Production and Inventory Management - Master Planning of Resources Questions + Answers
Posted: Sun Apr 03, 2022 4:39 pm
Question 1
Which of the following would typically be a consideration in a distribution requirements planning (DRP) environment?
A. Where to carry safety stock
B. How to monitor forecast error at central warehouse
C. Whether to use safety lead time or safety stock
D. Whether to aggregate distribution forecasts
Answer : A
Question 2
The most appropriate approach for developing forecasts for strategic business planning is:
A. customer inputs.
B. quantitative statistical methods.
C. economic growth models.
D. casual analysis.
Answer : C
Question 3
Key linkages managed by distribution requirements planning within the supply chain include links to:
A. forecasted demand and material requirements planning.
B. logistics systems and demand management.
C. customers only.
D. vendors only.
Answer : B
Question 4
Which of the following items is required for making realistic customer promises?
A. Feasible master schedules
B. Procedures for managing abnormal demand
C. Finished-goods safety stock
D. A sales and operations planning process
Answer : A
Question 5
A key benefit of an effective sales and operations planning (S&OP) process is that it provides a:
A. direct and consistent dialogue between operations and senior management.
B. means to evaluate the feasibility of business plans.
C. procedure for defining product family priorities.
D. statement of production required to meet unconstrained demand.
Answer : A
Question 6
Which of the following costs is most likely to decrease when the number of warehouses in a distribution network increases?
A. Inventory costs
B. Packaging costs
C. Transportation costs
D. Handling costs
Answer : C
Question 7
Rough-cut capacity planning is best used to:
A. assess the load on a work center.
B. evaluate the master production schedule.
C. establish order priorities.
D. determine labor requirements.
Answer : B
Question 8
When quantitative data are being evaluated, a very small bias in a forecast can best be explained by which of the following statements?
A. Positive forecast errors approximately offset negative forecast errors.
B. The absolute values of all forecast errors were approximately equal.
C. The variability of forecast data was skewed.
D. A very small alpha factor was used.
Answer : A
Question 9
Which process converts the sales and operations plan into gross labor hours, floor space, and machine hours?
A. Resource planning
B. Rough cut capacity planning
C. Capacity requirements planning
D. Finite load planning
Answer : A
Question 10
A firm manufactures four product families in a single facility using one production line for each product family. It has selected the hybrid approach to production planning and has specified that there will be no more than four changes in production rates per production line in a year. Resource planning will have to be performed for:
A. each item when there is a change in the production rate for the family.
B. each production line for each month in the production planning horizon.
C. each product family and production line weekly.
D. each product family when there is a change in the production rate for the family.
Answer : D
Question 11
In which of the following environments does demand change from dependent to independent at the raw material level?
A. Finish-to-order
B. Make-to-order
C. Assemble-to-order
D. Make-to-stock
Answer : B
Question 12
Which of the following groups receives the LEAST benefit from extending the demand planning time fence in the master schedule?
A. Manufacturing
B. Shipping
C. Customers
D. Production scheduling
Answer : C
Question 13
Sales has identified an opportunity to develop a new market for a product family and requested an increase in the production plan. Which of the following actions would be most appropriate in this situation?
A. The proposed change should be presented to top management for a decision.
B. The production plans for other product families should be reduced.
C. The sales and operations plan should be regenerated.
D. The request should be rejected.
Answer : A
Question 14
A warehouse has 20,000 orders per year with an average of 10 line items per order. The warehouse experiences 800 backorders per year averaging 5 line items per backorder.
What level of customer service is achieved when the percentage of line items shipped on schedule is used?
A. 96%
B. 97%
C. 98%
D. 99%
Answer : C
Question 15
Sales and Operation Planning's (S&OP) primary objective is:
A. to align operations with the business plan.
B. to create a long-term strategy.
C. to reduce the forecast variance.
D. to finalize the demand plan.
Answer : A
Question 16
Which of the following considerations is valid when selecting a mode of transportation?
A. Financial viability of the supplier
B. Transit time consistency
C. Ownership of equipment
D. Age of equipment
Answer : B
Question 17
Which of the following is typically an output of the master scheduling process?
