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Operations Management: Processes and Supply Chains, 10e (Krajewski et al.)
Chapter 16 Resource Planning

1) An ERP system revolves around a single comprehensive database that is made available across the entire organization.
Answer: TRUE
Reference: Enterprise Resource Planning
Difficulty: Easy
Keywords: enterprise resource planning, ERP
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

2) Companies that fully customize their ERP implementation reap the greatest rewards from such systems since they can continue to use the same processes to which all employees are accustomed.
Answer: FALSE
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: enterprise resource planning, ERP implementation
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

3) A firm's existing, older information system is called a "legacy system."
Answer: TRUE
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: enterprise resource planning, legacy system

4) Material requirements planning (MRP) is a computerized information system developed specifically to aid in managing dependent demand inventory and scheduling replenishment orders.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: material requirements planning, MRP

5) A materials requirements planning (MRP) explosion occurs when the system is bombarded with too many orders to schedule at one time.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: material requirements planning, MRP explosion

6) A parent is any item manufactured from one or more components.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: parent, component

7) Dependent demand for an item occurs because the quantity required for it varies with the production plans of one or more parents.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: dependent demand, parent

8) A component is an item that may go through one or more operations to be transformed into or become part of one or more parents.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: component, parent, transform

9) If the demand for an independent demand item is continuous and uniform, so will the planned order releases of its components.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: dependent demand, continuous

10) A bill of materials is a record of all the components of an item, the parent-component relationships, and the usage quantities derived from engineering and process designs.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate

11) An end item in a BOM is typically both a component and a parent.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, bill of material, en item

12) Part commonality refers to the degree to which a component has more than one immediate parent.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: part commonality, component, parent

13) Part commonality tends to increase inventory costs.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: part commonality, inventory

14) Gross requirements are the total demand derived from all parent production plans.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: gross requirements, demand, parent

15) A bill of materials (BOM) shows all of the components of an item, the parent—component relationships, usage quantities, and lot size derived from engineering and process designs.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, bill of materials, parent, component

16) An intermediate item must have at least one parent and at least one component.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: intermediate item, parent, component

17) The master production schedule (MPS) is the part of the material requirements planning that specifies when components must be ordered or assembled.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: master production schedule, MPS, material requirements plan

18) Available-to-promise inventory is the amount of end items that marketing can promise to customers by a certain date.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: ATP, available to promise inventory, MPS, master production schedule

19) The portion of the master production schedule farthest into the future is often frozen to reduce forecasting requirements.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS, master production schedule, freezing

20) The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned receipts.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS, master production schedule, freezing

21) The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the MPS quantities.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS, master production schedule, projected on-hand inventory

22) Gross requirements are the total demand derived from all parent production plans.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: gross requirements

23) Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand inventory is greater than zero in the first period), and subsequently in periods when the MPS quantity is greater than 0.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: Available-to-promise quantities, ATP, MPS quantity

24) Planned receipts are estimates of the amount of inventory available each week after gross requirements have been satisfied.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned receipts, projected on-hand inventory

25) A planned order release indicates when an order for a specified quantity of an item should be issued.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release

26) For items manufactured in-house, one component of the planned lead time is waiting time.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned lead time, waiting time

27) The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule, but less inventory on hand than the fixed order quantity rule.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: periodic order quantity rule, fixed order quantity rule, lot for lot rule, POQ, FOQ, L4L

28) Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: lot-for-lot rule, L4L, order quantity

29) MRP II ties MRP to the company's financial system.
Answer: TRUE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, MRP II, material requirements planning

30) The process with the least capacity is called a capacity constrained resource if its output is less than market demand.
Answer: FALSE
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: DBR, drum, buffer, rope, CCR, capacity constrained resource

31) The bill of resources (BOR) is a record of parent-component relationships and all the required materials, equipment time, staff, and other resources needed, including the usage quantities.
Answer: TRUE
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: BOR, bill of resources

32) A companywide process that cuts across traditional functional areas, business units, geographic regions, and product lines is a(n):
A) enterprise process.
B) master production scheduling process.
C) kinetic process.
D) full-business process.
Answer: A
Reference: Enterprise Resource Planning
Difficulty: Easy
Keywords: enterprise process
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

33) Entering new information in the database of an ERP system is a(n):
A) data packet.
B) transaction.
C) record.
D) file.
Answer: B
Reference: Enterprise Resource Planning
Difficulty: Easy
Keywords: enterprise resource planning, transaction, ERP
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

