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MRP practice questions

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Question 1MRP Fundamentals and the Manufacturing Planning Hierarchy

In the standard manufacturing planning hierarchy, which plan sits immediately above the master production schedule (MPS)?

  1. The shop floor control schedule
  2. The material requirements plan (MRP)
  3. The capacity requirements plan (CRP)
  4. The production plan (aggregate plan) Correct answer.

Explanation

The hierarchy runs from strategic business planning through the aggregate production plan, then the master production schedule, then MRP, then capacity and purchasing execution. The production plan authorizes overall output levels and volumes that the MPS then disaggregates into specific end items.

Question 2MRP Fundamentals and the Manufacturing Planning Hierarchy

What is the primary purpose of the master production schedule within the planning hierarchy?

  1. To calculate the capacity of each work center
  2. To determine the reorder point for purchased components
  3. To set the strategic business goals for the next five years
  4. To state which end items will be produced, in what quantity, and when Correct answer.

Explanation

The MPS disaggregates the aggregate production plan into a time-phased statement of end items, quantities, and due dates. It becomes the driving input that MRP explodes into component-level requirements.

Question 3MRP Fundamentals and the Manufacturing Planning Hierarchy

An MRP system explodes a planned order for 200 units of end item A, which has a bill of material requiring 3 units of component B per unit of A. How many units of B does the explosion generate, before any on-hand or scheduled receipts are netted?

  1. 3
  2. 67
  3. 600 Correct answer.
  4. 200

Explanation

The BOM quantity per assembly multiplies the parent planned order quantity, so 200 × 3 = 600 units of B are required. Netting against on-hand inventory and scheduled receipts happens afterward during the MRP netting step.

Question 4MRP Fundamentals and the Manufacturing Planning Hierarchy

Which input provides MRP with the time-phased quantities of a component that are already on order and expected to arrive?

  1. Safety stock
  2. Scheduled receipts Correct answer.
  3. Low-level codes
  4. Gross requirements

Explanation

Scheduled receipts are open orders with known due dates that will add to available supply. MRP nets them against gross requirements to determine whether a net requirement remains.

Question 5MRP Fundamentals and the Manufacturing Planning Hierarchy

What does the term 'time fence' mean in the context of a master production schedule?

  1. The interval between two consecutive MRP regeneration runs
  2. The maximum quantity a work center can produce in one shift
  3. A boundary inside which changes to the schedule are restricted or require escalation Correct answer.
  4. The lead time required to purchase a raw material

Explanation

A time fence divides the MPS horizon into zones with differing rules for change. Inside the near-term fence, schedule changes are frozen or require management approval because material and capacity are already committed.

Question 6MRP Fundamentals and the Manufacturing Planning Hierarchy

Which planning level typically covers a horizon of roughly one to three years and deals with product families rather than individual end items?

  1. Aggregate production planning Correct answer.
  2. Capacity requirements planning
  3. Dispatch listing
  4. Material requirements planning

Explanation

Aggregate production planning works at the product-family level over a medium-range horizon and sets overall output, inventory, and workforce levels. The MPS then disaggregates it into individual end items.

Question 7MRP Fundamentals and the Manufacturing Planning Hierarchy

Which of the following best describes the role of safety stock in MRP netting?

  1. It is subtracted from scheduled receipts to reduce available supply
  2. It is added to gross requirements as an extra demand each period
  3. It is treated as a required inventory level that must remain after netting Correct answer.
  4. It replaces the need for lead time offsetting

Explanation

In MRP netting, safety stock is held back as a floor on projected available balance, so it effectively increases the net requirement. It protects against uncertainty in demand or supply timing.

Question 8MRP Fundamentals and the Manufacturing Planning Hierarchy

What is the lowest level code assigned to a component in a product structure used for?

  1. Setting the priority of the item on the shop floor
  2. Deciding which supplier to use for the item
  3. Sequencing the BOM explosion so an item is processed only after all its parent items Correct answer.
  4. Determining the item's standard cost

Explanation

Low-level coding ensures each item is exploded at the deepest level at which it appears, so all parent requirements are known before the item's own requirements are calculated. This avoids processing an item before its total demand is accumulated.

