Exam Prep Resource Planning Chapter 15

CHAPTER 15

RESOURCE PLANNING

CHAPTER LEARNING OBJECTIVES

1. Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material. Refer to Section 15.1.

2. Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system. Refer to Section 15.2.

3. Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues. Enterprise resource planning (ERP) is software that allows companies to organize and manage their business processes by sharing information across functional areas; transform transactional data into useful information to support business decisions in other parts of the company; and connect with supply chain and customer management applications to help businesses share information—inside and outside the company. Key modules of the ERP systems include:

• finance/accounting module

• sales/marketing module

• production/materials management module

• human resources module

ERP implementation can be capital intensive. Small-market and midsize-market companies with time and budget constraints have a hard time implementing ERP.

4. Explain how software related to ERP is used, including the complexities of integrating multiple business software systems. ERP and its related software include customer relationship management (CRM), product lifecycle management (PLM), and supply chain management (SCM). These types of software systems can work together. For example, customer and supplier collaboration on design with PLM can reduce time to market for new products and services.

TRUE-FALSE STATEMENTS

1. Material requirements planning (MRP) translates the master production schedule into requirements for components, subassemblies, and raw materials.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

2. One objective of material requirements planning (MRP) is to utilize all available capacity.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

3. A material requirements planning (MRP) system serves as both an inventory control system and as a production scheduling system.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

4. Material requirements planning (MRP) is useful for managing and scheduling discrete demand items.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

5. A forecast of dependent demand requirements is one of the major inputs into the MRP process.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

6. Very simple products typically do not require material requirements planning (MRP) to plan production or monitor inventory levels.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

7. The master production schedule (MPS) is a major output of the MRP process.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

8. The optimal time required to manufacture a product is called its cumulative lead time.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

9. Modular bills of material are used to group small, loose parts together into a kit.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

10. For information concerning on-hand quantities, lot sizes, and lead time, figures can be found in the master production schedule (MPS).

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

11. Lot sizing rules are used in MRP to determine work or purchase the order quantities.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

12. Planned order releases at one level of a product structure generate gross requirements at the next level.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

13. The periodic order quantity (POQ) lot-sizing technique places orders every demand period.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

14. Material requirements planning (MRP) is more useful for simple products and less useful for complex products.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

15. The total length of time to purchase an item from a supplier is called its cumulative lead time.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

16. The quantities reported on a master production schedule may reflect a combination of actual and forecasted demand.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

17. The quantities displayed on a master production schedule represent the production and not the actual demand.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

18. A phantom bill of material is appropriate when a product consists of assemblies that are later combined to form a variety of final products.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

19. Because the item master file is an input into the MRP process, it should be updated to reflect any revisions or changes.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

20. Firms that successfully implement an MRP system no longer require cycle counting of inventory.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

21. A matrix is used to organize and display the information generated by the MRP process.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

22. Capacity requirement planning (CRP) converts the material plan into labour and machine workloads.

Difficulty: Easy

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Knowledge

AACSB: Reflective Thinking

23. Capacity requirements planning (CRP) projects the load from a given material plan onto the capacity of a system.

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Knowledge

AACSB: Reflective Thinking

24. A load profile displays underloads and overloads.

Difficulty: Easy

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Knowledge

AACSB: Reflective Thinking

25. Effective capacity is determined by multiplying the rated capacity by utilization and efficiency.

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Comprehension

AACSB: Reflective Thinking

26. Load levelling is used to resolve the underloaded and overloaded capacity conditions.

Difficulty: Easy

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Knowledge

AACSB: Reflective Thinking

27. An enterprise resource planning (ERP) system shares information across the functional areas.

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

28. The application modules that comprise the ERP system are designed to support only customer relationship management processes.