34) A front-office module for an ERP system includes:
A) manufacturing.
B) accounting and finance.
C) sales and marketing.
D) human resources.
Answer: C
Reference: Enterprise Resource Planning
Difficulty: Easy
Keywords: enterprise resource planning, ERP, front office
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

35) Which of the following is a back-office module in a typical ERP system?
A) customer service
B) sales
C) marketing
D) human resources
Answer: D
Reference: Enterprise Resource Planning
Difficulty: Easy
Keywords: enterprise resource planning, ERP, back office
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

36) Which of the following statements about ERP systems is best?
A) Recent studies have shown that the most successful ERP implementations use standardized systems.
B) ERP systems written in XML require complete replacements of a company's legacy systems.
C) A company must adapt their ERP system to their existing processes in order for all employees to gain a benefit from the new system.
D) An ERP system requires a regular synchronization of all of the module databases, which is usually accomplished automatically when the business is not conducting business.
Answer: A
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: enterprise resource planning, ERP
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

37) Which of the following is NOT an example of dependent demand items?
A) shoelaces, shoes
B) wheels, car
C) carafes, coffeemakers
D) ice skates, roller skates
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: dependent demand

38) Any item manufactured from one or more components is a(n):
A) parent.
B) component.
C) intermediate item.
D) purchased item.
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: parent, component

39) Which best defines the gross requirements for a component item?
A) the forecasted customer demand for the component
B) the amount of safety stock needed to buffer against uncertainties
C) the sum of gross requirements for all parents of the component
D) the total demand for the component derived from all immediate parents
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: component, parent

40) MRP can be used to best advantage under which one of the following circumstances?
A) when the item's demand depends only on customer demand
B) when the item's demand is uniform
C) when the item's demand is constant
D) when the item's demand depends on the production plans of its parent(s).
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Learning Outcome: Apply the process of materials requirements planning (MRP)

41) Which of the following statements about MRP is TRUE?
A) To be classified as a successful MRP user, a company must use either the L4L or POQ rules for lot sizing.
B) MRP gross requirements for a parent item are equal to the planned order releases of its components.
C) MRP logic is based on the logic of uniform, continuous demand, and item independence.
D) MRP gross requirements for a component depend on the planned order releases of its immediate parents.
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, component
Learning Outcome: Apply the process of materials requirements planning (MRP)

42) Which one of the following is an input to the MRP system?
A) shop-floor schedules
B) financial reports
C) master production schedule
D) purchasing orders
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, input
Learning Outcome: Apply the process of materials requirements planning (MRP)

43) If a planned receipt for an item is due in week 6 and the item's lead time is two weeks, in which week will the corresponding planned order release occur?
A) week 2
B) week 4
C) week 6
D) week 8
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order receipt, planned order release

44) Which one of the following statements about lot-sizing rules is TRUE?
A) The periodic order quantity (POQ) rule seeks to create inventory remnants.
B) If the POQ rule is used, an item's lot size can vary each time an order is placed.
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.
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: lot, sizing, POQ, periodic order quantity

45) Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average inventory?
A) periodic order quantity (POQ), with P = 2
B) fixed order quantity (FOQ)
C) economic order quantity (EOQ)
D) lot for lot (L4L)
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, L4L
Learning Outcome: Apply the process of materials requirements planning (MRP)

46) Which statement on MRP explosion is best?
A) It calculates the total number of subassemblies, components, and raw materials needed for each parent item.
B) It calculates the total number of raw materials to be purchased from all suppliers.
C) It calculates the total number of parts to be produced for each parent item.
D) It calculates the total number of parts needed to be produced less the number of parts on hand for each parent item.
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, explosion
Learning Outcome: Apply the process of materials requirements planning (MRP)

47) Which of the following statements concerning MRP is TRUE?
A) Dependent-demand items tend to experience relatively constant demand rates.
B) MRP systems use independent demands for each component item.
C) Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order releases to estimate capacity requirements for critical workstations.
D) The most accurate way to forecast dependent demand is to examine past usage rates.
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, CRP, capacity requirements planning
Learning Outcome: Apply the process of materials requirements planning (MRP)

48) Which one of the following is a feature of MRP II, but not available in basic MRP systems?
A) financial projections
B) action notices
C) dispatch lists
D) capacity reporting
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, MRP II

49) Which of the following statements about MRP II is best?
A) It is computationally faster than regular MRP.
B) It is limited only to aiding order-launching decisions.
C) It incorporates informal systems through the use of expert systems technology.
D) It provides more extensive information than MRP because it is tied to the company's financial system.
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP II, manufacturing resource planning

Table 16.1
[pic]

