Operations Management - Chapter 12 Exam

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Operations Management - Chapter 12 - Help Test Questions
1.1. MRP works best if the inventory items have dependent demand. True False
TRUE
MRP is best for dependent demand scenarios.
2.2. Low level coding represents items less than $18 per unit. True False
FALSE
Low-level coding codes items at their lowest BOM levels.
3.3. Independent demand tends to be more 'lumpy' than dependent demand meaning that we need large quantities followed by periods of no demand. True False
FALSE
Dependent demand is more lumpy.
4.4. Lumpy demand for components results primarily from the periodic scheduling of batch production. True False
TRUE
Batch production leads to lumpy demand for components.
5.5. MRP is used within most MRP II and ERP systems.
True False
TRUE
MRP II and ERP systems incorporate MRP.
6.6. The master production schedule states which end items are to be produced, in addition to when and how many. True False
TRUE
These are critical inputs into MRP.
7.7. Net requirements equal gross requirements minus safety stock. True False
FALSE
If safety stock is required, net requirements will be higher. 8.8. The master schedule needs to be for a period long enough to cover the stacked or cumulative lead time necessary to produce the end items. True False

TRUE
This ensures that materials plans can be adequately formulated. 9.9. Initially, a master production schedule - the output from MRP - may not represent a feasible schedule. True False
TRUE
Management must make more detailed capacity requirements planning to determine whether these more specific capacity requirements can be met and some adjustments in the master production schedule may be required. 10.10. MRP, considering inventory position, bills of material, open purchase orders and lead times guarantees a feasible production plan if the inputs to MRP are accurate. True False

FALSE
MRP may lead to an infeasible production plan if capacity requirements are not considered. 11.11. The bill of materials indicates how much material will be needed to produce the quantities on a given master production schedule. True False

FALSE
The bill of materials indicates how much material will be needed to produce one unit of the item in question. 12.12. A bill of materials contains a listing of all the assemblies, parts, and materials needed to produce one unit of an end item. True False

TRUE
The bill of materials indicates how much material will be needed to produce one unit of the item in question. 13.13. The bill of materials contains information on lead times and current inventory position on every component required to produce the end item. True False

FALSE
Inventory records contain this information.
14.14. The inventory records contain information on the status of each item by time period. True False
TRUE
Inventory records also contain information on lead times and current inventory position. 15.15. An assembly-time chart indicates gross and net requirements taking into account the current available inventory. True False

FALSE
Assembly-time charts have to do with capacity, not inventory. 16.16. MRP II did not replace or improve the basic MRP.
True False
TRUE
MRP II incorporates basic MRP.
17.17. The gross requirements at one level of an MRP plan determine the gross requirements at the next lower level continuing on down to the lowest levels shown on the bill of material. True False

FALSE
Released order quantities at one level determine gross requirements at the next lower level. 18.18. The gross requirements value for any given component is equal to the net requirements of that component's immediate parent multiplied by the quantity per parent. True False

FALSE
Released order quantities for the parent lead to gross requirements of the child. 19.19. The term pegging refers to identifying the parent items that have generated a given set of material requirements for a part or subassembly. True...
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