A. Sales forecasts
B. Resource requirements plans
C. Interplant demands
D. Projected available balances
Answer : D
Question 18
The primary purpose of a pre-sales and operations planning meeting between representatives from different business functions is to:
A. reconcile differences in recommendations.
B. discuss changes in demand for end items.
C. prepare recommendations for the demand planning phase.
D. prepare recommendations for the supply planning phase.
Answer : A
Question 19
Which of the following tradeoffs should be considered to improve the performance of a distribution network?
A. Reduce cost but improve customer service by using full truckload or carload shipments
B. Increase inventory turns but decrease costs by shipping more frequently
C. Improve profit but decrease inventory by not scrapping obsolete product
D. Improve fill rate but decrease inventory turns by adding safety stock
Answer : D
Question 20
Which of the following considerations is most important when selecting forecasting software?
A. Cost of data storage
B. Ability to forecast over multiple planning horizons
C. Ability to forecast capacity requirements
D. Computational speed
Answer : B
Question 21
The question below is based on the following information:
Which of the following distributions would be the central warehouse allocation of 120 units of inventory to district warehouses A, B, and C if the equal run-out method were used?
A. 20 units to A, 53 units to B, 47 units to C
B. 20 units to A, 60 units to B, 40 units to C
C. 20 units to A, 80 units to B, 20 units to C
D. 100 units to A, 0 units to B, 20 units to C
Answer : C
Question 22
The following question is based on the following information:
The master production schedule quantity that should be placed in Period 7 is:
A. 00.
B. 10.
C. 13.
D. 20.
Answer : D
Question 23
In a capacity-constrained situation, which of the following actions is best to take if marketing wants to increase production of a master schedule item?
A. Increase production of the item, but do not make any other changes.
B. Increase production of the item, and decrease production of another item.
C. Increase production of the item, and change the production plan.
D. If the item is within the demand time fence, let the computer make the change automatically.
Answer : B
Question 24
An intensive distribution channel strategy would be most appropriate for which of the following types of product?
A. Special tools
B. Capital equipment
C. Designer clothing
D. Carbonated beverages
Answer : D
Question 25
A tailor shop is shifting its main business from assemble-to-order to make-to-order. The customer order decoupling point will shift:
A. from raw material to WIP.
B. from WIP to raw material.
C. from finished goods to WIP.
D. from WIP to suppliers.
Answer : B
Which of the following would typically be a consideration in a distribution requirements planning (DRP) environment?
A. Where to carry safety stock
B. How to monitor forecast error at central warehouse
C. Whether to use safety lead time or safety stock
D. Whether to aggregate distribution forecasts
Answer : A
Question 2
The most appropriate approach for developing forecasts for strategic business planning is:
A. customer inputs.
B. quantitative statistical methods.
C. economic growth models.
D. casual analysis.
Answer : C
Question 3
Key linkages managed by distribution requirements planning within the supply chain include links to:
A. forecasted demand and material requirements planning.
B. logistics systems and demand management.
C. customers only.
D. vendors only.
Answer : B
Question 4
Which of the following items is required for making realistic customer promises?
A. Feasible master schedules
B. Procedures for managing abnormal demand
C. Finished-goods safety stock
D. A sales and operations planning process
Answer : A
Question 5
A key benefit of an effective sales and operations planning (S&OP) process is that it provides a:
A. direct and consistent dialogue between operations and senior management.
B. means to evaluate the feasibility of business plans.
C. procedure for defining product family priorities.
D. statement of production required to meet unconstrained demand.
Answer : A
Question 6
Which of the following costs is most likely to decrease when the number of warehouses in a distribution network increases?
A. Inventory costs
B. Packaging costs
C. Transportation costs
D. Handling costs
Answer : C
Question 7
Rough-cut capacity planning is best used to:
A. assess the load on a work center.
B. evaluate the master production schedule.
C. establish order priorities.
D. determine labor requirements.
Answer : B
Question 8
When quantitative data are being evaluated, a very small bias in a forecast can best be explained by which of the following statements?
A. Positive forecast errors approximately offset negative forecast errors.
B. The absolute values of all forecast errors were approximately equal.
C. The variability of forecast data was skewed.
D. A very small alpha factor was used.
Answer : A
Question 9
Which process converts the sales and operations plan into gross labor hours, floor space, and machine hours?
