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Chapter 1

In the MPC process, capacity decisions (equipment, facilities, suppliers, etc.)

are most likely to occur in what time horizon? Long term
In the MPC process, detailed scheduling decisions are most likely to occur in
what time horizon? Short term
Master Production Scheduling (MPS) and Resource Planning are a part of
which MPC phase? Intermediate term
Measurement and Control are a part of which MPC phase? Execution or BackEnd
Products that are part of a one-time production process (e.g. bridges or
aircraft carriers) would most likely use which form of MPC? Project
MPS differs from the forecast by considering: capacity limits, production
costs, and SOP.
MPS considers preferred lot sizes when constructing the plan.
Cycle stock is inventory carried as a result of lot size requirements
A planning BOM represents usage in an ATO environment
Final Assembly Schedule represents the assembly when a planning BOM is
used, the exact set of end products to be built in an ATO, the plan for moving
pre-fabricated components into completed products.
Inside the demand fence, ATP calculations ignore forecasts.
Inside the planning fence, changes to production orders are not allowed
To avoid and overstated MPS is force the MPS to match the production plan
(in terms of total units)
Chapter 1a
To free the ERP system for basic applications, a _______ _______ is often used
to capture, manage, and analyze data. Data warehouse
For a firm with average daily sales (Sd) of $200,000, current inventory (I) of
$1,000,000, and cost of sales (CS) of 50%, what is the average days of
inventory (Id)? 10
Which of the following actions would be likely to increase the cash-to-cycle
time for a firm?

Increasing the cost, but not the price, of the product Increase

Taking advantage of early pay discounts with suppliers


Revaluing inventory to reflect reductions in purchasing prices


Chapter 2
Demand Management (DM) includes which of the following activities?


Product shipping

Entering customer orders

The customer order decoupling point is best defined as ____________. The

point where demand changes from independent to dependent
In an Assemble-to-Order environment, the most likely point where customer
order decoupling would take place is ______________. Work-in-Process
Sales and Operations Planning can be completed at which of the following
levels All

Product Family


Organizational Unit

The main goal of a Collaborative Planning, Forecasting, and Replenishment

(CPFR) process is to _________________. Reduce the variance between supply
and demand for individual products
Chapter 3
A forecast used for Master Production Scheduling and Control is likely to cover
a period of _____________. A few days to a few weeks
Regression analysis where the relationship between variables is a straight line
is called _______ _______. Linear regression
In a time series analysis, time is the _________ variable. Independent
An exponential smoothing forecast considers all past data (T/F). True

In an exponential smoothing forecast, a higher level of alpha () will place

more emphasis on recent history (T/F). True
Mean error of a forecast provides information concerning the forecasts
________. Bias
Chapter 4
The four fundamental issues in Sales and Operations Planning are __________.
Demand, supply, volume, and mix
Sales and Operations Planning balances supply and demand at the ______
level. Volume
Many key Sales and Operations Planning linkages are outside the
Manufacturing Planning and Control (MPC) system. (True/False) True
A strategy which matches monthly supply to forecasted demand is ________.
A strategy which maintains a consistent monthly output is _________. Level
The primary obligation for any functional area is to hit the plan. (True/False)
SOP is to provide early warning when demand and supply become
SOP and MPS should be stated in the same units, the SOP is stated in
aggregate units
Recommended number of products for SOP is 6-12
The MPS disaggregates the operations plan
Advantages of SOP: visibility of interaction between functional groups,
identification of the trade-offs between functional groups
Capacity planning occurs during the supply planning phase of SOP
Decisions concerning the balance of supply and demand are made in Pre-SOP
Product family groups should represent Sales and Marketing view of the
SBU planning involves grouping information by products and markets

Chapter 4a
The objective of a Linear Programming planning approach is to ___________.
Find the lowest-cost plan
Microsoft Excel has both Linear Programming and Mixed Integer Programming
capabilities. (True/False) True
A key step in the modeling process is to identify assumptions. (True/False)
Determination of inventory holding costs is generally a simple process with
few assumptions. (True/False) False
The Advanced Sales and Operations process can be implemented as soon as
a firm starts using Sales and Operations Planning. (True/False) False
Chapter 5
The Master Production Schedule (MPS) shows when products will physically
be available to ship? (True or False) True
In which environment is a planning bill-of-material (BOM) most likely to be
used? Assemble-to-order
Available-to-promise (ATP) is likely to be least useful in which environment?
A Super Bill represents average usage of components in an assemble-to-order
environment? (True or False) True
When the master production schedule (MPS) is frozen for some period,
changes to the plan within that period are typically prohibited? True
Chapter 6
Material Requirements Planning (MRP) takes place in the front end systems of
the manufacturing planning and control system? (True/False) False
In a Material Requirements Planning (MRP) system, what does time-phasing
of gross requirements mean? Requirements are stated on a period-by-period
basis according to the anticipated future usage
Front scheduling logic starts each step of the process as late as possible?
(True/False) False
A lot-for-lot order policy generates orders for a fixed quantity, independent of
actual requirements? (True/False) False

