CH14-Market Planning - For POM PDF

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File: ch14, Chapter 14: Materials Planning

Multiple Choice

1. What does ERP stand for? a) educational resources planning b) enterprise resource planning c) enterprise reliability production d) end routing procedure e) easy resource planning Ans: b Section Ref: Enterprise Resource Planning Level: easy

2. ERP is software designed for _____ and ____ business processes. a) calculating, budgeting b) deleting, changing c) organizing, managing d) organizing, budgeting e) selecting, managing Ans: c Section Ref: Enterprise Resource Planning Level: easy

3. What is an information system designed to integrate internal and external members of the supply chain? a) material requirements planning b) master production schedule c) capacity requirements planning d) aggregate planning e) enterprise resource planning Ans: e Section Ref: Enterprise Resource Planning Level: easy

4. Owens Corning reported savings of ______________ by using ERP. a) $6 million b) $16 million c) $65 million

d) $600 million e) $660 million Ans: c Section Ref: Enterprise Resource Planning Level: hard

5. Which of the following is not one of the four basic categories of ERP modules? a) finance and accounting b) information systems c) sales and marketing d) production and materials management e) human resources Ans: b Section Ref: Enterprise Resource Planning Level: moderate

6. Which ERP module includes investment management? a) finance and accounting b) information systems c) sales and marketing d) production and materials management e) human resources Ans: a Section Ref: Enterprise Resource Planning Level: moderate

7. Which ERP module handles billing? a) finance and accounting b) information systems c) sales and marketing d) production and materials management e) human resources Ans: c Section Ref: Enterprise Resource Planning Level: hard

8. Which ERP module includes work-flow analysis? a) finance and accounting b) information systems c) sales and marketing

d) production and materials management e) human resources Ans: e Section Ref: Enterprise Resource Planning Level: hard

9. What proportion of U.S. companies with greater than $1 billion in annual revenues has implemented ERP? a) 10% b) 20% c) 40% d) 75% e) 95% Ans: c Section Ref: Enterprise Resource Planning Level: hard

10. The ERP system provides a single interface: a) to operations only. b) to operations and inventory control only. c) to external members of the supply chain as well. d) to the company management structure only. e) to customers only. Ans: c Section Ref: The Evolution of ERP Level: moderate

11. Second generation ERP systems addressed the first generation deficiency of: a) inadequate statistics b) interdepartmental communications c) integrated modules d) continuous planning capabilities e) forecasting capabilities Ans: d Section Ref: The Evolution of ERP Level: moderate

12. ERP systems provide _____ and _____ benefits. a) tangible, HR b) intangible, marketing

c) marketing, operation d) tangible, intangible e) CEO, CFO Ans: d Section Ref: The Benefits of ERP Level: moderate

13. Second-generation ERP systems are referred to as ________________________ software. a) scheduling b) MRP c) inventory management d) MPS e) supply chain management Ans: e Section Ref: Enterprise Resource Planning Level: moderate

14. _______________ MRP is an MRP system that includes production planning, master production scheduling, and capacity requirements planning. a) Fully-integrated b) Closed-loop c) Open-loop d) Wide-range e) Enterprise Ans: b Section Ref: The Cost of ERP Systems Level: easy

15. The most critical factors for successful EPR implementation are ______ and ______ ______ ______ a) leadership, top management commitment b) leadership, technological transfer management c) management, technological transfer management d) funding, top management commitment e) leadership, detailed technical specifications Ans: a Section Ref: The Cost of ERP Systems Level: moderate

16. What information system enables companies to have the right material in the right amounts available at the right time? a) manufacturing resources planning b) multifunctional requirements planning c) material requirements planning d) material relationships planning e) manufacturing requirements planning Ans: c Section Ref: The Cost of ERP Systems Level: easy

17. Companies use to check that enough work is scheduled for operations and that the amount of work scheduled is feasible. a) capacity management b) closed-loop requirements planning c) cut requirements planning d) capacity resources planning e) capacity requirements planning Ans: e Section Ref: The Cost of ERP Systems Level: easy