A. Resource planning
B. Rough cut capacity planning
C. Capacity requirements planning
D. Finite load planning
Answer : A
Question 10
A firm manufactures four product families in a single facility using one production line for each product family. It has selected the hybrid approach to production planning and has specified that there will be no more than four changes in production rates per production line in a year. Resource planning will have to be performed for:
A. each item when there is a change in the production rate for the family.
B. each production line for each month in the production planning horizon.
C. each product family and production line weekly.
D. each product family when there is a change in the production rate for the family.
Answer : D
Question 11
In which of the following environments does demand change from dependent to independent at the raw material level?
A. Finish-to-order
B. Make-to-order
C. Assemble-to-order
D. Make-to-stock
Answer : B
Question 12
Which of the following groups receives the LEAST benefit from extending the demand planning time fence in the master schedule?
A. Manufacturing
B. Shipping
C. Customers
D. Production scheduling
Answer : C
Question 13
Sales has identified an opportunity to develop a new market for a product family and requested an increase in the production plan. Which of the following actions would be most appropriate in this situation?
A. The proposed change should be presented to top management for a decision.
B. The production plans for other product families should be reduced.
C. The sales and operations plan should be regenerated.
D. The request should be rejected.
Answer : A
Question 14
A warehouse has 20,000 orders per year with an average of 10 line items per order. The warehouse experiences 800 backorders per year averaging 5 line items per backorder.
What level of customer service is achieved when the percentage of line items shipped on schedule is used?
A. 96%
B. 97%
C. 98%
D. 99%
Answer : C
Question 15
Sales and Operation Planning's (S&OP) primary objective is:
A. to align operations with the business plan.
B. to create a long-term strategy.
C. to reduce the forecast variance.
D. to finalize the demand plan.
Answer : A
Question 16
Which of the following considerations is valid when selecting a mode of transportation?
A. Financial viability of the supplier
B. Transit time consistency
C. Ownership of equipment
D. Age of equipment
Answer : B
Question 17
Which of the following is typically an output of the master scheduling process?
A. Sales forecasts
B. Resource requirements plans
C. Interplant demands
D. Projected available balances
Answer : D
Question 18
The primary purpose of a pre-sales and operations planning meeting between representatives from different business functions is to:
A. reconcile differences in recommendations.
B. discuss changes in demand for end items.
C. prepare recommendations for the demand planning phase.
D. prepare recommendations for the supply planning phase.
Answer : A
Question 19
Which of the following tradeoffs should be considered to improve the performance of a distribution network?
A. Reduce cost but improve customer service by using full truckload or carload shipments
B. Increase inventory turns but decrease costs by shipping more frequently
C. Improve profit but decrease inventory by not scrapping obsolete product
D. Improve fill rate but decrease inventory turns by adding safety stock
Answer : D
Question 20
Which of the following considerations is most important when selecting forecasting software?
A. Cost of data storage
B. Ability to forecast over multiple planning horizons
C. Ability to forecast capacity requirements
D. Computational speed
Answer : B
Question 21
The question below is based on the following information:
Which of the following distributions would be the central warehouse allocation of 120 units of inventory to district warehouses A, B, and C if the equal run-out method were used?
A. 20 units to A, 53 units to B, 47 units to C
B. 20 units to A, 60 units to B, 40 units to C
C. 20 units to A, 80 units to B, 20 units to C
D. 100 units to A, 0 units to B, 20 units to C
Answer : C
Question 22
The following question is based on the following information:
The master production schedule quantity that should be placed in Period 7 is:
A. 00.
B. 10.
C. 13.
D. 20.
Answer : D
Question 23
In a capacity-constrained situation, which of the following actions is best to take if marketing wants to increase production of a master schedule item?
A. Increase production of the item, but do not make any other changes.
B. Increase production of the item, and decrease production of another item.
C. Increase production of the item, and change the production plan.
D. If the item is within the demand time fence, let the computer make the change automatically.
Answer : B
Question 24
An intensive distribution channel strategy would be most appropriate for which of the following types of product?
A. Special tools
B. Capital equipment
C. Designer clothing
D. Carbonated beverages
Answer : D
Question 25
A tailor shop is shifting its main business from assemble-to-order to make-to-order. The customer order decoupling point will shift:
A. from raw material to WIP.
B. from WIP to raw material.
C. from finished goods to WIP.
D. from WIP to suppliers.
Answer : B