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QUIZ
MEFB433 - MRP
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True/False

Q1. A component is an item that might go through one or more

operations to be transformed into, or become part of, one or more
parents.

Q2. Demand for the parent product determines demand for the
components.

Q3. A recognition award is assembled from a wood plaque, a stiff

paper certificate, a Plexiglas sheet, and four decorative screws. The
Plexiglas sheet is an example of a parent.

Q4. Material requirements planning (MRP) is a computerized

information system that was developed specifically to help companies
manage dependent demand inventory and schedule replenishment
orders.

Q5. MRP explosion refers to the high degree of acceptance of MRP

systems.

Q6. The bill of materials is a document used to compare price data

from competitive suppliers.

Q7. End items, intermediate items, and subassemblies might be

classified as both parent and component items in inventory.

Q8. A manufacturer of reasonably priced office furniture has many

components that are used in more than one parent; thus, the same
part may appear in the bills of materials for several different products.

Q9. Lot sizing determines the number of setups required and thus
can affect inventory holding costs.
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Q10. Action notices are electronic messages that automatically initiate

an action such as releasing new orders.

Multiple Choice

Q11. An MRP system provides which of the following advantages?

a. Automatic update of the dependent demand and replenishment
schedules of components when parent schedules change
b. Statistical forecast of component demand
c. Smoothing of lumpy demand
d. None of the above

Q12. The key inputs to an MRP include:

a. engineering drawing of the product.
b. process chart.
c. inventory record database.
d. both a and b.

Q13. A component that has one or more parents and no components

is most likely to be a(n):
a. end item.
b. intermediate item.
c. subassembly.
d. purchased item.

Q14. If gross requirements are 100, planned receipts are 120, and
inventory on hand from the previous period is 50, then the
projected on-hand inventory balance:
a. is 270.
b. is 170.
c. is 70.
d. cannot be determined from the data given.

Q15. When the projected on-hand inventory balance falls in the

negative range, then:
a. gross requirements must increase.
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b. the inventory record is incorrect.

c. too much inventory is on hand.
d. the shortage signals it is time for a planned receipt.

Q16. The listed lot-sizing method that best minimizes the inventory
levels is:
a. Economic Order Quantity.
b. Periodic Order Quantity.
c. Lot for Lot.
d. not enough information given.

Q17