18. Independent demand is the demand for ________________________________. a) finished products b) subassemblies c) parts d) raw materials e) components Ans: a Section Ref: Material Planning Systems Level: easy

19. In the mid-1970’s, MRPII, was developed. One of its major components is: a) leadership b) inventory management c) operations execution d) strategic management e) marketing Ans: c Section Ref: Material Planning Systems Level: moderate

20. Which of the following most closely describes dependent demand? a) demand generated by suppliers b) demand that is seasonal c) demand estimates using regression analysis d) demand derived from finished products e) demand for repair parts Ans: d Section Ref: Material Planning Systems Level: moderate

21. A computer-based information system designed to manage dependent demand inventory is _____________. a) manufacturing resources planning b) multifunctional requirements planning c) material relationships planning d) material requirements planning e) manufacturing requirements planning Ans: d Section Ref: Material Planning Systems Level: moderate

22. The a) master production schedule b) bill of material c) inventory records d) material needs e) build structure

file lists the materials needed to build a product.

Ans: b Section Ref: Material Planning Systems Level: moderate

23. CRP systems are used to check that the amount of work: a) meets the MRP directive. b) meets the ERP directive. c) will make a profit. d) is feasible. e) meets OSHA requirements. Ans: d Section Ref: An Overview of MRP Level: easy

24. The details the company’s planned products, quantity, and the schedule used by marketing when promising deliveries. a) master production schedule b) bill of material c) inventory records d) material product sales e) promised deliveries Ans: a Section Ref: Types of Demand Level: moderate

25. The to be procured. a) master production schedule b) bill of material c) inventory records d) material inventories e) promised deliveries

is (are) checked for the materials on hand and those that need

Ans: c Section Ref: Objectives of MRP Level: moderate

26. MRP develops a time period. a) DSI report b) snapshot forecast c) requirements plan d) material movements schedule e) time-phased schedule

that shows future demand, supply and inventories by

Ans: e Section Ref: Types of Demand Level: moderate

27. In MRP, the starting points for each part and material needed to accomplish the master production schedule are the ________________________. a) net requirements b) gross requirements c) planned releases d) scheduled receipts e) planned receipts

Ans: b Section Ref: Types of Demand Level: moderate

28. Which of the following is not true concerning replenishment orders? a) They are generated when there is not enough inventory. b) MRP specifies when to place the order. c) The order may be for material from a supplier. d) They are orders for the final product. e) The order may be for material from the manufacturing floor. Ans: d Section Ref: Types of Demand Level: moderate

29. Which of the following is an objective of MRP? a) Keep priorities updated and valid. b) Keep track of material movements on the shop floor. c) Provide information for expediting orders. d) Allocate scarce parts to products. e) Provide information for activity based costing. Ans: a Section Ref: Types of Demand Level: moderate

30. The authorized MPS is a statement of _____________________________________________________. a) manufacturing orders that have been authorized for release to the shop floor b) which workers are authorized to work on which machines c) what the company expects to build and when it expects to build it d) authorized payments to vendors e) where different end products are authorized to be manufactured Ans: c Section Ref: Types of Demand Level: moderate

31. The quantity of the replenishment order is based on the __________________________________. a) capacity available b) size of the item c) number of workers available

d) inventory space available e) lot sizing rule used Ans: e Section Ref: Types of Demand Level: moderate

32. Information that may be contained in the inventory records file includes all except which of the following? a) part numbers b) run times for manufactured parts c) part names d) lead times e) safety stock requirements Ans: b Section Ref: Objectives of MRP Level: moderate

33. The time interval necessary to either manufacture or purchase an item is its ______________________. a) time fence b) lead time c) safety time d) time bucket e) receipt time Ans: b Section Ref: Objectives of MRP Level: moderate

34. Information in the inventory records file that can change with inventory transactions includes the ________. a) part number b) lot size rule c) projected inventory level d) lead time e) safety stock requirement Ans: c Section Ref: Objectives of MRP Level: hard

