Deck 12: MRP and ERP

Question 1

The bill of materials indicates how much material will be needed to produce the quantities on a given master production schedule.

Answer 1

False

Question 2

Net requirements equal gross requirements minus safety stock.

Answer 2

False

Question 3

The master production schedule states which end items are to be produced, in addition to when and how many.

Answer 3

True

Question 4

Initially, a master production schedule - the output from MRP - may not represent a feasible schedule.

Question 5

The inventory records contain information on the status of each item by time period.

Question 6

MRP is used within most MRP II and ERP systems.

Question 7

MRP, considering inventory position, bills of material, open purchase orders and lead times guarantees a feasible production plan if the inputs to MRP are accurate.

Question 8

The gross requirements value for any given component is equal to the net requirements of that component's immediate parent multiplied by the quantity per parent.

Question 9

The bill of materials contains information on lead times and current inventory position on every component required to produce the end item.

Question 10

The gross requirements at one level of an MRP plan determine the gross requirements at the next lower level continuing on down to the lowest levels shown on the bill of material.

Question 11

The term pegging refers to identifying the parent items that have generated a given set of material requirements for a part or subassembly.

Question 12

A net-change MRP system is one that is updated periodically but not less frequently than once a week.

Question 13

A bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item.

Question 14

An assembly-time chart indicates gross and net requirements taking into account the current available inventory.

Question 15

Low level coding represents items less than $18 per unit.

Question 16

The master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items.

Question 17

Lumpy demand for components results primarily from the periodic scheduling of batch production.

Question 18

MRP II did not replace or improve the basic MRP.

Question 19

Independent demand tends to be more 'lumpy' than dependent demand meaning that we need large quantities followed by periods of no demand.

Question 20

MRP works best if the inventory items have dependent demand.

Question 21

In MRP, EOQ models tend to be less useful for materials at the lowest levels than for upper level assemblies of the bill of materials since higher-level assemblies have larger dollar investments.

Question 22

MRP really doesn't apply to services since raw material isn't required.

Question 23

ERP implementation requires support and a direct mandate from the CEO because it impacts so many different functional areas.

Question 24

Capacity requirements planning (CRP) is an important feature in MRP+.

Question 25

Before a schedule receipt can take place, and order must be placed with a vendor.

Question 26

MRP II is simply an improved version of MRP that processes faster and can plan for a larger number of end items.

Question 27

ERP represents an expanded effort to integrate standardized record-keeping that shares information among different areas of an organization.

Question 28

Lot-for-lot ordering in MRP eliminates the holding costs for parts that are carried over to other periods.

Question 29

MRP output reports are divided into two main groups - daily and weekly.

Question 30

ERP began in manufacturing organizations but has spread into service organizations.

Question 31

Load reports show capacity requirements for departments or work centers which may be more or less than the capacity available in that work center.

Question 32

As long as a forecast is plus or minus 10%, MRP works well.

Question 33

Back flushing takes place after the production has been completed.

Question 34

Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods using forecasted demand to extend beyond the orders already received for those periods.

Question 35

One of the primary output reports of MRP concerns changes to planned orders.

Question 36

Project Management approaches can help in a conversion to an ERP system.

Question 37

One reason that accurate bills of material are important is that errors at one level become magnified at lower levels because of the multiplication process used by MRP.

Question 38

ERP automates the tasks involved in performing a business process, such as order fulfillment and financial reporting.

Question 39

Safety time is sometimes used in MRP rather than safety stock quantities.

Question 40

A regenerative MRP system is one that is updated continuously - every time there is a schedule change.

Question 41

A computer-based information system designed to handle ordering and scheduling of dependent-demand inventories is:

A)computer aided manufacturing (CAM)
B)computer integrated manufacturing (CIM)
C)economic order quantity (EOQ)
D)material requirements planning (MRP)
E)economic run size (ERS)

Question 42

Which of the following most closely describes dependent demand?

