Production and Operations Management

121. Buying according to the requirements is called

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying
Correct answer: (B)
Hand to mouth buying

122. Raw Materials and WIP can be classified under

  1. Indirect Material
  2. Direct Material
  3. Finished Material
  4. Standard Parts
Correct answer: (B)
Direct Material

123. ___________________ establishes the overall production, workforce, and inventory levels.

  1. Production activity control
  2. Distribution requirements planning
  3. Master production schedule
  4. Sale and operations planning
Correct answer: (D)
Sale and operations planning

124. The master production schedule requires all of the following input except

  1. Projected inventory levels
  2. Production quantities
  3. Forecasted demand
  4. All of the above are inputs into MSP.
Correct answer: (D)
All of the above are inputs into MSP.

125. In a distribution requirements planning environment, forecasted demand at the plant level is equal to __________________ in the distribution center level.

  1. Scheduled receipts
  2. Planned receipts
  3. Planned orders
  4. None of the above
Correct answer: (C)
Planned orders

126. The difference between a gross material requirements plan (gross MRP) and a net material requirements plan (net MRP) is

  1. The net MRP includes consideration of the inventory on hand, whereas the gross MRP does not.
  2. The gross MRP doesn't take taxes into account, whereas the net MRP includes the tax considerations.
  3. The gross MRP may not be computerized, but the net MRP must be computerized.
  4. The gross MRP includes consideration of the inventory on hand, whereas the net MRP does not.
Correct answer: (A)
The net MRP includes consideration of the inventory on hand, whereas the gross MRP does not.

127. An MRP system that provides feedback to the capacity plan, master production schedule, and production plans is called

  1. System nervousness.
  2. Closed-loop mrp.
  3. Lot-sizing.
  4. Load report.
Correct answer: (B)
Closed-loop mrp.

128. ___________________ determines when specific products will be produced, when specific customer orders will be fulfilled, and what capabilities remain available to satisfy unexpected demand.

  1. Sale and operations planning
  2. Material requirements planning
  3. Distribution requirements planning
  4. Master production schedule
Correct answer: (D)
Master production schedule

129. __________________ is the amount of new orders necessary to support production of the required output in the next higher level in the bill of materials.

  1. Scheduled receipts
  2. Available to promise
  3. Projected ending inventory
  4. Planning horizon
Correct answer: (A)
Scheduled receipts

130. __________________ allows a segment of the master schedule to be designated as "not to be rescheduled."

  1. Pegging
  2. Regenerative MRP
  3. Time fence
  4. System nervousness
Correct answer: (C)
Time fence
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