Processing all Material Requirements Planning (MRP) records in a single

computer run is called ___________? Regeneration
Safety lead time involves inflating lead times to ensure stock availability?
(True/False) False
Chapter 6a
What is the primary consideration when selecting a lot-sizing procedure? The
nature of the net requirements data
In a situation where the main source of uncertainty is due to timing of
customer orders, which buffering strategy would be expected to perform
best? Safety lead time
In a situation where the main source of uncertainty is due to quantity of
demand, which buffering strategy would be expected to perform best? Safety
Chapter 7
Which capacity planning activities are considered long-range plans? Resource
planning and rough-cut capacity planning Short-range plans? Finite loading
and input/output analysis Medium-range plans? Capacity requirement
Resource planning is most closely linked with which MPC element? Sales and
Operations Planning
The capacity planning using overall factors (CPOF) technique is likely to
perform poorly in a just-in-time (JIT) environment? (True/False) False
Capacity requirements planning (CRP) ignores current finished goods and WIP
inventory? (True/False) False
According to the Theory of Constraints, bottleneck and non-bottleneck work
centers should be managed similarly? (True/False) False
Ways CRP differ from rough-cut capacity planning techniques: CRP uses a
time-phased approach, CRP considers service part demand.
The horizontal loading scheduling approach is more likely to result in higher
capacity utilization.
The vertical loading scheduling approach is more likely to result in more
complete jobs at the end of the planning cycle.
Input/output control compares planned inputs and outputs to actual values.

Measures of capacity: machine-hours and labor-hours.

Capacities may need to be managed: direct labor, inspection, and
CPOF and capacity bills likely to return the same capacity requirement
results: when planning for a single product that is produced in a single work
CPOF is based on accounting and/or historical data
CRP is most closely linked to detailed material planning
Chapter 8
Production activity control (PAC) actions take place mainly in which section of
the MPC system? Back-end
The shop-floor control system is kept current on changes in material plans by
the MRP system? (True/False) True
Formal shop-floor control systems are unnecessary under JIT? (True/False)
A visual representation of the scheduling process can be provided by
_________ charts. Gantt
The TOC scheduling process is called ______-_________-_________. Drum-bufferrope
In TOC scheduling, buffers are maintained before and after _____________
resources. Bottleneck
MRP system includes: BOM and Inventory status data.
MRP system translate the overall production plan into detailed steps and
provide information for capacity planning.
MRP, gross requirement are anticipated future usage or demand for the item
during each period.
MRP, scheduled receipts are existing replenishment orders for the item due at
the beginning of each period.
MRP, projected available balance is current and projected inventory status for
the item at the end of the period.

MRP, gross requirements are time-phased means requirements from all

periods are stated on a period-by-period basis.
Safety stock is an inventory buffer of stock over and above requirements.
Information concerning the specific source of demand is called pegging
A commitment to an external supplier is represented in the MRP system by a
scheduled receipt.
MRP planner: confirm inventory counts on incoming shipments.
A well-functioning MRP system, 10-20%
Exception codes: open order timing/amount not satisfactory and need for
management intervention
Chapter 8a
In the one-machine case, the order of job processing is not an important
factor in performance? (True/False) False
The shortest processing time (SPT) sequencing rule performs well to minimize
overall job lateness? (True/False) True
One means of evaluating the effectiveness of due date-setting is _________
__________ _____________.Due date tightness
In TOC, original orders may be divided into smaller quantities called
_____________ batches. Transfer
Chapter 9
JIT replaces discrete manufacturing batches with ____________ ___________
goals. Production rate
Under JIT, the objective is to reduce _________, __________, and ______________.
Setup times, lot sizes, and defects
Transactions required to track materials, verify activities, ensure quality, and
manage changes are referred to as the ___________ factory. Hidden
JIT is likely to utilize a push scheduling system? (True/False) False
A kanban system is used to manage ___________ transactions. Inventory

JIT adoption may require a change in measurement and reward systems?

(True/False) True
Chapter 10
A major tool in DRP systems is the ____________ record.DRP
Customer purchases are generally part of _________ demand. Independent
The time-phased order point (TPOP) approach uses what type of data to
determine requirements? Forecast
DRP systems can utilize both safety stock and safety lead time? (True/False)
Chapter 10a
When stages of the supply chain are considered separately, sub-optimization
is likely to occur? (True/False) True
In general, shipping full loads will be less costly (per unit) than using the
services of a less than carload (LCL) carrier? (True/False) True
Warehouses are beneficial to customers in terms of both __________ and
_________. Time and Place Utility
When the safety stock requirements of several warehouses are consolidated
to a single location the total required stock is likely to increase? (True/False)
Base stock systems reduce or eliminate the problem of amplification of
orders? (True/False) True
Chapter 11
Order point methods are generally used for _____________ demand items.
Cycle stocks are a result of manufacturing lot sizes? (True/False) True
Stock produced for upcoming promotional events would be considered
_______________ stock. Anticipation
The two main decisions when managing independent demand items are
_______________ and ______________. How much to order and when to order
A measurement that relates inventory levels to product sales volume is
___________ _____________. Inventory turnover

The three types of costs associated with holding inventory are ____________,
______________, and ____________. Order preparation, inventory carrying, and
shortage/customer service
Chapter 12
In a situation where manufacturing lead time exceeds customer requirements
and products can be assembled from modules, an _________-__-___________
approach is most likely. Assemble-to-order
Design of an MPC system begins with an analysis of _________ requirements.
Which master scheduling approach requires a high level of attention to
forecast accuracy? Make-to-stock
Which material planning approach is likely to utilize kanbans and level loaded
production? Rate-based
Which shop-floor system is likely to carry higher levels of safety stock and
work-in-process inventory? MRP