A)demand generated by suppliers
B)estimates of demand using regression analysis of independent variables
C)derived demand
D)demands placed on suppliers by their customers
E)net material requirements

Question 43

Under lot-for-lot, order sizes for component parts are essentially determined directly from which one of the following?

A)gross requirements
B)net requirements
C)economic order quantity
D)gross requirements - net requirements
E)net requirements - amount on-hand

Question 44

In an MRP master schedule, the planning horizon is often separated into a series of times periods called:

A)pegging
B)lead times
C)stacked lead times
D)time buckets
E)firm, fixed and frozen

Question 45

The development and application of MRP depended upon two developments: (1) the recognition of the difference between independent and dependent demand, and (2):

A)computers
B)development of the EOQ model
C)inventory control systems
D)blanket purchase orders
E)the internet

Question 46

In MRP, under lot-for-lot ordering, "planned-order receipts" are:

A)identical to "scheduled receipts"
B)identical to "planned-order releases"
C)open orders (that is, ordered before the first time bucket, but not delivered yet)
D)"gross requirements"
E)available to promise inventory

Question 47

Periodic updating of an MRP system to account for all changes which have occurred within a given time interval is called:

A)pegging
B)planned order release
C)net change
D)regenerative
E)exception report

Question 48

In MRP, "scheduled receipts" are:

A)identical to "planned-order receipts"
B)identical to "planned-order releases"
C)open orders (that is, ordered before the first time bucket, but not delivered yet)
D)"net requirements"
E)available to promise inventory

Question 49

A visual depiction of the subassemblies and components that are needed to produce and/or assemble a product is called a(n):

A)assembly time chart
B)product structure tree
C)MRP II
D)pegging
E)Gantt chart

Question 50

The MRP input stating which end items are to be produced, when they are needed, and what quantities are needed, is the:

A)master schedule
B)bill-of-materials
C)inventory-records
D)assembly-time chart
E)net-requirements chart

Question 51

Which one of the following most closely describes net material requirements?

A)gross requirements - amount on-hand - scheduled receipts
B)gross requirements - planned receipts
C)gross requirements - order releases + amount on-hand
D)gross requirements - planned order releases
E)gross requirements - amount on-hand + planned order releases

Question 52

The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to produce one unit of finished product is the:

A)master production schedule
B)bill-of-materials
C)inventory-records
D)assembly-time chart
E)net-requirements chart

Question 53

The identification of parent items is called:

A)Paternity
B)Pegging
C)Requirement I.D.
D)Relationship tracking
E)Master Scheduling

Question 54

The output of MRP is:

A)gross requirements
B)net requirements
C)a schedule of requirements for all parts and end items
D)inventory reorder points
E)economic order quantities and reorder points

Question 55

An MRP system whose records are updated continuously is referred to as a(n):

A)regenerative system
B)batch-type system
C)Plossl-Wright system
D)net-change system
E)gross-change system

Question 56

ERP implementation probably won't require:

A)cross functional teams
B)just a few weeks to install
C)intensive training
D)high funding for both initial cost and maintenance
E)frequent upgrades after installation

Question 57

The MRP input storing information on the status of each item by time period (e.g., scheduled receipts, lead time, lot size) is the:

A)master production schedule
B)bill-of-materials
C)inventory-records
D)assembly-time chart
E)net-requirements chart

Question 58

Which one of the following is not an input in an MRP system?

A)planned-order schedules
B)bill of materials
C)master production schedule
D)inventory records
E)All are inputs.

Question 59

Which is true of a net-change system?

A)It is a batch-type system which is updated periodically.
B)It is usually run at the beginning of each month.
C)The basic production plan is modified to reflect changes as they occur.
D)It is used to authorize the execution of planned orders.
E)It indicates the amount and timing of future changes.

Question 60

In MRP, the gross requirements of a given component part are calculated from:

A)net requirements + amount on-hand.
B)gross requirements of the immediate parent.
C)planned orders of the end item.
D)net requirements of end item.
E)planned orders of the immediate parent.

Question 61

Which of the following lot sizing methods does not attempt to balance ordering (or setup) and holding costs?

