Chapter 12: Production

Question 1

A set of tactical and execution level business activities that includes master scheduling, material requirements planning, and some form of production activity control and vendor order management

Answer 1

Planning and control

Question 2

A detailed planning process that tracks production output and matches this output to actual customer orders

Answer 2

Master scheduling

Question 3

5 key pieces of information in a master schedule record

Answer 3

Forecasted demand 
Booked orders 
Projected inventory levels
Production quantities
Units still available to meet customer needs (Available to Promise)

Question 4

In the context of master scheduling, a company’s best estimate of demand in any period

Answer 4

Forecasted demand

Question 5

In the context of master scheduling, confirmed demand for products

Answer 5

Booked orders

Question 6

The amount of product that will be finished and available for sale at the beginning of each week. Drives more detailed planning activities such as material requirements planning

Answer 6

Master production schedule

Question 7

A field in the master schedule record that indicates estimated inventory level at the end of each time period

Answer 7

Projected ending inventory

Question 8

A field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers

Answer 8

Available to promise (ATP)

Question 9

The amount of time the master schedule record or MRP record extends into the future. In general, the longer the production and supplier lead times the longer this must be.

Answer 9

Planning horizon

Question 10

A capacity planning technique that uses the master production schedule to monitor key resource requirements

Answer 10

Rough-cut capacity planning

Question 11

A planning process that translates the master production schedule into planned orders for the actual parts and components needed to produce the master schedule items

Answer 11

Material requirements planning (MRP)

Question 12

Inventory items whose demand levels are tied directly to the production of another item

Answer 12

Dependent demand inventory

Question 13

MRP is based on what three related concepts

Answer 13

The bill of material (BOM)
Backward scheduling
Explosion of the bill of material

Question 14

According to APICS, a listing of all the subassemblies, intermediates, parts, and raw materials that go into a parent assembly showing the quantity of each required to make an assembly

Answer 14

Bill of material (BOM)

Question 15

A record or graphical rendering that shows how the components in the BOM are put together to make the level 0 item

Answer 15

Product structure tree

Question 16

In the context of MRP, the time from when a component is ordered until it arrives and is ready to use

Answer 16

Planning lead time

Question 17

The process of working backward from the master production schedule for a level 0 item to determine the quantity and timing of orders for the various subassemblies and components. Underlying logic used by the MRP

Answer 17

Exploding the BOM

Question 18

6 components of the MRP Record

Answer 18

Gross requirements 
Scheduled receipts 
Projected ending inventory 
Net requirements
Planned receipts 
Planned order releases

Question 19

Total demand for all parts, how many are needed?

Answer 19

Gross requirements

Question 20

Units already on order

Answer 20

Scheduled receipts

Question 21

How many units are you short of demand

Answer 21

Net requirements

Question 22

New orders

Answer 22

Planned receipts

Question 23

The logical linkage between higher and lower level items in the BOM

Answer 23

Parent/child relationship

Question 24

A term used to refer to the observation that any change, even a small one, in the requirements for items at the top of the bill of material can have drastic effects on items further down the bill of material

Answer 24

MRP nervousness

Question 25

Rules used to determine the order in which jobs should be processed when resources are limited and multiple jobs are waiting to be done

Answer 25

Job sequencing rules

Question 26

A time phased planning approach similar to MRP that uses planned orders at the point of demand (customer, warehouse etc.) to determine forecasted demand at the source level (often a plant)

Answer 26

Distribution requirements planning (DRP)