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1. MRP works best if the inventory items have dependent demand.

2. Low level coding represents items less than $18 per unit.

3. Independent demand tends to be more 'lumpy' than dependent demand meaning that we need
large quantities followed by periods of no demand.

4. Lumpy demand for components results primarily from the periodic scheduling of batch
production.

5. MRP is used within most MRP II and ERP systems.

6. The master production schedule states which end items are to be produced, in addition to when
and how many.

7. Net requirements equal gross requirements minus safety stock.

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.

9. Initially, a master production schedule - the output from MRP - may not represent a feasible
schedule.

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.

11. The bill of materials indicates how much material will be needed to produce the quantities on
a given master production schedule.

12. A bill of materials contains a listing of all the assemblies, parts, and materials needed to
produce one unit of an end item.

13. The bill of materials contains information on lead times and current inventory position on
every component required to produce the end item.

14. The inventory records contain information on the status of each item by time period.

15. An assembly-time chart indicates gross and net requirements taking into account the current
available inventory.

16. MRP II did not replace or improve the basic MRP.

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.

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.
19. The term pegging refers to identifying the parent items that have generated a given set of
material requirements for a part or subassembly.

20. A net-change MRP system is one that is updated periodically but not less frequently than
once a week.

21. One reason that accurate bills of material are important is that errors at one level become
magnified at lower levels because of the multiplication process used by MRP.

22. A regenerative MRP system is one that is updated continuously - every time there is a
schedule change.

23. One of the primary output reports of MRP concerns changes to planned orders.

24. Safety time is sometimes used in MRP rather than safety stock quantities.

25. Lot-for-lot ordering in MRP provides coverage for some predetermined number of periods
using forecasted demand to extend beyond the orders already received for those periods.

26. MRP output reports are divided into two main groups - daily and weekly.

27. In MRP, EOQ models tend to be less useful for materials at the lowest levels than for upper
level assemblies of the bill of materials since higher-level assemblies have larger dollar
investments.

28. Load reports show capacity requirements for departments or work centers which may be
more or less than the capacity available in that work center.

29. ERP began in manufacturing organizations but has spread into service organizations.

30. MRP II is simply an improved version of MRP that processes faster and can plan for a larger
number of end items.

31. Lot-for-lot ordering in MRP eliminates the holding costs for parts that are carried over to
other periods.

32. Capacity requirements planning (CRP) is an important feature in MRP+.

33. Project Management approaches can help in a conversion to an ERP system.

34. As long as a forecast is plus or minus 10%, MRP works well.

35. ERP represents an expanded effort to integrate standardized record-keeping that shares
information among different areas of an organization.

36. Back flushing takes place after the production has been completed.

37. Before a schedule receipt can take place, and order must be placed with a vendor.

38. MRP really doesn't apply to services since raw material isn't required.
39. ERP implementation requires support and a direct mandate from the CEO because it impacts
so many different functional areas.

40. ERP automates the tasks involved in performing a business process, such as order fulfillment
and financial reporting.

41. Which of the following most closely describes dependent demand?

A. demand generated by suppliers
B. estimates of demand using regression analysis of independent variables
C. derived demand
D. demands placed on suppliers by their customers
E. net material requirements

42. ERP implementation probably won't require:

A. cross functional teams
B. just a few weeks to install
C. intensive training
D. high funding for both initial cost and maintenance
E. frequent upgrades after installation

43. A computer-based information system designed to handle ordering and scheduling of

dependent-demand inventories is:
A. computer aided manufacturing (CAM)
B. computer integrated manufacturing (CIM)
C. economic order quantity (EOQ)
D. material requirements planning (MRP)
E. economic run size (ERS)

44. The development and application of MRP depended upon two developments: (1) the
recognition of the difference between independent and dependent demand, and (2):
A. computers
B. development of the EOQ model
C. inventory control systems
D. blanket purchase orders
E. the internet

45. The output of MRP is:

A. gross requirements
B. net requirements
C. a schedule of requirements for all parts and end items
D. inventory reorder points
E. economic order quantities and reorder points
46. Which one of the following is not an input in an MRP system?
A. planned-order schedules
B. bill of materials
C. master production schedule
D. inventory records
E. All are inputs.