A)economic order quantity
B)economic run size
C)lot-for-lot
D)part-period
E)all of the above

Question 62

The _________ of ERP makes it valuable as a strategic planning tool.

A)Internet base
B)Rapid Batch capability
C)Employee focus
D)Real-time aspect
E)Database structure

Question 63

Which of the following is not usually necessary in order to have an effective MRP system?

A)a computer and software
B)an accurate bill of materials
C)lot-for-lot ordering
D)an up-to-date master schedule
E)integrity of file data

Question 64

A recent effort to expand the scope of production resource planning by involving other functional areas in the planning process has been:

A)material requirements planning
B)capacity requirements planning
C)manufacturing resources planning
D)Just-In-Time planning
E)multifunctional relationships planning

Question 65

Given the following data, construct a material requirements plan which will result in 100 units of Parent #1 (P1) at the beginning of week 6, and 200 units of Parent #2 (P2) at the beginning of week 8:
B.

Question 66

Which one of the following most closely describes the MRP approach that is used for components or subassemblies to compensate for variations in lead time?

A)pegging
B)safety stock
C)increased order sizes
D)safety time
E)low-level coding

Question 67

If 40 Ps are needed, and on-hand inventory consists of 15 Ps and 10 each of all other components and subassemblies, how many Cs are needed?

A)340
B)350
C)380
D)400
E)590

Question 68

Which of these items would be most likely to have dependent demand?

A)Xbox batteries
B)toy trains
C)flowers
D)chocolate chip cookies
E)wrist watches

Question 69

Develop a material requirements plan for end item P and its components, given the tree below.Assume that all lead times are one week, and that lot-for-lot ordering is used except for item F, which is ordered in multiples of 400 units.
One hundred units of P should be available at the start of week 4 and at the start of week 8.Beginning inventories are: 20 P, 100 A, and 200F.
Scheduled receipts are: 800 F at the start of week 1.

Question 70

The multiplication process used by MRP to determine lower level requirements is called:

A)time-phasing
B)pegging
C)netting
D)projecting
E)exploding

Question 71

Which statement concerning MRP II is false?

A)It is basically a computerized system.
B)It can handle complex planning and scheduling quickly.
C)It involves other functional areas in the production planning process.
D)It involves capacity planning.
E)It produces a production plan which includes all resources required.

Question 72

If 17 Ps are needed, and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns, how many Cs are needed?

A)48
B)144
C)192
D)212
E)272

Question 73

When MRP II systems include feedback, they are known as:

A)MRPIII
B)Enterprise resource planning
C)Circular MRP
D)Feasible MRP
E)Closed Loop MRP

Question 74

The following is a list of components required to produce one unit of end item P:
P: 2 A's, 3 B's, 3 C's
A: 5 M's, 2 R's
B: 1 D, 3 N's.
C: 1 T, 4 N's
M: 1 N
Determine the number of N's that will be needed to make 60 P's in each of these cases:
(A) There are currently 10 P's on hand.
(B) On-hand inventory consists of 15 P's, 10A's, 20 B's, 10 C's, 100 N's, 300 T's, and 200 M's.

Question 75

Given the following information, construct a product tree diagram and develop a material requirements plan that will lead to 400 units of product P being available at the start of week 7.

Question 76

Using the product tree shown, determine the following:
(A) the quantity of component K that will be needed to assemble 80 units of P, assuming no on-hand inventory of any components exists.
(B) the quantity of component K needed to assemble 80 units of P, given on-hand inventory of 30 A's, 50 B's and 20 C's.

Question 77

End item Alpha's product structure tree and inventory information are as follows:

Question 78

_______ is choosing how many to order or make.

A)Quantity determination
B)Package sizing
C)Lot sizing
D)Grouping
E)Aggregation

Question 79

Which of these products would be most likely to have dependent demand?

A)refrigerators
B)automobile engines
C)televisions
D)brownies
E)automobiles

Question 80

If 17 Ps are needed, and no on-hand inventory exists for any items, how many Cs will be needed?

A)8
B)16
C)136
D)204
E)272