50) Use the information in partially completed Table 16.1. What is the projected on-hand inventory in week 6?
A) 0 units
B) 15 units
C) 33 units
D) 53 units
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start, projected on-hand inventory
AACSB: Analytic skills

51) Use the information in partially completed Table 16.1. In which week does the second nonzero MPS quantity occur?
A) week 1
B) week 2 or 3
C) week 4 or 5
D) week 6, 7, or 8
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start, MPS quantity
AACSB: Analytic skills

52) Use the information in partially completed Table 16.1. What is the MPS start quantity in week 4?
A) 0 units
B) 20 units
C) 30 units
D) 60 units
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start quantity
AACSB: Analytic skills

53) Use the information in partially completed Table 16.1. What is the available-to-promise (ATP) inventory in week 1?
A) 0 units
B) 10 units
C) 15 units
D) 55 units
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start quantity, available-to-promise inventory
AACSB: Analytic skills

54) Use the information in partially completed Table 16.1. What is the available-to-promise (ATP) inventory in week 7?
A) 0 units
B) 33 units
C) 40 units
D) 60 units
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start quantity, available-to-promise inventory, ATP
AACSB: Analytic skills

Table 16.2
[pic]

55) Use the information in partially completed Table 16.2. What is the projected on-hand inventory in week 5?
A) 0 units
B) 35 units
C) 40 units
D) 75 units
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: projected on-hand inventory, MPS
AACSB: Analytic skills

56) Use the information in partially completed Table 16.2. In which week does the second nonzero MPS quantity occur?
A) week 1 or 2
B) week 3 or 4
C) week 5 or 6
D) week 7 or 8
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS quantity. MPS
AACSB: Analytic skills

57) Use the information in partially completed Table 16.2. What is the MPS start quantity in week 1?
A) 0 units
B) 20 units
C) 40 units
D) 80 units
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS start quantity
AACSB: Analytic skills

58) Use the information in partially completed Table 16.2. What is the available-to-promise (ATP) inventory in week 1?
A) 0 units
B) 40 units
C) 45 units
D) 50 units
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: available-to-promise (ATP) inventory, MPS
AACSB: Analytic skills

59) Use the information in partially completed Table 16.2. What is the available-to-promise (ATP) inventory in week 6?
A) 0 units
B) 35 units
C) 45 units
D) 80 units
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: available-to-promise (ATP) inventory, MPS
AACSB: Analytic skills

60) Use the following partially completed MRP record to answer the question.

[pic]

What are the quantities of planned order releases for item ABC for the first five weeks (weeks 1, 2, 3, 4, and 5)?
A) 30, 0, 60, 0, 145
B) 60, 0, 145, 0, 0
C) 0, 30, 60, 0, 0
D) 30, 0, 60, 145, 0
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

61) Use the following partially completed MRP record to answer the question.

[pic]

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) 20, 30, 0, 40, 20, 0
B) 35, 0, 60, 0, 0, 0
C) 5, 30, 0, 40, 20, 0
D) 35, 0, 0, 40, 20, 0
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

62) Use the following partially completed MRP record to answer the question.

[pic]

What is the planned order release quantity in week 4?
A) 0 units
B) greater than 0 units but fewer than or equal to 50 units
C) greater than 50 units but fewer than or equal to 100 units
D) greater than 100 units
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Table 16.3
[pic]

63) Use the information in partially completed Table 16.3. 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
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

64) Use the information in Table 16.3. What is the planned order release in week 1?
A) 40 units
B) 180 units
C) 220 units
D) 240 units
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

65) Use the following MRP record to answer the question.

[pic]

What will be the projected on-hand inventory quantity in week 7?
A) fewer than or equal to 30 units
B) greater than 30 units but fewer than or equal to 60 units
C) greater than 60 units but fewer than or equal to 90 units
D) greater than 90 units
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: projected on-hand inventory
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

66) Use the following MRP record to answer the question.

[pic]

What are the quantity and the week of the first planned order release?
A) 150 units; week 1
B) 150 units; week 2
C) 240 units; week 1
D) 240 units: week 2
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

67) Use the following MRP record to answer the question.

[pic]

Which one of the following statements about item QRS is TRUE?
A) The first planned order release occurs in week 1.
B) The first planned receipt occurs in week 1.
C) The second planned order release quantity is 90 units.
D) The total planned order release quantity (summing up all eight weeks) is 190 units.
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Table 16.4
Consider the following MPS, BOM, and inventory data. Blank MRP records are provided at the end of this exam.
Master Production Schedule: The following table shows the MPS start quantities.

[pic]

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
[pic]

68) Use the information in Table 16.4. Which one of the following statements about item C is BEST?
A) The 100-unit scheduled receipt of 200 units in week 1 can be delayed until week 2 without delaying item D's first planned order release.
B) Its second planned order release is for 200 units in week 6.
C) It has a planned receipt of 180 units in week 5.
D) An order for 60 units should be placed now (in week 1).
Answer: A
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

69) Use the information in Table 16.4. Which one of the following statements on item C is TRUE?
A) It has a scheduled receipt of 50 units in week 1.
B) Its gross requirement in week 6 is 100 units.
C) Its projected on-hand inventory is 0 units for week 1 through week 6.
D) Its first planned order release is for 100 units in week 4.
Answer: C
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: scheduled receipt, gross requirement, projected on-hand inventory
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

70) Use the information in Table 16.4. Which one of the following statements about item F is BEST?
A) The gross requirement in week 4 is 400 units.
B) Its first planned receipt is for 120 units in week 4.
C) Its 100-unit scheduled receipt in week 1 could be delayed to week 2 without delaying the planned order release for product B.
D) Its first planned order receipt is for 385 units in week 4.
Answer: C
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: gross requirement, planned receipt, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

71) Use the information in Table 16.4. Which one of the following statements about item E is TRUE?
A) There are no planned order releases in weeks 1 though week 6.
B) There is a planned receipt of 250 units in week 2.
C) There is one planned receipt for the next 6 weeks.
D) There is a planned order release of 250 units in week 3.
Answer: A
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: planned order release, action notice
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Table 16.5
[pic]

72) Use the information in Table 16.5. Which one of the statements concerning item RST is TRUE?
A) The first planned receipt occurs in week 5.
B) The planned order release in week 2 is for 100 units.
C) The planned receipt in week 7 is 80 units.
D) There are exactly two planned order releases needed for the first 8 weeks.
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned receipt, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

73) Use the information in Table 16.5. Which of the statements concerning item RST is TRUE? (Examine each answer independently.)
A) If the safety stock level were 30 units instead of 0 units, the planned receipt in week 7 would be 110 units.
B) If the scheduled receipt in week 2 must be delayed until week 3 because of a capacity shortage, there would be a planned order release in week 1.
C) If the safety stock level were 25 units instead of 0 units, there would be a planned order release in week 2.
D) 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.
Answer: C
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: safety stock, planned order release, scheduled receipt, gross requirement, projected on-hand inventory
AACSB: Analytic skills

74) Use the following MRP record to answer the question.

[pic]

Which one of the statements concerning item LMN is TRUE?
A) The scheduled receipt of 80 units in week 3 should be expedited so that it is finished in week 2.
B) The planned order release quantity in week 3 is 80 units.
C) The planned receipt quantity in week 6 is 30 units.
D) The projected on-hand inventory in week 8 is 70 units.
Answer: A
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: scheduled receipt, planned order release, projected on-hand inventory
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Table 16.6
[pic]

75) Use the information from Table 16.6. If an FOQ of 80 units is used, how many planned order releases are there for item XYZ?
A) zero or one
B) two
C) three
D) more than three
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: fixed order quantity, FOQ, planned order release
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

76) Use the information from Table 16.6. If an FOQ of 100 units is used, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)
A) zero or one
B) two
C) three
D) more than three
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: fixed order quantity, FOQ, planned order release, scheduled receipt
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

77) Use the information from Table 16.6. If an L4L lot-sizing rule is used, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)
A) zero or one
B) two
C) three
D) more than three
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: L4L lot-sizing rule, L4L, planned order release, scheduled receipt
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

78) Use the information from Table 16.6. If a POQ lot-sizing rule is used, where P = 3, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)
A) zero or one
B) two
C) three
D) more than three
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: periodic order quantity, POQ, planned order release, scheduled receipt
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

79) Use the information from Table 16.6. Which lot-sizing rule results in the highest projected on-hand inventory averaged over weeks 1 through week 10?
A) FOQ = 100
B) FOQ = 75
C) L4L
D) POQ, P = 3
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: POQ, FOQ, L4L, lot sizing
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

80) 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) zero or one weeks
B) two or three weeks
C) four or five weeks
D) more than five weeks
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: lot sizing, POQ
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

81) Management wishes to use an FOQ lot-sizing rule for an item based on the economic order quantity. If the annual demand is 1,200 units, the holding cost is $10 per unit per year, and the setup cost is $50 per lot, which one of the following fixed-order quantities is most appropriate?
A) 90 units
B) 110 units
C) 130 units
D) 150 units
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: lot sizing, FOQ
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Case Study 16.1
Sunshine Manufacturing produces three products: X, Y, 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. 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.