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

29. ERP systems are only concerned with production and marketing processes.

Difficulty: Easy

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

30. Enterprise resource planning integrates business processes at the expense of customer interaction.

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

31. ERP application modules can be used alone or in combination.

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

32. Single-source ERP systems are often easier to integrate than systems built using the best-in-breed approach.

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

33. The last stage in ERP implementation involves analyzing business processes.

Difficulty: Easy

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

34. The customer relationship management (CRM) software plans and executes business processes that involve customer interactions.

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration

Blooms: Knowledge

AACSB: Reflective Thinking

35. Customer relationship management systems change the focus from managing products to managing customers.

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration

Blooms: Comprehension

AACSB: Reflective Thinking

MULTIPLE CHOICE QUESTIONS

36. Material requirements planning (MRP) is a useful for all of the following except

a) dependent demand items.

b) discrete demand items.

c) independent demand items.

d) erratic orders.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

37. All of the following options are inputs into the MRP process except the

a) master production schedule.

b) product structure file.

c) item master file.

d) planned order report.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

38. The product structure file lists all of the following except

a) the product’s demand.

b) the items that go into the product.

c) a brief description of each item.

d) when and in what quantity each item is needed in the assembly process.

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

39. A phantom bill of material is used

a) to group small, loose parts together.

b) when the product is manufactured in major subassemblies.

c) for subassemblies that are immediately consumed in the next stage of production.

d) when due dates have not been calculated.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

40. A ___ of material is used to plan the production of products with many optional features.

a) K-bill

b) modular bill

c) phantom bill

d) time-phased bill

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

41. The item master file contains all the following except

a) on-hand quantities.

b) lead times.

c) planned order releases.

d) on-order quantities.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

42. The MRP process of subtracting on-hand quantities and scheduled receipts from gross requirements to produce net requirements is referred to as

a) cycle counting.

b) lot sizing.

c) exploding.

d) netting.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

43. The MRP process of determining requirements for lower level items based on the master production schedule is referred to as

a) lot sizing.

b) netting.

c) backward scheduling.

d) exploding.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

44. ___ is a lot-sizing technique that orders for multiple demand periods and is referred to as

a) Lot-for-lot (L4L).

b) Periodic order quantity (POQ).

c) Economic order quantity(EOQ).

d) Multiple order quantity (MOQ).

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking

45. Given the following Product Structure Record:

The number of E’s required for each A would be

a) 1.

b) 2.

c) 3.

d) 4.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

46. Given the following Product Structure Record:

The number of D’s required for each A would be

a) 2.

b) 3.

c) 6.

d) 12.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

47. Given the following Product Structure Record:

The number of G’s required for each A would be

a) 40.

b) 20.

c) 18.

d) 3.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

48. Given the following MRP matrix for Item D:

The planned order release for period 3 would be

a) 100.

b) 160.

c) 270.

d) 300.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

49. Given the following MRP matrix for Item D:

The planned order release for period 5 would be

a) 100.

b) 120.

c) 160.

d) 270.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

50. Given the following MRP matrix for Item D:

The planned order receipt for period 6 would be

a) 100.

b) 120.

c) 160.

d) 270.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

51. Given the following MRP matrix for Item D:

The projected on hand quantity at the end of period 3 would be

a) 0.

b) 20.

c) 60.

d) 70.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

52. Given the following MRP matrix for Item C:

If each order cost $500 and the holding cost is $0.75 per item per period, the periodic order quantity would be

a) 3 periods of requirements.

b) 2 periods of requirements.

c) 1 period of requirements.

d) 0 period of requirements.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

53. Given the following MRP matrix for Item C:

If each order cost $500 and the holding cost is $0.75 per item per period, then using the Periodic Order Quantity lot sizing technique, the Planned Order Release for period 1 would be

a) 270.

b) 290.

c) 340.

d) 560.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

54. Given the following MRP matrix for Item C:

If each order cost $500 and the holding cost is $0.75 per item per period, then using the Periodic Order Quantity lot sizing technique, the Planned Order Release for period 4 would be

a) 270.

b) 340.

c) 410.

d) 560.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

55. Given the following MRP matrix for Item C:

If each order cost $500 and the holding cost is $0.75 per item per period, then using the Periodic Order Quantity lot sizing technique, the Projected on Hand at the end of period 7 would be

a) 330.

b) 270.

c) 0.

d) 140.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

56. Given the following Product Structure Record:

The number of F’s required for each A would be

a) 6.

b) 12.

c) 18.

d) 24.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

57. Given the following Product Structure Record:

The number of G’s required to assemble 10 A’s would be

a) 9.

b) 10.

c) 90.

d) 180.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

58. Given the following MRP matrix for Item E:

The planned order releases for period 1 would be

a) 300.

b) 200.

c) 75.

d) 0.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

59. Given the following MRP matrix for Item E:

The projected on hand quantity at the end of period 3 would be

a) 0.

b) 100.

c) 300.

d) 500.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

60. Given the following MRP matrix for Item E:

The planned order releases for period 3 would be

a) 300.

b) 200.

c) 75.

d) 0.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

61. Given the following MRP matrix for Item E:

The planned order releases for period 4 would be

a) 300.

b) 200.

c) 75.

d) 0.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

62. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If L4L ordering is used the planned order releases would be

a) 40 in period 1 and 0 in period 3.

b) 80 in period 2 and 60 in period 3.

c) 60 in period 2 and 80 in period 3.

d) 0 in period 1 and 40 in period 3.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

63. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If EOQ lot sizing is used the minimum order quantity would be

a) 85.

b) 100.

c) 120.

d) 150.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

64. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If EOQ lot sizing is used to set the minimum order quantity, then the planned order releases would be

a) 40 in period 1 and 0 in period 3.

b) 0 in period 2 and 80 in period 3.

c) 120 in period 2 and 120 in period 3.

d) 100 in period 2 and 100 in period 3.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

65. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If EOQ lot sizing is used to set the minimum order quantity, then the projected on hand quantity at the end of period 3 would be

a) 40.

b) 0.

c) 100.

d) 20.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

66. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If the periodic order quantity lot sizing rule is used, the number of periods worth of requirements would be

a) 0.

b) 1.

c) 2.

d) 3.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

67. A firm has the following gross requirements for Item F. If ordering costs are $60 per order and carrying costs are $0.50 per period.

If the periodic order quantity lot sizing rule is used, then planned order releases in Period 2 would be

a) 40 in period 1.

b) 60 in period 2.

c) 120 in period 3.

d) 140 in Period 2.

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

68. Given the following Product Structure Record:

The number of E’s required for each A would be

a) 3.

b) 6.

c) 12.

d) 24.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

69. Given the following Product Structure Record:

The number of F’s required for each A would be

a) 2.

b) 3.

c) 12.

d) 16.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

70. Given the following Product Structure Record:

The number of G’s required for each A would be

a) 2.

b) 8.

c) 12.

d) 24.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

71. Given the following Product Structure Record:

The number of I’s required for each A would be

a) 1.

b) 2.

c) 6.

d) 12.

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Application

AACSB: Analytic

72. Which of the following is the total length of time to manufacture a product?

a) time fence

b) cumulative lead time

c) production time

d) assembly time

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking

73. Which of the following is not a major input into capacity requirements planning (CRP)?

a) planned order releases

b) routing file

c) load profiles for each work centre

d) open orders file

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Comprehension

AACSB: Reflective Thinking

74. A load profile compares

a) requirements for all lower-level items to higher-level items.

b) cumulative lead times to projected lead times.

c) the quantities in which items should be produced to actual demand.

d) released and planned orders with work centre capacity.

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Comprehension

AACSB: Reflective Thinking

75. All of the following can be used for underloaded conditions except

a) acquiring additional work.

b) pushing work back.

c) pulling work ahead.

d) reducing normal capacity.

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Comprehension

AACSB: Reflective Thinking

76. Which of the following would not be used for an overloaded condition?

a) pulling work ahead

b) rerouting jobs to alternative work centres

c) pushing work back

d) splitting lots between two or more machines

Difficulty: Medium

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Comprehension

AACSB: Reflective Thinking

77. A while which specifies which machines or workers are required to complete an order from the MRP, is known as the:

a) open orders file

b) routing file

c) MRP file

d) load file

Difficulty: Easy

Learning Objective: Use capacity requirements planning (CRP) to calculate overloads and underloads and discuss options for levelling the load on a system.

Section Reference: 15.2 Capacity Requirements Planning (CRP)

Blooms: Knowledge

AACSB: Reflective Thinking

78. Which of the following best describes software that organizes and manages a company’s business processes by sharing information across functional areas?

a) EDI

b) ERP

c) RFID

d) CRP

Difficulty: Easy

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

79. All of the following are considered ERP modules except

a) finance and accounting

b) sales and marketing

c) production and materials management

d) fleet management

Difficulty: Easy

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

80. All of the following are steps in ERP implementation except

a) eliminating business processes

b) finalizing delivery and access

c) linking with external parties

d) choosing the modules to implement

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

81. Which of the following describes the selection of ERP modulus from different vendors?

a) vendor selection

b) best-of-breed

c) RFP

d) vendor bidding

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

82. QAD would be utilized for which step of ERP implementation?

a) analyze of business process

b) align level of sophistication

c) link with external partners

d) choose modules to implement

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

83. Which of the following describes software that plans and executes business processes involving customer interaction, such as sales, marketing, fulfilment, and customer service?

a) CRM

b) CRP

c) ERP

d) MRP II

Difficulty: Easy

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Knowledge

AACSB: Reflective Thinking

84. Software that manages the production development process, product lifecycles, and design collaboration with suppliers and customers is known as the ____.

a) CRM

b) ERP

c) PLM

d) SCM

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

85. Which of the following represents services that communicate with each other within or between software?

a) SaaS

b) SOA

c) XML

d) PLM

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

86. On-demand access of software from a provider’s site is known as ___.

a) SaaS

b) SOA

c) XML

d) CRM

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

87. The software which plans and executes the business processes related to supply chains is known as ___.

a) SaaS

b) SCM

c) ERP

d) CRM

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking

SHORT-ANSWER ESSAY QUESTIONS

88. How does MRP differ from the traditional inventory control systems?

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Synthesis

AACSB: Reflective Thinking; Communication

89. What is the difference between independent and dependent demand?

Difficulty: Hard

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Evaluation

AACSB: Reflective Thinking; Communication

90. When is it appropriate to use material requirements planning (MRP)?

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking; Communication

91. What is the master production schedule (MPS) and what role does it play in the material requirements planning (MRP) process?

Difficulty: Medium

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Comprehension

AACSB: Reflective Thinking; Communication

92. What is a bill of material?

Difficulty: Easy

Learning Objective: Use the material requirements planning (MRP) process to determine orders in a variable demand environment and document product structures through bills of material.

Section Reference: 15.1 Material Requirements Planning (MRP)

Blooms: Knowledge

AACSB: Reflective Thinking; Communication

93. What is Enterprise Resource Planning (ERP)?

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking; Communication

94. What steps are necessary to effectively implement Enterprise Resource Planning (ERP)?

Difficulty: Medium

Learning Objective: Discuss the basics of enterprise resource planning (ERP), including how it is used, key modules, and implementation issues.

Section Reference: 15.3 Enterprise Resource Planning (ERP)

Blooms: Comprehension

AACSB: Reflective Thinking; Communication

95. Briefly describe what software as a service (SaaS) is and discuss its benefits associated with the supply chain management.

Difficulty: Medium

Learning Objective: Explain how software related to ERP is used, including the complexities of integrating multiple business software systems.

Section Reference: 15.4 ERP and Related Software: Connectivity and Integration (ERP)

Blooms: Evaluation

AACSB: Reflective Thinking; Communication

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