Question 9MRP Fundamentals and the Manufacturing Planning Hierarchy

A company runs MRP with a one-week time bucket. Component C has a gross requirement of 150 units in week 6, an on-hand balance of 40, and a scheduled receipt of 30 in week 5. No safety stock is held. What is the net requirement in week 6?

  1. 150
  2. 110
  3. 80 Correct answer.
  4. 40

Explanation

Net requirement equals gross requirement minus available supply: 150 − 40 on hand − 30 scheduled receipt = 80. Both the on-hand balance and the scheduled receipt reduce the quantity that must be newly ordered.

Question 10MRP Fundamentals and the Manufacturing Planning Hierarchy

A planned order for a component must be released in week 4 to arrive in time. The item has a lead time of 3 weeks. In which week must the order be released?

  1. Week 7
  2. Week 1 Correct answer.
  3. Week 3
  4. Week 4

Explanation

Lead time offsetting back-schedules the release date by subtracting the lead time from the due date: 4 − 3 = week 1. The planned order release is what tells purchasing or production to act.

Question 11MRP Fundamentals and the Manufacturing Planning Hierarchy

Which statement correctly distinguishes MRP from MRP II?

  1. MRP II plans only purchased materials while MRP plans only manufactured items
  2. MRP II is a newer name for the same material-only calculation
  3. MRP II operates at the strategic level while MRP operates at the shop floor level
  4. MRP II extends material planning to include capacity, financial, and other resource planning Correct answer.

Explanation

MRP II broadens material requirements planning by integrating capacity planning and financial information so that one plan drives materials, capacity, and money. MRP itself focuses on material quantities and timing.

Question 12MRP Fundamentals and the Manufacturing Planning Hierarchy

What is the key difference between a regenerative MRP run and a net change MRP run?

  1. Regenerative runs daily; net change runs monthly
  2. Regenerative plans only end items; net change plans only components
  3. Regenerative ignores lead times; net change applies them
  4. Regenerative recalculates the entire planning file; net change processes only items affected by changes Correct answer.

Explanation

A regenerative run rebuilds the whole plan, which is thorough but resource-intensive. A net change run reprocesses only items whose records changed, which is faster but depends on accurate change tracking.

Question 13MRP Fundamentals and the Manufacturing Planning Hierarchy

A firm uses lot-for-lot ordering. If the net requirement for an item in a period is 95 units, what planned order quantity does MRP generate?

  1. 95 units Correct answer.
  2. 100 units
  3. Zero, because lot-for-lot defers ordering
  4. A fixed order quantity set in the item master

Explanation

Lot-for-lot orders exactly the net requirement each period, so no residual inventory is carried forward. This minimizes holding cost but may produce many small orders.

Question 14MRP Fundamentals and the Manufacturing Planning Hierarchy

Which of the following is a legitimate reason for a firm to carry safety stock in an MRP environment?

  1. To satisfy the low-level code requirement
  2. To eliminate the need for a master production schedule
  3. To absorb variability in demand or supply lead time Correct answer.
  4. To convert planned orders into firm planned orders automatically

Explanation

Safety stock buffers against uncertainty, such as forecast error or supplier delivery variability. It is a deliberate hedge rather than a computational artifact.

Question 15MRP Fundamentals and the Manufacturing Planning Hierarchy

What is a firm planned order used for in MRP?

  1. To freeze a planned order so MRP will not automatically reschedule or change it Correct answer.
  2. To mark an item as obsolete in the item master
  3. To calculate the capacity required at a work center
  4. To record a confirmed receipt of material into stock

Explanation

A firm planned order overrides the normal automatic replanning, letting a planner lock in a decision. MRP treats it as fixed until the planner changes it, which is useful inside the time fence.

Question 16MRP Fundamentals and the Manufacturing Planning Hierarchy

A component has gross requirements of 300 in week 5. On hand is 100, a scheduled receipt of 50 arrives in week 4, and safety stock of 25 must be maintained. What is the net requirement for week 5?

  1. 225
  2. 175
  3. 150
  4. 125 Correct answer.