47. The MRP input stating which end items are to be produced, when they are needed, and what
quantities are needed, is the:
A. master schedule
B. bill-of-materials
C. inventory-records
D. assembly-time chart
E. net-requirements chart

48. In an MRP master schedule, the planning horizon is often separated into a series of times
periods called:
A. pegging
B. lead times
C. stacked lead times
D. time buckets
E. firm, fixed and frozen

49. The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to
produce one unit of finished product is the:
A. master production schedule
B. bill-of-materials
C. inventory-records
D. assembly-time chart
E. net-requirements chart

50. A visual depiction of the subassemblies and components that are needed to produce and/or
assemble a product is called a(n):
A. assembly time chart
B. product structure tree
C. MRP II
D. pegging
E. Gantt chart

51. The MRP input storing information on the status of each item by time period (e.g., scheduled
receipts, lead time, lot size) is the:
A. master production schedule
B. bill-of-materials
C. inventory-records
D. assembly-time chart
E. net-requirements chart
52. Which one of the following most closely describes net material requirements?
A. gross requirements - amount on-hand - scheduled receipts
B. gross requirements - planned receipts
C. gross requirements - order releases + amount on-hand
D. gross requirements - planned order releases
E. gross requirements - amount on-hand + planned order releases

53. In MRP, "scheduled receipts" are:

A. identical to "planned-order receipts"
B. identical to "planned-order releases"
C. open orders (that is, ordered before the first time bucket, but not delivered yet)
D. "net requirements"
E. available to promise inventory

54. In MRP, under lot-for-lot ordering, "planned-order receipts" are:

A. identical to "scheduled receipts"
B. identical to "planned-order releases"
C. open orders (that is, ordered before the first time bucket, but not delivered yet)
D. "gross requirements"
E. available to promise inventory

55. Under lot-for-lot, order sizes for component parts are essentially determined directly from
which one of the following?
A. gross requirements
B. net requirements
C. economic order quantity
D. gross requirements - net requirements
E. net requirements - amount on-hand

56. In MRP, the gross requirements of a given component part are calculated from:
A. net requirements + amount on-hand.
B. gross requirements of the immediate parent.
C. planned orders of the end item.
D. net requirements of end item.
E. planned orders of the immediate parent.

57. The identification of parent items is called:

A. Paternity
B. Pegging
C. Requirement I.D.
D. Relationship tracking
E. Master Scheduling
58. Periodic updating of an MRP system to account for all changes which have occurred within a
given time interval is called:
A. pegging
B. planned order release
C. net change
D. regenerative
E. exception report

59. An MRP system whose records are updated continuously is referred to as a(n):
A. regenerative system
B. batch-type system
C. Plossl-Wright system
D. net-change system
E. gross-change system

60. Which is true of a net-change system?

A. It is a batch-type system which is updated periodically.
B. It is usually run at the beginning of each month.
C. The basic production plan is modified to reflect changes as they occur.
D. It is used to authorize the execution of planned orders.
E. It indicates the amount and timing of future changes.

61. Which one of the following most closely describes the MRP approach that is used for
components or subassemblies to compensate for variations in lead time?
A. pegging
B. safety stock
C. increased order sizes
D. safety time
E. low-level coding

62. Which of the following lot sizing methods does not attempt to balance ordering (or setup)
and holding costs?
A. economic order quantity
B. economic run size
C. lot-for-lot
D. part-period
E. all of the above

63. When MRP II systems include feedback, they are known as:
A. MRPIII
B. Enterprise resource planning
C. Circular MRP
D. Feasible MRP
E. Closed Loop MRP
64. The multiplication process used by MRP to determine lower level requirements is called:
A. time-phasing
B. pegging
C. netting
D. projecting
E. exploding

65. _______ is choosing how many to order or make.

A. Quantity determination
B. Package sizing
C. Lot sizing
D. Grouping
E. Aggregation

66. Which of the following is not usually necessary in order to have an effective MRP system?
A. a computer and software
B. an accurate bill of materials
C. lot-for-lot ordering
D. an up-to-date master schedule
E. integrity of file data

67. The _________ of ERP makes it valuable as a strategic planning tool.

A. Internet base
B. Rapid Batch capability
C. Employee focus
D. Real-time aspect
E. Database structure

68. A recent effort to expand the scope of production resource planning by involving other
functional areas in the planning process has been:
A. material requirements planning
B. capacity requirements planning
C. manufacturing resources planning
D. Just-In-Time planning
E. multifunctional relationships planning

69. Which statement concerning MRP II is false?

A. It is basically a computerized system.
B. It can handle complex planning and scheduling quickly.
C. It involves other functional areas in the production planning process.
D. It involves capacity planning.
E. It produces a production plan which includes all resources required.
70. Which of these items would be most likely to have dependent demand?
A. Xbox batteries
B. toy trains
C. flowers
D. chocolate chip cookies
E. wrist watches

71. Which of these products would be most likely to have dependent demand?
A. refrigerators
B. automobile engines
C. televisions
D. brownies
E. automobiles

72. Using the product tree shown, determine the following:

(A) the quantity of component K that will be needed to assemble 80 units of P, assuming no on-
hand inventory of any components exists.
(B) the quantity of component K needed to assemble 80 units of P, given on-hand inventory of
30 A's, 50 B's and 20 C's.

