CH 13 - MRP & ERP

Question 1

Dependent demand

Answer 1

Demand for items that are subassemblies or component parts to be used in the production of finished goods.

Question 2

Material requirements planning (MRP)

Answer 2

A methodology that translates master schedule requirements for end items into time-phased requirements for subassemblies, components, and raw materials.

Question 3

Master schedule

Answer 3

states which items to be produced, when and how many.

Question 4

Primary inputs of MRP

Answer 4

1. Master schedule
2. Bill of materials
3. Inventory records

Question 5

Bill of materials

Answer 5

Lists raw materials, parts, and assemblies needed in producing 1 unit

Question 6

Inventory records

Answer 6

Information on the status of each item by time period

Question 7

Gross requirements

Answer 7

Total expected demand for an item or raw material in a time period

Question 8

Scheduled receipts

Answer 8

Open orders schedules to arrive from vendors or elsewhere in the pipeline

Question 9

Projected on hand

Answer 9

Expected amount of inventory that will be on hand at the beginning of each time period

Question 10

Net requirements

Answer 10

Actual amount needed in each time period

Question 11

Pegging

Answer 11

Identifying the parent items that have generated a given set of material requirements for an item

Question 12

Benefits of MRP

Answer 12

1. Low levels of in-process inventories, due to an exact matching of supply to demand.
2. keep track of material requirements.
3. evaluate capacity requirements generated by a given master schedule.
4. A means of allocating production time.
5. easily determine inventory usage by backflushing.

Question 13

Backflushing

Answer 13

Exploding an end item’s BOM to determine the quantities of the components that were used to make the item.

Question 14

ERP

Answer 14

Integration of financial,
manufacturing, and human resources in a single database