MGSC 395 FINAL TEST
1. An ERP system revolves around a single comprehensive database that is made available across the entire
organization.: True
2. Companies that fully customize their ERP implementation reap the greatest rewards from such systems since
they can continue to use the same process- es to which all employees are accustomed.: False
3. A firm's existing, older information system is called a "legacy system.": True
4. Material requirements planning (MRP) is a computerized information sys- tem developed specifically to aid
in managing dependent demand inventory and scheduling replenishment orders.: True
5. A materials requirements planning (MRP) explosion occurs when the sys- tem is bombarded with too many
orders to schedule at one time.: False
6. A parent is any item manufactured from one or more components: True
7. Dependent demand for an item occurs because the quantity required for it varies with the production plans of
one or more parents.: True
8. A component is an item that may go through one or more operations to be transformed into or become part of
one or more parents.: True
9. If the demand for an independent demand item is continuous and uniform, so will the planned order releases
of its components.: False
10.A bill of materials is a record of all the components of an item, the par- ent-component relationships, and the
usage quantities derived from engineer- ing and process designs.: True
11.An end item in a BOM is typically both a component and a parent: False
12.Part commonality refers to the degree to which a component has more than one immediate parent.: True
13.Part commonality tends to increase inventory costs.: False
14.Gross requirements are the total demand derived from all parent produc- tion plans.: True
15.A bill of materials (BOM) shows all of the components of an item, the parent—component relationships,
usage quantities, and lot size derived from engineering and process designs.: False
16.An intermediate item must have at least one parent and at least one component: True
17.The master production schedule (MPS) is the part of the material re- quirements planning that specifies
when components must be ordered or assembled.: False
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18.Available-to-promise inventory is the amount of end items that marketing can promise to customers by a
certain date.: True
19.The portion of the master production schedule farthest into the future is often frozen to reduce forecasting
requirements.: False
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20.The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned
receipts.: False
21.The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the
MPS quantities.: True
22.Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand inventory
is greater than zero in the first period), and subsequently in periods when the MPS quantity is greater than 0.:
True
23.Planned receipts are estimates of the amount of inventory available each week after gross requirements
have been satisfied.: False
24.A planned order release indicates when an order for a specified quantity of an item should be issued.: True
25.For items manufactured in-house, one component of the planned lead time is waiting time.: True
26.The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule, but
less inventory on hand than the fixed order quantity rule.: True
27.Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued: False
28.MRP II ties MRP to the company's financial system.: True
29.The process with the least capacity is called a capacity constrained re- source if its output is less than
market demand.: False
30.The bill of resources (BOR) is a record of parent-component relationships and all the required materials,
equipment time, staff, and other resources needed, including the usage quantities.: True
31.A companywide process that cuts across traditional functional areas, business units, geographic
regions, and product lines is a(n):
A) enterprise process.
B) master production scheduling process.
C) kinetic process.
D) full-business process.: A
32.Entering new information in the database of an ERP system is a(n):
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A) data packet.
B) transaction.
C) record.
D) file.: B
33.A front-office module for an ERP system includes:
A) manufacturing.
B) accounting and finance.
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1. An ERP system revolves around a single comprehensive database that is made available across the entire
organization.: True
2. Companies that fully customize their ERP implementation reap the greatest rewards from such systems since
they can continue to use the same process- es to which all employees are accustomed.: False
3. A firm's existing, older information system is called a "legacy system.": True
4. Material requirements planning (MRP) is a computerized information sys- tem developed specifically to aid
in managing dependent demand inventory and scheduling replenishment orders.: True
5. A materials requirements planning (MRP) explosion occurs when the sys- tem is bombarded with too many
orders to schedule at one time.: False
6. A parent is any item manufactured from one or more components: True
7. Dependent demand for an item occurs because the quantity required for it varies with the production plans of
one or more parents.: True
8. A component is an item that may go through one or more operations to be transformed into or become part of
one or more parents.: True
9. If the demand for an independent demand item is continuous and uniform, so will the planned order releases
of its components.: False
10.A bill of materials is a record of all the components of an item, the par- ent-component relationships, and the
usage quantities derived from engineer- ing and process designs.: True
11.An end item in a BOM is typically both a component and a parent: False
12.Part commonality refers to the degree to which a component has more than one immediate parent.: True
13.Part commonality tends to increase inventory costs.: False
14.Gross requirements are the total demand derived from all parent produc- tion plans.: True
15.A bill of materials (BOM) shows all of the components of an item, the parent—component relationships,
usage quantities, and lot size derived from engineering and process designs.: False
16.An intermediate item must have at least one parent and at least one component: True
17.The master production schedule (MPS) is the part of the material re- quirements planning that specifies
when components must be ordered or assembled.: False
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18.Available-to-promise inventory is the amount of end items that marketing can promise to customers by a
certain date.: True
19.The portion of the master production schedule farthest into the future is often frozen to reduce forecasting
requirements.: False
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20.The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned
receipts.: False
21.The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the
MPS quantities.: True
22.Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand inventory
is greater than zero in the first period), and subsequently in periods when the MPS quantity is greater than 0.:
True
23.Planned receipts are estimates of the amount of inventory available each week after gross requirements
have been satisfied.: False
24.A planned order release indicates when an order for a specified quantity of an item should be issued.: True
25.For items manufactured in-house, one component of the planned lead time is waiting time.: True
26.The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule, but
less inventory on hand than the fixed order quantity rule.: True
27.Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued: False
28.MRP II ties MRP to the company's financial system.: True
29.The process with the least capacity is called a capacity constrained re- source if its output is less than
market demand.: False
30.The bill of resources (BOR) is a record of parent-component relationships and all the required materials,
equipment time, staff, and other resources needed, including the usage quantities.: True
31.A companywide process that cuts across traditional functional areas, business units, geographic
regions, and product lines is a(n):
A) enterprise process.
B) master production scheduling process.
C) kinetic process.
D) full-business process.: A
32.Entering new information in the database of an ERP system is a(n):
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A) data packet.
B) transaction.
C) record.
D) file.: B
33.A front-office module for an ERP system includes:
A) manufacturing.
B) accounting and finance.
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