Chapter 12 – MRP and ERP
1. MRP works best if the inventory items have dependent demand.
2. Low level coding represents items less than $18 per unit.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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
11. The bill of materials indicates how much material will be needed to produce the quantities
on a given master production schedule.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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.
Chapter 12 – MRP and ERP
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?
Chapter 12 – MRP and ERP
42. ERP implementation probably won’t require:
43. A computer-based information system designed to handle ordering and scheduling of
dependent-demand inventories is:
Chapter 12 – MRP and ERP
44. The development and application of MRP depended upon two developments: (1) the
recognition of the difference between independent and dependent demand, and (2):
45. The output of MRP is:
Chapter 12 – MRP and ERP
46. Which one of the following is not an input in an MRP system?
47. The MRP input stating which end items are to be produced, when they are needed, and
what quantities are needed, is the:
Chapter 12 – MRP and ERP
48. In an MRP master schedule, the planning horizon is often separated into a series of times
periods called:
49. The MRP input listing the assemblies, subassemblies, parts, and raw materials needed to
produce one unit of finished product is the:
Chapter 12 – MRP and ERP
50. A visual depiction of the subassemblies and components that are needed to produce and/or
assemble a product is called a(n):
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:
Chapter 12 – MRP and ERP
52. Which one of the following most closely describes net material requirements?
53. In MRP, “scheduled receipts” are: