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Operations Management: Processes and Supply Chains, 12e (Krajewski)
Chapter 11 Resource Planning
1) Material requirements planning (MRP) is a computerized information system developed specifically to
aid in managing dependent demand inventory and scheduling replenishment orders.
2) A parent is any item manufactured from one or more components.
3) Dependent demand for an item occurs because the quantity required for it varies with the production
plans of one or more parents.
4) A component is an item that may go through one or more operations to be transformed into or become
part of one or more parents.
5) If the demand for an independent demand item is continuous and uniform, so will the planned order
releases of its components.
6) Which of the following is not an example of dependent demand items?
A) shoelaces, shoes
B) wheels, car
C) carafes, coffeemakers
D) ice skates, roller skates
7) Any item manufactured from one or more components is a(n):
A) parent.
B) component.
C) intermediate item.
D) purchased item.
8) Under which one of the following circumstances can an MRP system be used to its best advantage?
A) when the item's demand depends only on customer demand
B) when the item's demand is uniform
C) when the item's demand is constant
D) when the item's demand depends on the production plans of its parent(s)
9) In MRP, a(n) ________ is any item manufactured from one or more components.
10) In MRP, a(n) ________ is an item that may go through one or more operations to be transformed into
or become part of one or more parents.
11) ________ is a computerized information system developed specifically to aid in managing dependent-
demand inventory and scheduling replenishment orders.
12) Explain the difference between independent and dependent demand and illustrate your explanation
with an example.
11.2 Master Production Scheduling
1) The master production schedule (MPS) is the part of the material requirements planning that specifies
when components must be ordered or assembled.
2) Available-to-promise inventory is the amount of end items that marketing can promise to customers by
a certain date.
3) The portion of the master production schedule farthest into the future is often frozen to reduce
forecasting requirements.
4) The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned
receipts.
5) The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the
MPS quantities.
6) Gross requirements are the total demand derived from all parent production plans.
7) Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand
inventory is greater than zero in the first period), and subsequently in periods when the MPS quantity is
greater than 0.
Table 11.1
Big Truck Tacos has developed the following forecast of demand and accepted orders for their holiday
tacos as they enter the Taco Festival Season. They enter the planning period with 65 holiday tacos in
inventory as shown in Week 0.
Week
0
1
2
3
4
5
6
7
8
Forecast
70
80
90
100
120
140
170
220
Customer
Orders
80
50
30
10
0
0
0
0
Projected on-
hand inventory
65
MPS
ATP
8) Use Table 11.1 to answer this question. If Big Truck Tacos makes tacos in batches of 20, what should
their MPS entry be for the first week of production?
A) 60
B) 80
C) 100
D) 20
9) Use Table 11.1 to answer this question. After scoring a terrific deal on tortillas, Big Truck Tacos decides
to produce 120 tacos in weeks 1, 2, and 3. If they make tacos in batches of 20, what should their MPS entry
be for the fifth week of production?
A) 60
B) 80
C) 100
D) 120
10) Use Table 11.1 to answer this question. After scoring a terrific deal on tortillas, Big Truck Tacos
decides to produce 120 tacos in weeks 1, 2, and 3. What is their projected on-hand inventory for week 4?
A) 55
B) 65
C) 75
D) 85
11) Use Table 11.1 to answer this question. In week 1 the inventory manager discovers, much to his
horror, that instead of 65 tacos in inventory, they have only 5 tacos. They had already planned to make
exactly what they needed, based on the erroneous inventory number of 65 and they can't alter their week
1 schedule. How many tacos do they need to have on their MPS for the second week of production to
correct their shortfall, fulfill backorders, and move forward through the rest of the production period?
