4. MPS quantities should be scheduled so that

a) The MPS quantity for a time period always is equal to the forecast quantity.

b) The ATP is greater than the projected on-hand inventory.

c) The projected on-hand inventory will remain positive.

d) The booked customer orders quantity will be negative.

5. The available-to-promise (ATP) quantity for any period t which has an MPS quantity, other than first period, is equal to: the MPS quantity in period t, minus

a) The projected on-hand inventory in period t.

b) The cumulative total of forecasts from period t up to the period that has the next MPS quantity.

c) The cumulative total of booked customer orders from period t up to the period that has the next MPS quantity.

d) The sum of the forecast and booked customer orders for period t.

6. Which of the following quantities has no effect on the first periods ATP calculation?

a) Current on-hand inventory.

b) Booked customer orders for the first periods.

c) MPS quantity for the first period.

d) Forecasted demand for the first period.

7. Which one of the following is a typical benefit of MRP?

a) A lower number of inventory turns.

b) Faster delivery times to customers.

c) An increase in the number of expeditors

d) An increase in direct labor requirement.

8. Which best defines the gross requirements for a component items

a) The forecast customer demand for the component.

b) The amount of safety stock needed to buffer against uncertainty.

c) The sum of gross requirements for all parents of the components.

d) The total demand for the components derived from all immediate parents.

9. Which 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 items lot size can very 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) Static lot sizing rules seek to reduce inventory levels.

10. Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount 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).

11. Which of the following statements about lot-sizing rules for MRP is true?

a) The periodic order quantity (POQ) rule generates a higher level of average inventory, since it creates inventory remnants.

b) FOQ is a dynamic lot-sizing rule which reduces the amount of inventory, by doing a better job of matching the order quantity to the projected on-hand inventory quantity.

c) The lot for lot rule minimizes inventory investment but maximizes the number of orders placed.

d) In general, static lot sizing rules introduce greater instability into the production process.

12. Which one of the following is the most likely example of dependent demand for an MRP controlled item?

a) Demand for spare parts.

b) Demand directly from customers.

c) Demand from quality control department for destructive testing.

d) Demand from MPS.

13. The underlying logic for level-by-level processing in an MRP system is:

a) Each item in a bill of materials must be processed from the bottom up.

b) Items without safety stock quantities must be processed before items that have safety stocks greater than zero.

c) Items must be processed in order of increasing lead time.

d) All parents of an item must be processed before that item is processed.

14. Which one of the following statements about MRP is true?

a) To be classified as a closed-loop 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 release of its components,

c) MRP logic is based on the logic of uniform, continuous demand, and item independence.

d) MRP gross requirement for a component depend on the planned order releases of its immediate parents.

15. If a planned receipt of a item is due in week 6, and the items lead time is 2 weeks, in which week will the corresponding planned order release occur?

a) Week2.

b) Week 4.

c) Week 6.

d) Week 8.

16. The type of inventory that is used to absorb uncertain rates in demand or supply is called

a) Cycle inventory.

b) Anticipation inventory.

c) Pipeline inventory.

d) Safety stock inventory.

17. Which one of the following factors can create pressure for larger inventories?

a) Transportation cost.

b) Interest or opportunity cost.

c) Insurance premiums.

d) Storage and handling cost.

18. Which one of the following is a reason to have small inventories?

a) To improve customer service.

b) To reduce ordering costs

c) To reduce equipment setup costs

d) To reduce interest expense or opportunity costs.

19. Which one of the following is the primary lever for reducing cycle inventory?

a) Leveling out demand rates.

b) Reducing lead time

c) Reducing the batch size Q

d) Improve forecasting.

20. What is true in explaining ABC analysis?

a) This process divides items into three classes according to their inventory level.

b) Class A items normally have the least dollar usage.

c) Class B and class C account for most of inventory items but not dollar usages.

d) Class C accounts for the largest dollar usage of any class.