ISDS 3115 REVIEW CHAPTER 14 QUESTIONS WITH
VERIFIED ANSWERS
Wheeled Coach obtains competitive advantage through MRP in part because of their
excellent record integrity and insistence on record accuracy. - Answers - T
MRP is generally practiced on items with dependent demand. - Answers - T
Reduced inventory levels and faster response to market changes are both benefits of
MRP. - Answers - T
A dependent demand item is so called because its demand is dependent on customer
preferences. - Answers - F
The quantity required of a dependent demand item is computed from the demand for
the final products in which the item is used. - Answers - T
Since MRP is quite detailed in nature, it has no influence on the longer-range, less
detailed aggregate planning. - Answers - F
The master production schedule is a forecast of demand for families of products. -
Answers - F
Lead times, inventory availability, and purchase orders outstanding are among the five
things operations managers must know for effective use of MRP. - Answers - T
) A bill of material lists all components, ingredients, and materials needed to produce
one unit of an end item. - Answers - T
Phantom bills" are bills of material for subassemblies that do not exist in reality. -
Answers - F
) Planning bills of material are bills of material for "kits" of inexpensive items such as
washers, nuts, and bolts. - Answers - T
The Aggregate Plan, derived from the Master Production Schedule, specifies in more
detail how much of which products is to be made at what times. - Answers - F
The time-phased product structure, unlike the bill of material, adds the concept of lead
times. - Answers - T
,If X consists of one A and one B, and each A consists of one F and two Gs, then A is
the "parent" component of G. - Answers - T
If 100 units of Q are needed and 10 are already in stock, then the gross requirement is
100 and the net requirement is 90. - Answers - T
Gross material requirements do not take into account the amount of inventory on hand.
- Answers - T
In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ. - Answers - F
Time fences divide that segment of the MPS that can be revised from that section that is
"frozen." - Answers - T
) MRP is an excellent tool for scheduling products with variable lead times. - Answers -
F
Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of
departments and machines when building schedules. - Answers - T
If parts and subassemblies common to a variety of products are managed through the
supermarket concept, formal order releases for such parts are not necessary. - Answers
-T
The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very
smooth and set up cost is small compared to holding cost. - Answers - T
In general, the lot-for-lot approach should be used whenever economical.
Answer: TRUE - Answers - T
The economic part period is a fraction of a time bucket. - Answers - F
The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.
Answer: FALSE - Answers - F
MRP can be effective only if very accurate lot sizes are calculated in advance. -
Answers - F
Smoothing a resource requirements profile to stay within capacity limits may increase
setup costs. - Answers - T
) Closed-loop MRP systems allow production planners to move work between time
periods to smooth the load or to at least bring it within capacity. - Answers - T
Operations splitting sends pieces to the next operation before the entire lot is completed
on the previous operation. - Answers - F
, When safety stock is deemed absolutely necessary, the usual policy is to build it into the
projected on-hand inventory of the MRP logic. - Answers - T
By convention, the top level in a bill of material is designated level 1. - Answers - F
DRP is a time-phased stock-replenishment plan for all levels of a distribution network. -
Answers - T
While ERP may provide a strategic advantage over competitors, it is so complex that
many companies cannot adjust to it. - Answers - T
Firms may discover that, rather than adapting ERP to the way they do business, they
have to adapt the way they do business to accommodate the ERP software. - Answers -
T
The supply-chain systems that result from using ERP in the grocery industry are called
efficient consumer response (ECR) systems. - Answers - T
Which of the following statements regarding Wheeled Coach is false?
A) Wheeled Coach has found competitive advantage through MRP.
B) Wheeled Coach builds ambulances in a repetitive process.
C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but
caused inventory to rise.
D) Wheeled Coach's MRP system maintains excellent record integrity.