82) Use the information in Case Study 16.1. Which of the following sequences is an acceptable way to process the inventory records for components A, B, C, and D?
A) A B C D
B) D A B C
C) B A D C
D) C B D A
Answer: D
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: order processing
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

83) Use the information in Case Study 16.1. 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 4 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 2 is 65 units.
Answer: D
Reference: Material Requirements Planning
Difficulty: Hard
Keywords: gross requirements
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Table 16.7
Viola Products produces one item with the following bill of materials

[pic]

A recent check of their inventory reveals the following quantities on hand.

|Item |Quantity |Item |Quantity |Item |Quantity |
|A |7 |D |3 |G |22 |
|B |6 |E |4 |H |15 |
|C |3 |F |5 |J |11 |

Currently no scheduled receipts exist for any of the dependent demand items.

84) Use Table 16.7 to answer this question. How many additional units of D are needed to produce 20 end items?
A) fewer than 75
B) more than 75 but fewer than 95
C) more than 95 but fewer than 115
D) more than 115
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

85) Use Table 16.7 to answer this question. How many additional units of J are needed to produce 20 end items?
A) fewer than 175
B) more than 175 but fewer than 205
C) more than 205 but fewer than 245
D) more than 245
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

86) Use Table 16.7 to answer this question. How many additional units of H are needed to produce 20 end items?
A) fewer than 250
B) more than 250 but fewer than 350
C) more than 350 but fewer than 450
D) more than 450
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

87) Use Table 16.7 to answer this question. How many additional units of G are needed to produce 20 end items?
A) fewer than 50
B) more than 50 but fewer than 60
C) more than 60 but fewer than 70
D) more than 70
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

88) Use Table 16.7 to answer this question. How many additional units of G are needed to produce seven end items?
A) 0
B) 11
C) 22
D) 33
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

89) Use Table 16.7 to answer this question. How many additional units of H are needed to produce seven end items?
A) 130
B) 145
C) 160
D) 175
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

90) Use Table 16.7 to answer this question. How many additional units of J are needed to produce seven end items?
A) 25
B) 36
C) 47
D) 58
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

91) Use Table 16.7 to answer this question. How many additional units of D are needed to produce seven end items?
A) 33
B) 30
C) 27
D) 24
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Figure 16.8

[pic]

|Item |Amount |Item |Amount |Item |Amount |
|O |7 |F |11 |D |2 |
|P |12 |U |7 |E |8 |
|C |3 |N |12 | | |

Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.

92) Use Figure 16.8 to answer this question. How many additional units of E are needed to produce ten end items?
A) 284
B) 142
C) 71
D) 35
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

93) Use Figure 16.8 to answer this question. How many additional units of D are needed to produce seven end items?
A) 40
B) 46
C) 68
D) 54
Answer: D
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

94) Use Figure 16.8 to answer this question. How many additional units of P are needed to produce ten end items?
A) 46
B) 38
C) 27
D) 13
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

95) Use Figure 16.8 to answer this question. How many additional units of F are needed to produce twelve end items?
A) 236
B) 214
C) 182
D) 176
Answer: B
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

96) Use Figure 16.8 to answer this question. How many additional units of N are needed to produce eighteen end items?
A) 82
B) 96
C) 70
D) 74
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: bill of materials, BOM
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

97) Which of the following is NOT used to derive an item's gross requirements?
A) the MPS for immediate parents that are end items
B) the planned order releases for immediate parents below the MPS level
C) the MPS components that are not purchased items
D) any other requirements not originating in the MPS, such as the demand for replacement parts
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: gross requirements, MRP explosion
Learning Outcome: Apply the process of materials requirements planning (MRP)

98) A computer-generated memo used by inventory planners to make decisions about releasing new orders and adjusting due dates of scheduled receipts is a(n):
A) enterprise report.
B) infinite capacity.
C) action notice.
D) input—output report.
Answer: C
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: planned order release, scheduled receipt, action notice

99) A technique used for projecting time-phased capacity requirements for workstations is called:
A) capacity requirements planning.
B) time-adjusted output control.
C) input—output control.
D) work center planning.
Answer: A
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: capacity requirements planning