35. An error in replenishment ordering can result from a(n) ____________________________________. a) inaccuracy in the inventory records file b) breakdown of equipment c) expediting of an order d) circumstance of working excessive overtime e) error in accounts receivables Ans: a Section Ref: Objectives of MRP Level: hard

36. What is a technique for improving inventory record accuracy? a) cycle counting b) drum, buffer, rope c) Kanban d) tracking signal e) statistical process control Ans: a Section Ref: Objectives of MRP Level: moderate

37. Gross requirements for finished products are taken from _____________________________________. a) the inventory records file b) the order entry file c) the authorized MPS d) the bill of materials file e) forecasted sales Ans: c Section Ref: MRP Inputs Level: moderate

38. When there is insufficient inventory to satisfy the forecast for a particular period a(n)____ order must be placed. a)BOM b) restock c) inventory request d) MPS e) MRP Ans: d Section Ref: MRP Inputs Level: moderate

39. Scheduled receipts are _________________________________________. a) planned orders b) planned orders offset by lead time c) gross requirements offset by lead time d) gross requirements minus inventory e) replenishment orders that have been placed but not yet received Ans: e Section Ref: MRP Inputs Level: moderate

40. For every scheduled receipt in an MRP table, there is also in the organization a(n) __________________. a) shop floor order b) order that has been placed but not yet been received c) planned order d) period order e) dispatch list Ans: b Section Ref: MRP Inputs Level: hard

41. For any period the beginning inventory, plus any replenishment orders due, less the gross requirement equals a) planned orders b) projected available quantity c) scheduled receipts d) lead time e) safety stock Ans: b Section Ref: MRP Inputs Level: moderate

42. The beginning inventory for any time period is equal to _____________________________________. a) safety stock plus gross requirements from the previous period b) scheduled receipts plus projected available quantity c) planned orders plus scheduled orders d) projected available quantity from at the end of the previous period e) gross requirements less scheduled orders Ans: d Section Ref: MRP Inputs

Level: moderate

43. Which of the following is not true for planned orders? a) They are necessary only for finished products. b) They result when there is not enough inventory to cover the gross requirements. c) The quantity is calculated using the lot-sizing rule. d) The lead time is required to determine when the order should be placed. e) The inventory records file is updated for the order. Ans: a Section Ref: MRP Inputs Level: moderate

44. The MRP file that contains data on specific materials used to make final products and their correct quantities is the ___________________________________________. a) authorized master production schedule b) bill of materials file c) inventory records file d) part status file e) routing file Ans: b Section Ref: MRP Inputs Level: moderate 45. When there is insufficient inventory to cover the gross requirements for a period a) an MRP is placed b) an ERP is placed c) a planned order is placed d) a scheduled order is placed e) a rush order occurs Ans: c Section Ref; MRP Inputs Level: moderate

46. The MRP input listing the intermediate assemblies, subassemblies, component parts, raw materials, and the quantities of each needed to produce one final product is the _____________________________________. a) authorized master production schedule b) bill of materials file c) inventory records file d) part status file e) assembly time chart Ans: b

Section Ref: MRP Inputs Level: moderate

47. Which of the following is not true concerning indented bills of materials? a) Subsequent levels are indented further to the right. b) Children are indented toward the right. c) The highest level parents are closest to the left margin. d) Quantity required is shown for each part number. e) Lead times determine how far children are indented. Ans: e Section Ref: MRP Inputs Level: hard

48. A visual depiction of the subassemblies and components that are needed to produce a finished product is called a(n) ____________________________________. a) assembly time chart b) product structure tree c) peg d) product chart e) blueprint Ans: b Section Ref: MRP Inputs Level: moderate

49. An item that has no parents is a(n) _________________________________________________. a) subassembly b) end item c) child item d) intermediate assemble e) component Ans: b Section Ref: MRP Inputs Level: hard

