Resource Planning Verified Test Bank Ch.15 Russell

File: ch15; Chapter 15: Resource Planning

True/False

1. Material requirements planning (MRP) translates the master production schedule into requirements for components, subassemblies, and
   1. raw materials.
   2. supplier orders.
   3. capacity plan.
   4. work orders.
2. One objective of material requirements planning (MRP) is to utilize all available capacity.

Difficulty: Easy

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

1. The difference between independent and dependent demand is that
   1. independent demand is calculated and dependent demand is forecasted.
   2. independent demand is forecasted and dependent demand is calculated.
   3. independent demand is based on suppliers and dependent demand is based on customers.
   4. independent demand is based on customer and dependent demand is based on suppliers.
2. A forecast of dependent demand requirements is one of the major inputs into the MRP process.

Difficulty: Moderate

Learning Objective: LO 1

1. Complex products typically do not require material requirements planning (MRP) to plan production or monitor inventory levels.

Difficulty: Moderate

Learning Objective: LO 2

1. The master production schedule (MPS) is a major input for the MRP process.

Difficulty: Easy

Learning Objective: LO 2

1. The total length of time required to manufacture a product is called its
   1. total lead time.
   2. cumulative lead time.
   3. master lead time.
   4. cycle lead time.
2. Modular bills of material are used to group small, loose parts together into a kit.

Difficulty: Moderate

Learning Objective: LO 1

1. Information concerning on-hand quantities, lot sizes, and lead time can be found in the
   1. master production schedule (MPS).
   2. modular bill of materials.
   3. item master file.
   4. product structure file.
2. _________ are used in MRP to determine work or purchase order quantities.
   1. Load levelings
   2. Overloads
   3. Cycle countings
   4. Lot sizing rules
3. Gross requirements at one level of a product structure generate gross requirements at the next level.

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

1. The quantities displayed on a master production schedule represent production and NOT actual demand.

Difficulty: Moderate

Learning Objective: LO 2

1. 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: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

1. ______________ is taking the physical count of inventory at various time during the year.
   1. Annual inventory
   2. Period order quantity
   3. Cycle counting
   4. Netting

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 3

1. What is used to resolve underloaded and overloaded capacity conditions?
   1. Load leveling
   2. Load profile
   3. Lot for lot (L4L)
   4. Time phasing

Learning Objective: LO 3

1. Capacity requirements planning (CRP) converts the material plan into labor and machine workloads.

Difficulty: Easy

Learning Objective: LO 3

1. Capacity requirements planning (CRP) has three major inputs: (1) planned order releases, (2) routing files, and
   1. closed order files.
   2. open order files.
   3. fixed capacity plan.
   4. dynamic capacity plan.

Difficulty: Moderate

Learning Objective: LO 3

1. A load profile displays underloads and overloads.

Difficulty: Easy

Learning Objective: LO 3

1. What is a software that manages a company’s business processes by sharing information across functional areas?
   1. customer relationship management (CRM)
   2. materials resource planning (MRP)
   3. enterprise resource planning (ERP)
   4. product lifecycle management (PLM)
2. The application modules that comprise the ERP system are designed to support only customer relationship management processes.

Difficulty: Moderate

Learning Objective: LO 5

1. ERP is beneficial because it transforms transactional data into information that can be used to support decision making.

Difficulty: Moderate

Learning Objective: LO 5

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

Difficulty: Moderate

Learning Objective: LO 5

29. Best-of-breed enterprise resource planning (ERP) implementation refers to what?

1. The implementation the best ERP software from a single vendor.
2. The selection of ERP modules from different vendors.
3. The integration of ERP software with customer relationship management (CRM) software.
4. The integration of ERP software with supply chain management (SCM) software.

Difficulty: Moderate

Learning Objective: LO 5

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

Difficulty: Easy

Learning Objective: LO 5

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

Difficulty: Moderate

Learning Objective: LO 5

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

Difficulty: Moderate

Learning Objective: LO 5

33. Supply chain management (SCM) software plans and executes business processes related to a manufacturing firm.

Difficulty: Easy

Learning Objective: LO 5

34. Cloud computing involves on-demand IT services.

Difficulty: Easy

Learning Objective: LO 6

Multiple Choice

1. Material requirements planning (MRP) is a useful for all of the following except
2. dependent demand items.
3. discrete demand items.
4. independent demand items.
5. erratic orders.

Difficulty: Moderate

Learning Objective: LO 2

36. All of the following are inputs into the MRP process except

1. the master production schedule.
2. the product structure file.
3. the item master file.
4. the planned order report.

Difficulty: Easy

Learning Objective: LO 2

37. The product structure file provides all of the following information except

1. the product’s demand.
2. the items that go into the product.
3. a brief description of each item.
4. when and in what quantity each item is needed in the assembly process.

Difficulty: Easy

Learning Objective: LO 2

1. A phantom bill of material is used
2. to group small, loose parts together.
3. when the product is manufactured in major subassemblies.
4. for subassemblies that are immediately consumed in the next stage of production.
5. when due dates have not been calculated.

Difficulty: Moderate

Learning Objective: LO 2

1. A _______________ of material is used to plan the production of products with many optional features.
2. K-bill
3. modular bill
4. phantom bill
5. time-phased bill

Difficulty: Moderate

Learning Objective: LO 2

1. The item master file contains all the following except
2. on-hand quantities.
3. lead times.
4. planned order releases.
5. on-order quantities.

Difficulty: Moderate

Learning Objective: LO 2

1. The MRP process of subtracting on-hand quantities and scheduled receipts from gross requirements to produce net requirements is referred to as
2. cycle counting.
3. lot sizing.
4. exploding.
5. netting.

Difficulty: Moderate

Learning Objective: LO 2

1. The MRP process of determining requirements for lower level items based on the master production schedule is referred to as
2. lot sizing.
3. netting.
4. backward scheduling.
5. exploding.

Difficulty: Moderate

Learning Objective: LO 2

1. ______________ is a lot sizing technique that orders for multiple demand periods.
2. Lot-for-lot (L4L)
3. Periodic order quantity (POQ)
4. Economic order quantity(EOQ)
5. Multiple order quantity (MOQ)

Difficulty: Moderate

Learning Objective: LO 2

1. Given the following Product Structure Record

A

B(3)

C(2)

D(2)

E(1)

D(3)

G(2)

G(3)

G(3)

The number of E’s required for each A is

1. 1.
2. 2.
3. 3.
4. 4.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(3)

C(2)

D(2)

E(1)

D(3)

G(2)

G(3)

G(3)

The number of D’s required for each A is

1. 2.
2. 3.
3. 6.
4. 12.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(3)

C(2)

D(2)

E(1)

D(3)

G(2)

G(3)

G(3)

The number of G’s required for each A is

1. 40.
2. 20.
3. 18.
4. 3.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following MRP matrix for Item D:

The planned order release for period 3 is

1. 100.
2. 160.
3. 270.
4. 300.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item D:

The planned order release for period 5 is

1. 100.
2. 120.
3. 160.
4. 270.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item D:

The planned order receipt for period 6 is

1. 100.
2. 120.
3. 160.
4. 270.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item D:

The projected on hand quantity at the end of period 3 is

1. 0.
2. 20.
3. 60.
4. 70.

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 3 periods of requirements
2. 2 periods of requirements
3. 1 period of requirements
4. 0 period of requirements

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 270.
2. 290.
3. 340.
4. 560.

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 270.
2. 290.
3. 340.
4. 560.

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 330.
2. 270.
3. 0.
4. 140.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following Product Structure Record

A

B(2)

C(3)

E(2)

F(3)

F(2)

G(3)

D(6)

E(3)

H(1)

F(2)

I(1)

The number of I’s required for each A is

1. 1.
2. 2.
3. 6.
4. 12.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(2)

C(3)

E(2)

F(3)

F(2)

G(3)

D(6)

E(3)

H(1)

F(2)

I(1)

The number of F’s required for each A is

1. 6.
2. 12.
3. 18.
4. 24.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(2)

C(3)

E(2)

F(3)

F(2)

G(3)

D(6)

E(3)

H(1)

F(2)

I(1)

The number of G’s required to assemble 10 A’s is

1. 9.
2. 10.
3. 90.
4. 180.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following MRP matrix for Item E:

The planned order releases for period 1 is

1. 300.
2. 200.
3. 75.
4. 0.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item E:

The projected on hand quantity at the end of period 3 is

1. 0.
2. 100.
3. 300.
4. 500.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item E:

The planned order releases for period 3 is

1. 300.
2. 200.
3. 75.
4. 0.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following MRP matrix for Item E:

The planned order releases for period 4 is

1. 300.
2. 200.
3. 75.
4. 0.

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 40 in period 1 and 0 in period 3
2. 80 in period 2 and 60 in period 3
3. 60 in period 2 and 80 in period 3
4. 0 in period 1 and 40 in period 3

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 85
2. 100
3. 120
4. 150

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 40 in period 1 and 0 in period 3
2. 0 in period 2 and 80 in period 3
3. 120 in period 2 and 120 in period 3
4. 100 in period 2 and 100 in period 3

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 40.
2. 0.
3. 100.
4. 20.

Difficulty: Hard

Learning Objective: LO 2

1. 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 period’s worth of requirements is

1. 0.
2. 1.
3. 2.
4. 3.

Difficulty: Hard

Learning Objective: LO 2

1. 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 is

1. 40 in period 1.
2. 60 in period 2.
3. 120 in period 3.
4. 140 in Period 2.

Difficulty: Hard

Learning Objective: LO 2

1. Given the following Product Structure Record

A

B(3)

C(2)

E(2)

E(3)

F(2)

D(4)

F(3)

G(2)

The number of E’s required for each A is

a. 3.

b. 6.

c. 12.

d. 24.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(3)

C(2)

E(2)

E(3)

F(2)

D(4)

F(3)

G(2)

The number of F’s required for each A is

a. 2.

b. 3.

c. 12.

d. 16.

Difficulty: Moderate

Learning Objective: LO 1

1. Given the following Product Structure Record

A

B(3)

C(2)

E(2)

E(3)

F(2)

D(4)

F(3)

G(2)

The number of G’s required for each A is

a. 2.

b. 8.

c. 12.

d. 24.

Difficulty: Moderate

Learning Objective: LO 1

1. Which of the following is not a major input into capacity requirements planning (CRP)?
2. planned order releases
3. routing file
4. load profiles for each work center
5. open orders file

Difficulty: Moderate

Learning Objective: LO 3

1. A load profile compares
2. requirements for all lower-level items to higher-level items.
3. cumulative lead times to projected lead times.
4. the quantities in which items should be produced to actual demand.
5. released and planned orders with work center capacity.

Difficulty: Moderate

Learning Objective: LO 3

1. All of the following can be used for underloaded conditions except
2. acquiring additional work.
3. pushing work back.
4. pulling work ahead.
5. reducing normal capacity.

Difficulty: Moderate

Learning Objective: LO 3

1. Which of the following would not be used for an overloaded condition?
2. pulling work ahead
3. rerouting jobs to alternative work centers
4. pushing work back
5. splitting lots between two or more machines

Difficulty: Moderate

Learning Objective: LO 3

1. _____________________ is a software that organizes and manages a firms business processes by sharing information across functional areas.
   a. Materials requirement planning (MRP)

b. Enterprise requirements planning (ERP)

c. Product lifecycle management (PLM)
d. None of these answer choices is correct.

Difficulty: Easy
Learning Objective: LO 5

1. ERP systems consist of a series of __________________ that can be used alone or in concert.
   a. accounting applications

b. application modules

c. personal computers
d. None of these answer choices is correct.

Difficulty: Easy
Learning Objective: LO 5

1. Which one of the following is not one of the four main categories of ERP modules?
   a. Finance/Accounting
   b. Sales/Marketing
   c. Human Resources
   d. Information Technology

Difficulty: Easy
Learning Objective: LO 5

1. ______________ refers to the selection of ERP modules from different vendors.
   a. Integrated systems
   b. Best-of-breed
   c. Purchase optimization
   d. None of these answer choices is correct.

Difficulty: Easy

Learning Objective: LO 5

1. In ERP systems, advanced analytical capabilities that support decision making collectively is called business
   a. intelligence.
   b. support systems.
   c. decision protocol.
   d. None of these answer choices is correct.

Difficulty: Moderate
Learning Objective: LO 5

1. _______________________ software plans and executes business processes involving customer interaction.
   a. Product lifecycle management
   b. Customer relationship management
   c. Supply chain management
   d. ERP

Difficulty: Moderate
Learning Objective: LO 5

1. ________________________ software plans and executes business processes involving supplier interaction.
   a. Product lifecycle management
   b. Customer relationship management
   c. Supply chain management
   d. ERP

Difficulty: Moderate
Learning Objective: LO 5

1. ____________________ software manages the design interaction between suppliers and customers.

a. Product lifecycle management
b. Customer relationship management
c. Supply chain management
d. ERP

Difficulty: Moderate
Learning Objective: LO 5

1. Enterprise application integration software, which breaks down complex business processes into a series of transactions between applications, typically uses which of the following programming languages?
   a. EDI

b. XML

c. SCM

d. PLM

Difficulty: Easy
Learning Objective: LO 6

1. With _________________, customers can bundle together the services that they need and not purchase the entire system.
   a. cloud computing
   b. service-oriented architecture
   c. software as a service
   d. XML

