 or 5
D) more than 5

Question 39

One of the three types of MRP action notices possible is releasing a new order. Which one of the following statements is TRUE about releasing a new order?

A) Release an order when the first period's gross requirements quantity is equal to zero.
B) Release a separate order for service parts.
C) Release an order when there is a nonzero quantity in the scheduled receipt row.
D) Release an order when there is a nonzero quantity in the first period's planned order release row.

Question 40

MRP explosion means estimating the total number of

A) parts to be produced for each parent item.
B) parts needed to be produced less the number of parts on hand for each parent item.
C) raw materials to be purchased from all suppliers.
D) subassemblies, components, and raw materials needed for each parent item.

Question 41

Table 13.6.

Use the information from Table 13.6. If the lot- sizing rule were L4L instead of FOQ = 30 units, what would be the planned order release quantity week 1?

A) 0 units
B) 10 units
C) 20 units
D) 40 units

Question 42

Management wishes to use a FOQ lot- sizing rule for an item based on the economic order quantity. If the annual demand is 1200 units, the holding cost is $10/unit/year, and the setup cost is $50/lot, which one of the following fixed order quantities is most appropriate?

A) 90 units
B) 110 units
C) 130 units
D) 150 units

Question 43

Which of the following statements on MRP is TRUE?

A) MRP is an inventory control system that derives the gross requirements of the end items from purchase commitments with vendors.
B) The payoffs from MRP tend to be greater when there are more BOM levels and larger lot sizes.
C) The fixed order quantity (FOQ) eliminates remnants.
D) When MRP systems are enhanced to include financial reporting they are called basic MRP systems, or "little mrp."

Question 44

Table 13.4
Consider the MPS, BOM and inventory data shown below. Master Production Schedule: the following table shows the MPS
start quantities.
Week

Bill of Material
-Item A uses 1 each of component D, 2 each of component C and 2 each of subassembly B.
-Subassembly B uses 1 each of component D.
Selected Inventory Data
Item

Use the information in Table 13.4. What are the total planned receipts for item D? (Sum up the planned receipts for all periods.)

A) less than or equal to 80 units
B) greater than 80 units but less than or equal to 100 units
C) greater than 100 units but less than or equal to 240 units
D) greater than 240 units.

Question 45

Table 13.4
Consider the MPS, BOM and inventory data shown below. Master Production Schedule: the following table shows the MPS
start quantities.
Week

Bill of Material
-Item A uses 1 each of component D, 2 each of component C and 2 each of subassembly B.
-Subassembly B uses 1 each of component D.
Selected Inventory Data
Item

Use the information in Table 13.4. When does the first planned order release for item C occur?

A) Week 1 or 2
B) Week 3
C) Week 4
D) No planned order releases needed

Question 46

Which of the following statements about lot- sizing rules for MRP is TRUE?

A) The lot- for- lot rule minimizes inventory investment, but maximizes the number of orders placed.
B) The periodic order quantity (POQ) rule generates a higher level of average inventory, because it creates inventory remnants.
C) In general, the fixed order quantity rule introduces greater instability into the production process.
D) FOQ reduces the amount of inventory on hand, by doing a better job of matching the order quantity the projected on- hand inventory quantity.

Question 47

Table 13.1.

Use the information in Table 13.1. If the safety stock level were 30 units instead of 0 units, in which week would the first planned receipt occur?

A) Week 1
B) Week 2 or 3
C) Week 4 or 5
D) Week 6 or 7

Question 48

Use the following MRP record to answer the question. What is the total planned order release quantity for item QRS? (Sum up the planned order releases for all 8 weeks)

A) less than or equal to 100 units
B) greater than 100 units but less than or equal to 200 units
C) greater than 200 units but less than or equal to 300 units
D) greater than 300 units

Question 49

The Bill of Resources is a list of

A) staff time needed to manufacture an item.
B) all resources needed to provide a service.
C) staff time needed to provide a service.
D) raw materials needed to provide a service.

Question 50

Table 13.4
Consider the MPS, BOM and inventory data shown below. Master Production Schedule: the following table shows the MPS
start quantities.
Week

Bill of Material
-Item A uses 1 each of component D, 2 each of component C and 2 each of subassembly B.
-Subassembly B uses 1 each of component D.
Selected Inventory Data
Item

Use the information in Table 13.4. Which one of the following statements concerning item B is TRUE?

A) The first planned order release occurs in week 3.
B) There are exactly 2 planned order releases.
C) The projected on- hand quantity at the end of week 6 is 60 units.
D) There are no action notices needed.

Question 51

Which of the following statements regarding the output from MRP systems is FALSE?

A) A materials requirement plan is generated for each component item.
B) Action notices are generated to make decisions about releasing new orders and adjusting the due dates of scheduled receipts.
C) Priority reports such as dispatch lists and supplier schedules are generated.
D) Typically the capacity limitations of processing equipment are explicitly recognized by MRP systems when planned orders are calculated.

Question 52

The lot- sizing rule that generates the highest level of average inventory because it creates inventory remnants is

A) periodic order quantity (POQ).
B) lot- for- lot (L4L).
C) fixed order quantity (FOQ).
D) usage quantity.

Question 53

If a planned receipt for an item is due in week 6 and the item's lead time is 2 weeks, in which week will the corresponding planned order release occur?

A) Week 2
B) Week 4
C) Week 6
D) Week 8

Question 54

A higher than normal level of equipment failures on the shop floor is likely to be detected from which of the following reports?