A) 80
B) 140
C) 100
D) 110
Table 11.2
Mutts Amazing Dogs has developed the following demand forecast for The Pitbull, a spicy concoction
graced by pepperjack cheese, serrano, habanero, poblano and jalapeno peppers, onion, and a cilantro-
lime aioli. They enter the planning period with 20 hotdogs in inventory as shown in Week 0. A few
customers have standing orders for hotdogs and they have booked catering events over the next two
months. They buy their hotdogs in packages of ten just like you and me.
Week
0
1
2
3
4
5
6
7
8
Forecast
70
80
90
100
120
140
170
220
Customer
Orders
80
50
30
10
0
0
0
0
Projected on-
hand inventory
20
MPS
ATP
12) Use Table 11.2 to answer this question. What should the MPS quantity be for week 5?
A) 190
B) 120
C) 170
D) 160
13) Use Table 11.2 to answer this question. What is their available to promise inventory for week 4?
A) 30
B) 50
C) 70
D) 90
14) Use Table 11.2 to answer this question. The sales manager realizes that he shifted a decimal point for
week 3; instead of customer orders for 30, they actually have customer orders for 300. "My bad," he says
to no one in particular. The production manager retreats to the sanctity of his office and after
dismembering his sales-manager voodoo doll, sets about making things right. What's the proper MPS
quantity for week 3 now that the orders are straightened out?
A) 280
B) 270
C) 300
D) 290
15) Use Table 11.2 to answer this question. Mutt decides to operate on a level MPS plan for weeks 1
through 4. What MPS quantity brings them into week 5 with the same ATP as if they had adopted a more
traditional approach?
A) 190
B) 150
C) 170
D) 160
16) Operations produces a number of items in one production period. Those items that are not produced
for a specific customer order are ________.
17) ________ is an estimate of the amount of inventory available each week after gross requirements have
been satisfied.
9
18) Complete the following MPS Record
Answer:
10
19) Complete the following MPS Record.
Answer:
11.3 MRP Explosion
1) A materials requirements planning (MRP) explosion occurs when the system is bombarded with too
many orders to schedule at one time.
2) A bill of materials is a record of all the components of an item, the parent-component relationships,
and the usage quantities derived from engineering and process designs.
3) Part commonality tends to increase inventory costs.
4) Gross requirements are the total demand derived from all parent production plans.
5) A bill of materials (BOM) shows all of the components of an item, the parent-component relationships,
usage quantities, and lot size derived from engineering and process designs.
6) An intermediate item must have at least one parent and at least one component.
7) Planned receipts are estimates of the amount of inventory available each week after gross requirements
have been satisfied.
8) For items manufactured in-house, one component of the planned lead time is waiting time.
9) The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule,
but less inventory on hand than the fixed order quantity rule.
10) Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued.
11) MRP II ties MRP to the company's financial system.
12) Which of the following statements about MRP is true?
A) To be classified as a successful MRP user, a company must use either the L4L or POQ rules for lot
sizing.
B) MRP gross requirements for a parent item are equal to the planned order releases of its components.
C) MRP logic is based on the logic of uniform, continuous demand, and item independence.
D) MRP gross requirements for a component depend on the planned order releases of its immediate
parents.
13) Which one of the following is an input to the MRP system?
A) shop-floor schedules
B) financial reports
C) master production schedule
D) purchasing orders
14) If a planned receipt for an item is due in week 6 and the item's lead time is two weeks, in which week
will the corresponding planned order release occur?
A) week 2
B) week 4
C) week 6
D) week 8
15) Which one of the following statements about lot-sizing rules is true?
A) The periodic order quantity (POQ) rule seeks to create inventory remnants.
B) If the POQ rule is used, an item's lot size can vary each time an order is placed.
C) The lot-for-lot (L4L) rule is a special case of the fixed-order quantity (FOQ) rule.
D) All lot-sizing rules seek to minimize inventory levels.
16) Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average
inventory?
A) periodic order quantity (POQ), with P = 2
B) fixed order quantity (FOQ)
C) economic order quantity (EOQ)
D) lot for lot (L4L)
17) Which statement on MRP explosion is best?