Difficulty: Moderate
Learning Objective: LO 6

1. With _________________, on-demand IT services are provided over the Internet.
   a. cloud computing
   b. service-oriented architecture
   c. software as a service
   d. XML

Difficulty: Moderate

Learning Objective: LO 6

Short Answer

1. How does MRP differ from traditional inventory control systems?

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Hard

Learning Objective: LO 1

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

Difficulty: Moderate

Learning Objective: LO 2

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

Difficulty: Moderate

Learning Objective: LO 2

1. What is a bill-of-material?

Difficulty: Easy

Learning Objective: LO 2

1. What is Enterprise Resource Planning (ERP)?

Difficulty: Moderate

Learning Objective: LO 5

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

Difficulty: Moderate

Feedback:

Learning Objective: LO 5

93. Which of the following choices is not true about material requirements planning?

a) It is a computerized inventory control and production planning system.

b) One of its objectives is to maintain the lowest possible level of inventory.

c) It simplifies inventory control by handling inventories of raw materials, components, and finished goods in the same manner.

d) It is useful for dependent and discrete demand times, complex products, job shop production, and assemble-to-order environments.

94. Which of the following choices is true about MRP (material requirements planning)?

a) The MRP process has three major inputs: the master production schedule, the product structure file, and the K-bills.

b) MRP systems are not very useful in industries in which the customer is allowed to choose among different options.

c) The advantages of MRP are more evident when the manufacturing environment is complex and uncertain.

d) MRP minimizes the level of inventory by scheduling components to be ready when they are needed or earlier, but not later.

95. The cumulative lead time __________.

a) is the total length of time needed to manufacture a product

b) is the sum of the lead times of all components of a product

c) can be shortened by using major assemblies and subassemblies

d) All of the above choices are correct.

96. Which of the following choices in not true about the master production schedule?

a) It specifies which end items or finished products a firm is to produce, how many are needed, and when they are needed.

b) It works within the constraints of the aggregate production plan and produced a schedule for product lines or families.

c) It is usually expressed in days or weeks but may extend over several months.

d) It drives the MRP process.

97. In a master production schedule (MPS) __________.

a) the quantities represent demand, which can be actual customer orders and demand forecasts

b) the feasibility is guaranteed from the start, since the MSP works within the constraints of the aggregate production plan

c) all the quantities represent, directly or indirectly, finished products

d) some companies set a fence time, within which no more changes to the MSP are allowed.

98. The product structure file __________.

a) contains a bill of material when needed, i.e., for critical items

b) specifies when each item is needed, which can best be described in a multilevel indented bill of material

c) includes a brief description of each item

d) All of the above choices are correct.

99. K-bills __________.

a) are also known as modular bills of material

b) reduce the processing time for orders for small, inexpensive items that are usually ordered infrequently in large quantities

c) reduce the processing time for orders for small, inexpensive items that are usually ordered frequently in small quantities

d) use a common prefix for related or similar parts such as fasteners, nuts, and bolts, so it’s easier to identify them

100. If an automobile is available with three engine types, ten exterior colors, six interior colors, four types of interiors, and five types of car bodies, then there are __________.

a) 28 possible model configurations and 28 bills of materials

b) 3600 possible model configurations and 3600 modular bills of material, if a bill of material is used for each option rather than each combination of options

c) 3600 possible model configurations and 28 modular bills of material, if a bill of material is used for each option rather than each combination of options

d) 28 possible model configurations and 28 modular bills of material, if a bill of material is used for each option rather than each combination of options

101. Which of the following choices is not true about capacity requirements planning?

a) It is a computerized system that projects the load from a given material onto the capacity of a system.

b) It is designed to identify overloads but is usually unable to identify underloads.

c) It has three major inputs: planned order releases, a routing file, and an open orders file.

d) It allows the MRP planner to level the load, by shifting requirements, reducing requirements, or temporarily expanding capacity.

102. Which of the following choices is not true about capacity?

a) It is affected by the mix of products and services, the choice of technology, the size of a facility, and the resources allocated.

b) Effective capacity takes into account the efficiency with which a particular product or customer can be processed.

c) Effective capacity in hours per day is the product of the number of machines or workers, the number of shifts, the utilization, and the efficiency.

d) Rated capacity is the maximum output that can be achieved under normal operating conditions.