E) Low inventory and high quality are two positive outcomes of Wheeled Coach's use of
MRP. - Answers - C
Wheeled Coach insists all of the following tasks are key to successful MRP use except
A) materials plan must meet both schedule requirements and facility capabilities
B) plan must be executed as designed
C) inventory investment must be minimized
D) excellent record integrity must be maintained
E) stringent quality control - Answers - E
Demand for a given item is said to be dependent if
A) it originates from the external customer
B) there is a deep bill of material
C) the finished products are mostly services (rather than goods)
D) there is a clearly identifiable parent
E) the item has several children - Answers - D
The phrase "demand related to the demand for other products" describes
A) a dependent variable
B) dependent demand
C) recursive demand
VERIFIED ANSWERS
Wheeled Coach obtains competitive advantage through MRP in part because of their
excellent record integrity and insistence on record accuracy. - Answers - T
MRP is generally practiced on items with dependent demand. - Answers - T
Reduced inventory levels and faster response to market changes are both benefits of
MRP. - Answers - T
A dependent demand item is so called because its demand is dependent on customer
preferences. - Answers - F
The quantity required of a dependent demand item is computed from the demand for
the final products in which the item is used. - Answers - T
Since MRP is quite detailed in nature, it has no influence on the longer-range, less
detailed aggregate planning. - Answers - F
The master production schedule is a forecast of demand for families of products. -
Answers - F
Lead times, inventory availability, and purchase orders outstanding are among the five
things operations managers must know for effective use of MRP. - Answers - T
) A bill of material lists all components, ingredients, and materials needed to produce
one unit of an end item. - Answers - T
Phantom bills" are bills of material for subassemblies that do not exist in reality. -
Answers - F
) Planning bills of material are bills of material for "kits" of inexpensive items such as
washers, nuts, and bolts. - Answers - T
The Aggregate Plan, derived from the Master Production Schedule, specifies in more
detail how much of which products is to be made at what times. - Answers - F
The time-phased product structure, unlike the bill of material, adds the concept of lead
times. - Answers - T
,If X consists of one A and one B, and each A consists of one F and two Gs, then A is
the "parent" component of G. - Answers - T
If 100 units of Q are needed and 10 are already in stock, then the gross requirement is
100 and the net requirement is 90. - Answers - T
Gross material requirements do not take into account the amount of inventory on hand.
- Answers - T
In MRP, a "bucket" refers to a fixed order quantity, such as an EOQ. - Answers - F
Time fences divide that segment of the MPS that can be revised from that section that is
"frozen." - Answers - T
) MRP is an excellent tool for scheduling products with variable lead times. - Answers -
F
Finite capacity scheduling, unlike MRP, recognizes the capacity limitations of
departments and machines when building schedules. - Answers - T
If parts and subassemblies common to a variety of products are managed through the
supermarket concept, formal order releases for such parts are not necessary. - Answers
-T
The lot-for-lot lot-sizing technique is particularly appropriate when demand is not very
smooth and set up cost is small compared to holding cost. - Answers - T
In general, the lot-for-lot approach should be used whenever economical.
Answer: TRUE - Answers - T
The economic part period is a fraction of a time bucket. - Answers - F
The Wagner-Whitin algorithm is the most widely used MRP lot-sizing technique.
Answer: FALSE - Answers - F
MRP can be effective only if very accurate lot sizes are calculated in advance. -
Answers - F
Smoothing a resource requirements profile to stay within capacity limits may increase
setup costs. - Answers - T
) Closed-loop MRP systems allow production planners to move work between time
periods to smooth the load or to at least bring it within capacity. - Answers - T
Operations splitting sends pieces to the next operation before the entire lot is completed
on the previous operation. - Answers - F
, When safety stock is deemed absolutely necessary, the usual policy is to build it into the
projected on-hand inventory of the MRP logic. - Answers - T
By convention, the top level in a bill of material is designated level 1. - Answers - F
DRP is a time-phased stock-replenishment plan for all levels of a distribution network. -
Answers - T
While ERP may provide a strategic advantage over competitors, it is so complex that
many companies cannot adjust to it. - Answers - T
Firms may discover that, rather than adapting ERP to the way they do business, they
have to adapt the way they do business to accommodate the ERP software. - Answers -
T
The supply-chain systems that result from using ERP in the grocery industry are called
efficient consumer response (ECR) systems. - Answers - T
Which of the following statements regarding Wheeled Coach is false?
A) Wheeled Coach has found competitive advantage through MRP.
B) Wheeled Coach builds ambulances in a repetitive process.
C) Wheeled Coach's MRP system allowed the company to meet tight schedules, but
caused inventory to rise.
D) Wheeled Coach's MRP system maintains excellent record integrity.
E) Low inventory and high quality are two positive outcomes of Wheeled Coach's use of
MRP. - Answers - C
Wheeled Coach insists all of the following tasks are key to successful MRP use except
A) materials plan must meet both schedule requirements and facility capabilities
B) plan must be executed as designed
C) inventory investment must be minimized
D) excellent record integrity must be maintained
E) stringent quality control - Answers - E
Demand for a given item is said to be dependent if
A) it originates from the external customer
B) there is a deep bill of material
C) the finished products are mostly services (rather than goods)
D) there is a clearly identifiable parent
E) the item has several children - Answers - D
The phrase "demand related to the demand for other products" describes
A) a dependent variable
B) dependent demand
C) recursive demand