A) It calculates the total number of subassemblies, components, and raw materials needed for each parent
item.
B) It calculates the total number of raw materials to be purchased from all suppliers.
C) It calculates the total number of parts to be produced for each parent item.
D) It calculates the total number of parts needed to be produced less the number of parts on hand for
each parent item.
18) Which of the following statements concerning MRP is true?
A) Dependent-demand items tend to experience relatively constant demand rates.
B) MRP systems use independent demands for each component item.
C) Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order
releases to estimate capacity requirements for critical workstations.
D) The most accurate way to forecast dependent demand is to examine past usage rates.
19) Which one of the following is a feature of MRP II, but not available in basic MRP systems?
A) financial projections
B) action notices
C) dispatch lists
D) capacity reporting
20) Which of the following statements about MRP II is best?
A) It is computationally faster than regular MRP.
B) It is limited only to aiding order-launching decisions.
C) It incorporates informal systems through the use of expert systems technology.
D) It provides more extensive information than MRP because it is tied to the company's financial system.
21) Use the following partially completed MRP record to answer the question.
What are the quantities of planned order releases for item ABC for the first five weeks (weeks 1, 2, 3, 4,
and 5)?
A) 30, 0, 60, 0, 145
B) 60, 0, 145, 0, 0
C) 0, 30, 60, 0, 0
D) 30, 0, 60, 145, 0
22) Use the following partially completed MRP record to answer the question.
What are the quantities of planned order releases for item XYZ for the first six weeks (weeks 1, 2, 3, 4, 5,
and 6)?
A) 20, 30, 0, 40, 20, 0
B) 35, 0, 60, 0, 0, 0
C) 5, 30, 0, 40, 20, 0
D) 35, 0, 0, 40, 20, 0
23) Use the following partially completed MRP record to answer the question.
What is the planned order release quantity in week 4?
A) 0 units
B) greater than 0 units but fewer than or equal to 50 units
C) greater than 50 units but fewer than or equal to 100 units
D) greater than 100 units
24) Use the following MRP record to answer the question.
Which one of the statements concerning item LMN is true?
A) The scheduled receipt of 80 units in week 3 should be expedited so that it is finished in week 2.
B) The planned order release quantity in week 3 is 80 units.
C) The planned receipt quantity in week 6 is 30 units.
D) The projected on-hand inventory in week 8 is 70 units.
25) Management wishes to use a POQ lot-sizing rule for an item that experiences an average demand of
30 units per week. If the desired average lot size is 120 units, what should P be?
A) zero or one week
B) two or three weeks
C) four or five weeks
D) more than five weeks
26) Management wishes to use an FOQ lot-sizing rule for an item based on the economic order quantity.
If the annual demand is 1,200 units, the holding cost is $10 per unit per year, and the setup cost is $50 per
lot, which one of the following fixed-order quantities is most appropriate?
A) 90 units
B) 110 units
C) 130 units
D) 150 units
Scenario 11.1
Sunshine Manufacturing produces three products: X, Y, Z. The production of these end items is
controlled by an MRP system. Each end item X is assembled with two components of A and one
component of B. Each end item of Y is assembled with two components of C and one component of A.
End item Z is assembled from one unit of D and one unit of C; D is manufactured from one unit of A; and
C is manufactured from one unit of B.
27) Use the information in Scenario 11.1. Which of the following sequences is an acceptable way to
process the inventory records for components A, B, C, and D?
A) A, B, C, D
B) D, A, B, C
C) B, A, D, C
D) C, B, D, A
28) Use the information in Scenario 11.1. If item C has a manufacturing lead time of two weeks, and a
planned receipt of 65 units is needed in week 4, which of the following statements is true?
A) The planned order release in week 2 for item C is 130 units.
B) The gross requirements for item B in week 4 is 65 units.
C) The gross requirements for item B in week 2 is 130 units.
D) The gross requirements for item B in week 2 is 65 units.