Explanation

Net requirement equals gross requirement minus on hand minus scheduled receipts plus the safety stock floor: 300 − 100 − 50 + 25 = 125. Safety stock raises the net requirement because it must remain available after the period.

Question 17MRP Fundamentals and the Manufacturing Planning Hierarchy

Which of the following describes the relationship between the MPS and MRP in a make-to-stock environment?

  1. The MPS states end-item quantities by period and MRP derives component and material requirements from it Correct answer.
  2. The MPS plans capacity while MRP plans demand
  3. The MPS and MRP are independent and share no data
  4. MRP sets end-item quantities and the MPS derives component requirements from it

Explanation

The MPS is the driver: it specifies end items and dates, and MRP explodes those into time-phased component and raw material requirements. The dependency is one-directional from MPS to MRP.

Question 18MRP Fundamentals and the Manufacturing Planning Hierarchy

A planner notices that MRP generated a planned order release in the past. What is the most likely cause?

  1. The safety stock level was set to zero
  2. A requirement exists whose lead time offset falls before the current date Correct answer.
  3. The low-level code was calculated incorrectly
  4. The item master has no lot-sizing rule assigned

Explanation

When a due date is closer than the item's lead time, back-scheduling places the release date in the past, signaling an expedite or lateness condition. Planners must resolve it by expediting, rescheduling, or adjusting the requirement.

Question 19MRP Fundamentals and the Manufacturing Planning Hierarchy

Which element of the planning hierarchy is responsible for validating that the MRP-generated orders can actually be produced with available work center capacity?

  1. Capacity requirements planning Correct answer.
  2. The bill of material
  3. Aggregate production planning
  4. The item master

Explanation

Capacity requirements planning converts planned and released orders into hours by work center and compares them with available capacity. It reveals overloads or underloads that require action before execution.

Question 20MRP Fundamentals and the Manufacturing Planning Hierarchy

An item appears as a component in two different end products, at level 2 under one product and level 3 under the other. What low-level code should it receive?

  1. 0
  2. 3 Correct answer.
  3. 1
  4. 2

Explanation

The low-level code is the deepest level at which the item appears anywhere in the product structure. Using 3 ensures the item is exploded after both parents have contributed their requirements.

Question 21MRP Fundamentals and the Manufacturing Planning Hierarchy

A firm produces to a forecast for a product family but receives a large unexpected customer order that exceeds the forecasted quantity. Which planning response best fits the hierarchy's design?

  1. Recalculate low-level codes before accepting the order
  2. Adjust the master production schedule within its time fences and let MRP replan components Correct answer.
  3. Ignore the order until the next annual planning cycle
  4. Change the strategic business plan and rebuild the entire hierarchy

Explanation

The MPS is the appropriate level for absorbing changes in specific end-item demand, subject to time fence rules. MRP then replans the affected components and materials accordingly.

Question 22MRP Fundamentals and the Manufacturing Planning Hierarchy

A planner observes that projected available balance for a component goes negative in week 8 even though a scheduled receipt exists in week 9. What does MRP most likely do?

  1. Reduce the safety stock to zero to eliminate the negative balance
  2. Ignore the shortage because a receipt exists somewhere in the horizon
  3. Generate a planned order to cover the week 8 shortage, since the week 9 receipt arrives too late Correct answer.
  4. Shift the week 9 receipt earlier automatically without a planned order

Explanation

MRP nets supply against demand period by period, so a receipt in week 9 cannot satisfy a requirement in week 8. It creates a planned order timed to cover the earlier shortage, and the planner may later reschedule the week 9 receipt.

Question 23MRP Fundamentals and the Manufacturing Planning Hierarchy

Which situation would most strongly justify moving from a regenerative MRP run to a net change approach?

  1. The company wants to eliminate the need for a master production schedule
  2. The planning file is very large and full regeneration takes too long to run frequently Correct answer.
  3. The bill of material contains items with multiple low-level codes
  4. The firm wants to stop using safety stock entirely

Explanation

Net change processing is attractive when the item population is large and frequent full regeneration is too costly or slow. It reprocesses only changed items, though it requires reliable change tracking to stay accurate.

