Which of the following statements is true about the MRP plan when using lot-for-lot ordering? A) The quantity of gross requirements for a child item is always equal to the quantity of planned order releases for its parent. B) The quantity of gross requirements for a child item is equal to the quantity of planned order release(s) multiplied by the number of child items used in the parent assembly. C) The quantity of gross requirements for a child item is always equal to the quantity of gross requirements for its parent. D) The quantity and gross requirements for a child item is always equal to the quantity of net requirements for its parent. E) All of the above are true.

Question

Quizplus · Accepted Answer

Lot-for-lot ordering means that the planned order releases for a child item are equal to its gross requirements. The gross requirements for a child item are calculated by multiplying the number of child items required in the parent assembly by the gross requirements for the parent. Therefore, statement B is true. Statement A is incorrect because planned order releases can be different than gross requirements. Statement C is incorrect because gross requirements for a child item are determined by its usage in the parent assembly, not by the gross requirements of the parent. Statement D is incorrect because net requirements take into account on-hand inventory and scheduled receipts, while gross requirements do not.

Which of the Following Statements Is true about the MRP