A) overhead allocation report
B) vendor shortage report
C) input/output control report
D) customer forecast report

Question 55

Table 13.7.

Use the information from Table 13.7. Which lot sizing rule results in the highest average inventory?

A) POQ, P = 3
B) FOQ = 75
C) FOQ = 100
D) L4L

Question 56

Which one of the following statements about MRP is best?

A) The fixed order quantity rule results in remnants.
B) MRP uses a level- by- level processing procedure; the component items are processed first.
C) An action notice should be issued if the scheduled receipt in a period is less than the projected on- hand inventory for that period.
D) The periodic order quantity rule introduces remnants that are used as a buffer against uncertainties.

Question 57

Use the following MRP record to answer the question. Which one of the following statements about item QRS is TRUE?

A) The total planned order release quantity (summing up all 8 weeks) is 190 units.
B) The first planned receipt occurs in week 1.
C) Exactly 1 action notice is needed.
D) The second planned order release quantity is 90 units.

Question 58

Table 13.2.

Use the information in Table 13.2. If the lot sizing was POQ (P = 3) instead of L4L, how many planned order releases would there be?

A) 0
B) 1 or 2
C) 3
D) 4 or more

Question 59

Planned lead time for items manufactured in- house includes

A) setup time.
B) materials handling and waiting times.
C) process time.
D) all the above

Question 60

Which of the following statements about Enterprise Resource Planning (ERP) is TRUE?

A) ERP is specifically designed for salespersons that want to access the system away from the office.
B) ERP allows customers to access the system.
C) ERP does not include quality management.
D) ERP is similar to MRPII, except that it extends to service operations.

Question 61

Which one of the following is a feature of MRP II, but not available in basic MRP systems?

A) action notices
B) capacity reporting
C) financial reporting
D) dispatch lists

Question 62

MRP _________ is a process that converts the requirements of various final products into a material requirements plan that specifies the replenishment schedule of all the subassemblies, components, and raw materials needed by the final products.

Question 63

In MRP, a(n) _______ is any item manufactured from one or more components.

Question 64

A(n) _________ is a record of all the required materials, equipment time, staff, and other resources needed to provide a service, the parent- component relationship, and the usage quantities.

Question 65

The _________ is a record of all components of an item, the parent- component relationships, and usage quantities derived from engineering and process design.

Question 66

In MRP, a(n) _________ is an item that may go through one or more operations to be transformed into or become part of one or more parents.

Question 67

_________ demand occurs because the quantity required is a function of the demand for the other items held in inventory.

Question 68

Table 13.8
Sunshine Manufacture produces three products, X, Y, and Z. The production of these end items is controlled by an MRP
system. Each end item X is assembled with two components of A and one component of B. Each end item of Y is assembled
with two components of C and one component of A, each component of C is manufactured from one unit of B. End item Z is
assembled from one unit of D and one unit of C, D is manufactured from one unit of A, and C is manufactured from one unit
of B.
Use the information in Table 13.8. If item C has a manufacturing lead time of two weeks and a planned receipt of 65 units is needed in week 4, which of the following statements is TRUE?

A) The planned order release in week 2 for item C is 130 units.
B) The gross requirements for item B in week 2 is 65 units.
C) The gross requirements for item B in week 2 is 130 units.
D) The gross requirements for item B in week 4 are at least 65 units.

Question 69

Explain why MRP does a better job of estimating the need to replenish inventory items than does the fixed order quantity system in a dependent demand environment.

Question 70

A(n) _________ item is the final product sold to a customer.

Question 71

_________ is a computerized information system developed specifically to aid in managing dependent demand inventory and scheduling replenishment orders.

Question 72

_________ are orders that have not yet been released to the shop or the supplier.

Question 73

An _________ is a company- wide process that cuts across functional areas, business
units, geographic regions, and product lines.

Question 74

_________ is a lot- sizing rule that maintains the same order quantity each time an order is issued.

Question 75

Which one of the following statements about material requirements planning is TRUE?

A) The distinctive advantages of MRP are greater when there are many BOM levels, large lot sizes, and a manufacturing environment that is not too volatile.
B) Survey results show that most companies adopting MRP have a purely line flow strategy.
C) MRP is intended mainly for MRO (maintenance, repair, and operating supplies) items where the demands are not too "lumpy."
D) The more volatile the manufacturing environment, the more likely it is that an MRP installation will be successful.

Question 76

Use the following MRP record to answer the question. Which one of the statements concerning item LMN is TRUE?

A) The planned receipt quantity in week 6 is 30 units.
B) There will be exactly 2 action notices needed.
C) The projected on- hand inventory in week 8 is 70 units.
D) The planned order release quantity in week 4 is 80 units.

Question 77

In an MRP system, a(n) _________ item has at least one parent and at least one component.

Question 78

_________ systems are large, integrated information systems that support many enterprise
processes and data storage needs.

Question 79

Which of the following statements about MRP is TRUE?

A) MRP gross requirements for a parent item are equal to the planned order releases of its components.
B) MRP gross requirements for a component depend on the planned order releases of its immediate parents.
C) To be classified as a successful MRP user, a company must use either the L4L or POQ rules for lot sizing.
D) MRP logic is based on the logic of uniform, continuous demand, and item independence.

Question 80

Which of the following statements concerning MRP is TRUE?

A) Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order releases to estimate capacity requirements for critical workstations.
B) The most accurate way to forecast dependent demand is to examine past usage rates.
C) MRP systems use independent demands for each component item.
D) Dependent demand items tend to experience relatively constant demand rates.