MRP

Question 1

MRP

Answer 1

Material requirements planning (MRP)

Question 2

MRP has the managerial objective of

providing

Answer 2

The right part at the right
time” to meet the production
schedules for finished products.

Question 3

MRP provides formal plans for each

Answer 3

part number–sub-assemblies,

components, and raw materials.

Question 4

Independent demands MRP

Answer 4

Finished products (end items)

Question 5

Dependent demands

: MRP

Answer 5

sub-assemblies,

components, and raw materials.

Question 6

MRP is planning for items

Answer 6

with dependent

demands

Question 7

PAB

Answer 7

= Projected Available Balance

Question 8



SR

Answer 8

= Scheduled Receipt

represent the 
total planned usage for the 
item from all 
sources


Question 9

PR =



Answer 9

= Planned Receipt



Question 10


POR =


Answer 10

= Planned Order Release



Question 11

SS =

Answer 11

= Safety Stock requirement



Question 12

LT

Answer 12

Lead Time

Question 13

OH

Answer 13

= On-Hand inventory

Question 14

Lot-for-lot (L4L)

Answer 14

Order as much as

needed

Question 15

Fixed 
order quantity (FOQ)

Answer 15

Order a multiple of a fixed quantity

Question 16

Periodic
order quantity (POQ)

Answer 16

Order for requirements over a fixed number of

periods

Question 17

MRP Technical Issues

Answer 17

Frequency of MRP Processing

Regeneration vs net change

Firm planned orders

Safety stock and safety leadtime

Planning horizon

Master production scheduling vs. MRP

Question 18

Frequency of MRP Processing

Answer 18

Less 
frequent processing results in an out-of
-date picture

More frequent processing increases 
computer costs and may lead to system 
nervousness

Question 19

Regeneration vs Net Change

Answer 19

Recalculating all records and requirements is
called
regeneration

Net change
approach only recalculates those
records that have experienced changes

Question 20

Firm Planned Orders

Answer 20

Regeneration of the MRP records can lead to a 
large number of planned order changes

To avoid this, a planned order can be 
converted to a firm planned order (FPO)

Question 21

Safety Stock and Safety

Leadtime

Answer 21

Safety stock is buffer stock held in addition to the
quantity needed to satisfy gross requirements

Used when quantity uncertainty is the issue

Safety leadtime changes both the release and
due date of shop and/or purchase orders to
provide a margin for error

Used when leadtime uncertainty is the issue

Using safety leadtime is not the same as
increasing leadtime
•
Increasing leadtime changes only the release date

Question 22

Planning Horizon

Answer 22

Planning horizon is the total amount of time
included in MRP calculations

Longer planning horizon increases computational
requirements

Shorter planning horizon may result in less-effective
plans if significant future demand is not visible

At a minimum, the planning horizon should cover the
cumulative lead time for all finished goods items

Question 23

Master Production Scheduling

vs. MRP

Answer 23

Master production scheduling and MRP logics are
similar

The only difference is in determining requirements

In master production scheduling, projected requirements
are determined from demand forecasts and customer
orders

In MRP, GRs are determined from production plans of
parent items

Master production scheduling and MRP can be
performed together or separately

Question 24

Bottom-Up Replanning

Answer 24

Botton-up replanning means using pegging

data to solve material shortage problem

Question 25

Pegging

Answer 25

Pegging relates the gross requirements for
a part to all the planned orders or other
sources of demand that created the
requirements

Question 26

Exception Codes

Answer 26

Define exception codes for situations

that need immediate attentions