100) Which of the following uses of MRP in promoting a healthy environment is NOT used?
A) An MRP system can track waste in a bill of materials as a component of an item.
B) When the master production schedule is developed for a product, reports can be generated that project the quantity of waste.
C) When the master production schedule is developed for a product, reports can be generated that project the timing of waste.
D) The MRP system can be used to communicate directly with the International Organization for Standardization to file ISO 9000 documentation.
Answer: D
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: MRP, environment
Learning Outcome: Apply the process of materials requirements planning (MRP)

101) Which of the following statements about service resource planning is TRUE?
A) The service analogy to the BOM in a manufacturing company is a bill of lading (BOL).
B) One resource that every service provider manages is cash.
C) There is no such thing as dependent demand in the service sector.
D) As services are completed, the accounts receivable decrease.
Answer: B
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: service, resource planning

102) An example of a dependent demand item for services is a(n):
A) menu in a restaurant.
B) jukebox in a club.
C) operating suite at a hospital.
D) a pilot's checklist for an airline.
Answer: C
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: dependent demand, service

103) Facilitating goods in a hotel's bill of resources would include a:
A) housekeeper.
B) fax machine.
C) towel.
D) front-desk clerk.
Answer: C
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: facilitating goods, BOR, bill of resources

104) The service analogy to the bill of materials in a manufacturing company is the bill of:
A) resources.
B) services.
C) sub-services.
D) tender.
Answer: A
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: BOR, bill of resources

105) A companywide process that cuts across functional areas, business units, geographic regions, and product lines is a(n) ________.
Answer: enterprise process
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: enterprise process, ERP
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

106) ERP revolves around a(n) ________.
Answer: single database
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: enterprise resource planning, ERP, database
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

107) In MRP, a(n) ________ is any item manufactured from one or more components.
Answer: parent
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: parent, component

108) 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.
Answer: component
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: component, parent

109) ________ is a computerized information system developed specifically to aid in managing dependent-demand inventory and scheduling replenishment orders.
Answer: MRP, material requirements planning
Reference: Material Requirements Planning
Difficulty: Easy
Keywords: MRP, material requirements plan, dependent demand

110) 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.
Answer: explosion
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: explosion, MRP, material requirements plan
Learning Outcome: Apply the process of materials requirements planning (MRP)

111) The ________ is a record of all components of an item, the parent-component relationships, and usage quantities derived from engineering and process design.
Answer: bill of materials, BOM
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, bill of materials

112) A(n ) ________ item has one or more parents but no components.
Answer: purchased
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: purchased item, parent, component

113) The L4L rule is a special case of the ________ .
Answer: POQ rule
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: POQ

114) Among the four core processes of an organization that link activities within and across firms in a supply chain, the ________ interacts with all of them either through its inputs or outputs.
Answer: MRP system
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP system, material requirements planning

115) A(n) ________ is an intermediate item that is assembled from one or more components.
Answer: subassembly
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: subassembly, intermediate item, component

116) ________ is the degree to which a component has more than one immediate parent.
Answer: Part commonality
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: part commonality, component, parent

117) The sums of the quantities in the master production schedule must equal those in the ________.
Answer: sales and operations plan
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: master production schedule, MPS, material requirements planning, MRP

118) A(n) ________ is a record that divides the future into time periods called time buckets.
Answer: inventory record
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: inventory record, time bucket

119) One thing that an MRP II system has that an MRP system does not is ________.
Answer: a linkage to the financial system
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP II

120) ________ are the total demand derived from all parent production plans.
Answer: Gross requirements
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: gross requirements, parent

121) ________ are orders that have been placed but not yet completed.
Answer: Scheduled receipts
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: scheduled receipts, order

122) Operations produces a number of items in one production period. Those items that are not produced for a specific customer order are ________.
Answer: available to promise
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: available to promise, ATP

123) ________ is an estimate of the amount of inventory available each week after gross requirements have been satisfied.
Answer: Projected on-hand inventory
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: projected on-hand inventory

124) Waiting time and process time are two components of ________.
Answer: lead time
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: waiting time, processing time, lead time

125) ________ is a lot-sizing rule under which the lot size ordered covers the gross requirements of a single week.
Answer: Lot-for-lot, L4L
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: L4L, lot-for-lot sizing rule

126) A(n) ________ is inventory carried into a week but too small to prevent a shortage.
Answer: remnant
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: remnant, inventory

127) The lot-for-lot (L4L) rule minimizes inventory investment but it also maximizes the number of ________.
Answer: orders, orders placed
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: lot-for-lot rule, L4L

128) ________ is a technique used for projecting time-phased capacity requirements for workstations.
Answer: Capacity requirements planning, CRP
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: CRP, capacity requirements planning

129) ________ ties the basic MRP system to the company's financial system.
Answer: Manufacturing resource planning, MRP II
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements plan, MRP II, manufacturing resource planning

130) A(n) ________ is a record of a service firm's parent-component relationships all of the materials, equipment, time, staff, and other productive assets associated with them, including usage quantities.
Answer: bill of resources
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: resource planning, service, bill of resources

131) What are the differences and similarities among material requirements planning, manufacturing resource planning, and enterprise resource planning systems?
Answer: The materials requirement planning (MRP) system can be considered a subset of the manufacturing resource planning (MRP II) system, containing all of the production-related capabilities without the tie-in to the company's financial and other core and supporting process systems. The MRP II system could be considered a subset of an enterprise resource planning (ERP) system, containing everything an ERP system has without the single source of data, streamlined data flows, and availability of a wealth of real-time information for all employees.
Reference: Multiple Sections
Difficulty: Moderate
Keywords: MRP, material requirements planning
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

132) What is the basic idea behind an enterprise resource planning system?
Answer: An enterprise resource planning system is a large, integrated information system that supports many, if not all, of a firm's processes and data storage needs. The organization can view its operations as a whole rather than guessing how activity in one area affects another. The common database eliminates multiple data entry and the mistakes that are inherent in multiple entry systems.
Reference: Enterprise Resource Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning
Learning Outcome: Describe the process and applications of enterprise resource planning (ERP)

133) What are the key inputs to an MRP system?
Answer: The key inputs are the bill of materials, master production schedule, and inventory records.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements plan, input

134) What is the explosion of the MPS and what are the outputs?
Answer: MRP translates, or explodes, the MPS and other sources of demand into the requirements needed for all of the subassemblies, components, and raw materials the firm needs to produce parent items. This process generates the material requirements plan for each component item. An item's gross requirements are derived from three sources: 1. The MPS for immediate parents that are end items; 2. The planned order releases (not the gross requirements, scheduled receipts, or planned receipts) for immediate parents below the MPS level; 3. Any other requirements not originating in the MPS, such as the demand for replacement parts.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements plan, input, MPS, explode

135) Explain the difference between independent and dependent demand and illustrate your explanation with an example.
Answer: Examples will vary. The key difference between the two is whether the demand for items A is driven directly by the demand for item B. End items are typically independent demand since their demand is subject only to customers' appetite for them. The components used to make up the end item have their demand determined by the number of end items that are required during any production period.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements plan, input

136) What information can be gleaned from a bill of materials? If you were asked to produce an item based solely on a copy of its BOM, what missing information would you need?
Answer: A bill of materials is a record of all the components of an item, the parent component relationships, and the usage quantities derived from engineering and process designs. You would have a parts list, but would have no idea how long it might take to assemble an item, or receive the components from a supplier (lead times). You would also need to know what the levels of inventory were for each item listed in the BOM. Since the question is phrased as "produce an item" you might assume that only one end item was required, but if the interpretation is otherwise, you would need to know a production quantity.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements plan, input

137) Explain the key differences between the FOQ, POQ, and L4L lot-sizing rules.
Answer: A fixed-order-quantity (FOQ) rule maintains the same order quantity each time an order is issued but varies the time interval between orders. A periodic-order-quantity (POQ) rule allows a different order quantity to be specified but each order covers the requirements for a fixed number of time periods. A lot-for-lot (L4L) rule covers the gross requirements of a single week's production. POQ and L4L rules strive to avoid remnants and thus have smaller average inventory than FOQ. Because their average inventory is lower, they are less able to respond to last-minute changes in customer requests.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: FOQ, POQ, L4L lot-sizing rules
Learning Outcome: Apply the process of materials requirements planning (MRP)

138) Explain why, in a dependent demand environment, MRP does a better job of estimating the need to replenish inventory items than does the reorder point system.
Answer: MRP works better for dependent-demand environments because statistical forecasting for components with lumpy demand results in large forecast errors. It also provides managers with information useful for planning capacities and estimating financial requirements, and it automatically updates the demand and inventory-replenishment schedules of components when the production schedule of parent items changes.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, lumpy demand

139) How can an MRP system be used in a firm's sustainability efforts?
Answer: Companies can modify their MRP systems to help them track their wastes and plan for their disposal. The type and amount of waste associated with each item can be entered into its BOM by treating the waste much like you would a component of the item. When the MPS is developed for a product, reports can be generated that project the amount of waste expected during the production process and when it will occur. Although this approach can require that a firm's BOM be modified substantially, the benefits are also substantial. Firms can identify their waste problems in advance to eliminate them in some cases (through process improvement efforts) or plan for their proper disposal in others. It also gives the firm a way to generate any formal documentation required by the government to verify that it has complied with environmental laws and policies.
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, lumpy demand