73. The following is a list of components required to produce one unit of end item P:
P: 2 A's, 3 B's, 3 C's
A: 5 M's, 2 R's
B: 1 D, 3 N's.
C: 1 T, 4 N's
M: 1 N
Determine the number of N's that will be needed to make 60 P's in each of these cases:
(A) There are currently 10 P's on hand.
(B) On-hand inventory consists of 15 P's, 10A's, 20 B's, 10 C's, 100 N's, 300 T's, and 200 M's.
74. Given the following information, construct a product tree diagram and develop a material
requirements plan that will lead to 400 units of product P being available at the start of week 7.

75. Develop a material requirements plan for end item P and its components, given the tree
below. Assume that all lead times are one week, and that lot-for-lot ordering is used except for
item F, which is ordered in multiples of 400 units.
One hundred units of P should be available at the start of week 4 and at the start of week 8.
Beginning inventories are: 20 P, 100 A, and 200 F.
Scheduled receipts are: 800 F at the start of week 1.

76. Given the following data, construct a material requirements plan which will result in 100
units of Parent #1 (P1) at the beginning of week 6, and 200 units of Parent #2 (P2) at the
beginning of week 8:
77. End item Alpha's product structure tree and inventory information are as follows:

(A) If 50 units of Alpha are to be assembled, how many additional units of S will be needed? All
parts can be ordered using lot-for-lot ordering, except M, which must be ordered in multiples of
40 units. [Hint: You don't need to do an MRP plan.]
(B) An order for 100 units of Alpha is scheduled to be shipped at the start of week 9. When is the
earliest that any particular component must be started so that the order for Alpha will be ready to
ship? [Hint: You don't need to do an MRP plan.]

Refer to this product-tree:

78. If 17 Ps are needed, and no on-hand inventory exists for any items, how many Cs will be
needed?
A. 8
B. 16
C. 136
D. 204
E. 272

79. If 17 Ps are needed, and on-hand inventory consists of 10 As, 15 Bs, 20 Cs, 12 Ms, and 5 Ns,
how many Cs are needed?
A. 48
B. 144
C. 192
D. 212
E. 272
80. If 40 Ps are needed, and on-hand inventory consists of 15 Ps and 10 each of all other
components and subassemblies, how many Cs are needed?
A. 340
B. 350
C. 380
D. 400
E. 590

Bunny Helpers, Inc. has just received an order for 100 Deluxe Easter Baskets, which must be
ready for delivery at the start of week six. An MRP planner has prepared the following table
showing product structure, lead times (orders are lot-for-lot), and quantities on hand:

Each Deluxe Basket contains two dark chocolate truffles and four carved chocolate eggs;
additionally one bottle of Alka-Selzer is included for those who overindulge.

81. What is the net requirement for Dark Chocolate Truffles to fill this order?
A. 100
B. 140
C. 150
D. 180
E. 200

82. When should an order for Carved Chocolate Eggs be released?

A. at the start of week 2
B. at the start of week 3
C. at the start of week 4
D. at the start of week 5
E. at the start of week 6

83. How many Dark Chocolate Eggs should be ordered?

A. 310
B. 450
C. 500
D. 550
E. 600

84. If the firm is using a fixed period lot size of two periods, what is the order size for the first
order?
A. 120
B. 200
C. 280
D. 160
E. 150
85. Which of the following represents an attempt to balance the benefits of stability against the
benefits of responding to new information?
A. safety stock
B. safety time
C. bills of material
D. time fences
E. fixed-period lot sizing

86. Comparing known and expected capacity requirements with projected capacity availability is
the job of _______.
A. planned releases
B. load reports
C. lot sizing
D. work loading
E. time fencing
87. ERP's primary value comes from applications ________.
A. deployment
B. development
C. interfaces
D. integration
E. networking

88. Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, and
60 units in week 5. If a fixed-period, two-period lot-sizing method is used, what will be the
quantity of the first planned receipt?
A. 60 units
B. 120 units
C. 180 units
D. Cannot be determined
E. None of the above

89. Net requirements for component J are as follows: 60 units in week 2, 40 units in week 3, and
60 units in week 5. If a fixed-period, three-period lot-sizing method is used, what will be the
quantity of the first planned receipt?
A. 60
B. 100
C. 160
D. Cannot be determined
E. None of the above