50. The cumulative lead time is __________________________________________________________. a) the sum of the lead times for all the components b) the sum of the lead time and the safety time c) the number of time buckets used in the MRP

d) the longest route in terms of time from the low level items to the end item in the product structure tree e) lead time less the safety time Ans: d Section Ref: MRP Inputs Level: hard

51. The lead time can be less than the cumulative lead time when ____________________________________. a) the company has inventory on hand b) the order has already been shipped c) the supply chain is well tuned d) there is no safety time e) the order is expedited Ans: a Section Ref: MRP Inputs Level: moderate

52. The gross requirements of a given component part are determined from __________________________. a) scheduled receipts plus projected available b) gross requirements of the parent c) planned orders of the parent d) projected available of the end item e) planned orders of the end item Ans: c Section Ref: The MRP Explosion Process Level: moderate

53. Which of the following is not true for action notices that are produced by MRP systems? a) An action notice is produced when a planned order needs to be released. b) An action notice is produced when due dates of orders need to be adjusted. c) An action notice is produced when the lead time is not sufficient for a planned order. d) An action notice is produced when inventory is moved to the manufacturing floor. e) They indicate actions that need to be taken by inventory planners. Ans: d Section Ref: The MRP Explosion Process Level: moderate

54. The current time period is referred to as ______________________________.

a) time zero b) the point of departure c) the start time d) the action bucket e) this year Ans: d Section Ref: The MRP Explosion Process Level: moderate

55. A positive quantity in the current period’s planned order row means that _________________________. a) lead time is too long b) the projected available is negative c) gross requirements are too large d) the planned order is due to be completed in the current period e) an order must be released Ans: e Section Ref: The MRP Explosion Process Level: moderate

56. Production and inventory planners release orders to ______________________________________. a) the expediter b) either an external supplier or to the shop floor c) the logistics manager d) either the shop floor or to the warehouse e) marketing Ans: b Section Ref: The MRP Explosion Process Level: moderate

57. An order released to a supplier authorizes _________________________________________________. a) the shipment of the material so that it arrives as needed b) movement of the material from the warehouse to the supplier c) the sending of information concerning production to the supplier d) accounting to set up an accounts receivable entry e) the logistics manager to start investigating shipment options Ans: a Section Ref: The MRP Explosion Process Level: moderate

58. An action notice is generated __________________________________________________________. a) for planned orders in any period b) only for orders that are to be released to the shop floor c) only for movements to and from the warehouse d) only when marketing needs to be notified e) when a planned order needs to be released Ans: e Section Ref: The MRP Explosion Process Level: hard

59. If an order is not scheduled to arrive in time, the planner tries to _______________________________. a) find a replacement order b) cancel the order c) split the order in two d) expedite the order e) talk marketing into changing the due date Ans: d Section Ref: The MRP Explosion Process Level: moderate

60. Which of the following is not a lot size rule? a) lot for lot b) fixed order quantity c) overall factors d) least total costs e) parts period balancing Ans: c Section Ref: The MRP Explosion Process Level: moderate

61. Different lot size rules determine the quantity of the order and ___________________________. a) the quality b) change the frequency of replenishment orders c) how projected available is calculated d) the lead time e) the backorder cost Ans: b

Section Ref: The MRP Explosion Process Level: moderate

62. If setup costs are essentially zero (negligible when compared to carrying costs), which approach should be used for lot sizing? a) lot for lot b) fixed order quantity c) period order quantity with POQ = 6 periods d) period order quantity with POQ = 2 periods e) period order quantity with POQ = 4 periods Ans: a Section Ref: Action Notices Level: hard

63. Selection of the lot size rule to be used should be based on minimizing __________________________. a) the order size b) late shipments c) total processing time d) quality problems e) the sum of ordering and carrying costs Ans: e Section Ref: Action Notices Level: easy

64. Capacity requirements planning uses data from __________________________________________. a) MRP b) rough-cut capacity planning c) aggregate planning d) MPS e) the bill of labor file Ans: a Section Ref: Action Notices Level: moderate

65. For capacity requirements planning, loads for critical work centers are calculated based on ___________. a) open external supplier orders and planned external supplier orde...