140) Can MRP be adapted for use in services and, if so, how would it work?
Answer: Service providers must also plan the use of resources and facilitating goods. A bill of resources (BOR) is a record of all the required materials, equipment, time, staff, and other resources needed to provide a service, the parent—component relationships, and the usage quantities. Naturally, the services themselves cannot be inventoried but must instead be supplied on demand.
Reference: Resource Planning for Service Providers
Difficulty: Moderate
Keywords: BOR, bill of resources, facilitating goods
Learning Outcome: Apply the process of materials requirements planning (MRP)

141) Complete the following MPS Record

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS, master production schedule
AACSB: Analytic skills

142) Complete the following MPS Record.

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MPS, master production schedule
AACSB: Analytic skills

143) Complete the following MRP record using the POQ rule.

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP record. POQ, periodic order quantity
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

144) Complete the following MRP record using the L4L rule:

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP record, L4L, lot-for-lot rule
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

145) Complete the following MRP record using the FOQ rule:

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP record, FOQ, fixed order quantity
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

146) Complete the following MRP record using the FOQ rule:

[pic]
Answer:
[pic]
Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: MRP, material requirements planning, FOQ, fixed order quantity
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

147) Use the bill of materials and inventory records to determine the quantity of purchased items necessary to assemble 20 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.

|Component |On-hand |Component |On-hand |
|A |5 |D |15 |
|B |75 |E |3 |
|C |10 |F |20 |

[pic]

Answer:
20 End Items → 40 As less 5 on hand → 35 As
35 As → 70 Bs
35 As → 70 Ds less 15 Ds on hand → 55 Ds

20 End Items → 40 Cs less 10 on hand → 30 Cs
30 Cs → 30 Es less 3 on hand → 27 Es
30 Cs → 60 Fs less 20 on hand → 40 Fs
30 Cs → 90 Bs

90 Bs + 70 Bs →160 Bs less 75 on hand → 85 Bs

|Purchased Item |Qty to Order |
|B |85 |
|D |55 |
|E |27 |
|F |40 |

Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, inventory record, bill of materials
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

148) Use the bill of materials and inventory records to determine the additional quantities of purchased items necessary to assemble 15 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.

[pic]

|Item |Amount |Item |Amount |Item |Amount |
|O |7 |F |11 |D |2 |
|P |12 |U |7 |E |8 |
|C |3 |N |12 | | |

Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.
Answer:
|Purchased Item |Quantity to Order |
|D |150 |
|E |464 |
|F |274 |
|N |64 |
|P |57 |

Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, inventory record, bill of materials
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

149) Use the bill of materials and inventory records to determine the additional quantities of purchased items necessary to assemble 20 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.

[pic]

|Item |Amount |Item |Amount |Item |Amount |
|O |5 |F |17 |D |12 |
|P |14 |U |3 |E |6 |
|C |7 |N |10 | | |

Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.
Answer:
|Purchased Item |Quantity to Order |
|D |216 |
|E |618 |
|F |142 |
|N |104 |
|P |91 |

Reference: Material Requirements Planning
Difficulty: Moderate
Keywords: BOM, inventory record, bill of materials
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

150) Consider the MPS, BOM, and inventory data shown.

Master Production Schedule:
The following table shows the MPS start quantities for the next 10 weeks.

|Finished |1 |2 |3 |4 |
|Item A | | | | |
|B |L4L |1 |40 in period 1 | |
|C |POQ = 3 |2 | |40 |
|D |FOQ = 250 |1 | |100 |
|E |L4L |2 |160 in period 2 | |

Construct the MRP schedule using the preceding information. Blank MRP records are provided at the end of this test.
Answer:
[pic][pic][pic]

Reference: Output from Material Requirements Planning
Difficulty: Hard
Keywords: MRP, material requirements planning, lot-for-lot, L4L, fixed order quantity, FOQ, periodic order quantity, POQ
Learning Outcome: Apply the process of materials requirements planning (MRP)
AACSB: Analytic skills

Blank MRP Record

|Item | |Lot Size |
|Description | |Lead Time: |

|Date |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 | |Gross

requirements

|

|

|

|

|

|

| |

|

|

| |Scheduled

receipts

|

|

| | | | | | | | | |Projected on Hand

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| | | | | | | | | | | |Planned

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