Question 24MRP Fundamentals and the Manufacturing Planning Hierarchy

A product has a BOM where end item A needs 2 of B, and B needs 4 of C. There is an on-hand inventory of 30 units of C and no other supply. If 100 units of A are planned, and no safety stock is held, what net requirement for C remains?

  1. 30
  2. 770 Correct answer.
  3. 800
  4. 200

Explanation

Gross requirement for C is 100 × 2 × 4 = 800 units. Netting the 30 on-hand units gives 800 − 30 = 770 units of net requirement.

Question 25MRP Fundamentals and the Manufacturing Planning Hierarchy

Why does the planning hierarchy separate aggregate planning from master scheduling rather than planning every end item directly at the top level?

  1. The separation exists only to satisfy financial reporting rules
  2. Aggregate planning manages overall resource levels at a family level, while the MPS handles the detail and mix of specific end items Correct answer.
  3. Master scheduling cannot use forecast data, so a separate plan is needed
  4. Aggregate planning is legally required before any MPS can be created

Explanation

Aggregate planning sets feasible overall output and resource levels without the burden of item-level detail. The MPS then disaggregates that plan into specific end items, balancing detail against stability at each level.

Question 26MRP Fundamentals and the Manufacturing Planning Hierarchy

In the manufacturing planning hierarchy, which plan sits directly above material requirements planning (MRP) and drives it with end-item quantities and dates?

  1. The capacity requirements plan (CRP)
  2. The sales and operations plan (S&OP)
  3. The master production schedule (MPS) Correct answer.
  4. The rough-cut capacity plan (RCCP)

Explanation

The MPS states which end items are to be produced, in what quantities, and on what dates; MRP then explodes that schedule through the bills of material to plan components. S&OP is an aggregate plan above the MPS, while CRP and RCCP are capacity checks rather than demand inputs to MRP.

Question 27MRP Fundamentals and the Manufacturing Planning Hierarchy

A bill of material shows end item P at level 0, subassembly Q at level 1, and component R at level 2. If the BOM is processed level by level from 0 downward, what is the main reason for this low-level coding discipline?

  1. It guarantees that purchased parts are ordered before manufactured parts.
  2. It prevents the MPS from including items that also appear as components.
  3. It ensures each item is exploded only after all of its parent requirements have been accumulated. Correct answer.
  4. It fixes the lead time of every component at the sum of the levels above it.

Explanation

Low-level coding assigns each item the deepest level at which it appears, so when MRP processes levels from 0 downward, every parent's gross requirements are already known before the child is netted. This avoids processing an item before all of its demand sources have been collected.

Question 28MRP Fundamentals and the Manufacturing Planning Hierarchy

A planner is setting up MRP for a purchased component and must choose between a time-phased order point and a standard MRP netting approach. Which statement best captures the difference in how demand is handled?

  1. Time-phased order point ignores lead time, while standard MRP includes lead time offsetting.
  2. Time-phased order point requires a forecast of independent demand, while standard MRP does not use forecasts at all.
  3. Time-phased order point is used only for end items, while standard MRP is used only for components.
  4. Time-phased order point nets discrete future requirements against projected balance period by period, while standard MRP explodes dependent demand from parent schedules. Correct answer.

Explanation

Both techniques time-phase inventory, but time-phased order point is typically applied to independently demanded items and nets discrete requirements period by period. Standard MRP derives dependent demand by exploding parent schedules through the BOM.

Question 29MRP Fundamentals and the Manufacturing Planning Hierarchy

A company runs MRP and finds that the capacity requirements plan shows insufficient work-center capacity in weeks 7 through 9 to support the planned order releases. According to the planning hierarchy, what is the appropriate next step?

  1. Release the planned orders as generated and let the shop floor resolve the overload.
  2. Ignore the capacity plan because MRP is a material plan, not a capacity plan.
  3. Increase the safety stock for the affected components to absorb the shortfall.
  4. Adjust the MPS or planned orders and re-run MRP so that the capacity and material plans are consistent. Correct answer.

Explanation

Capacity requirements planning exists to test whether the MRP-generated order releases can actually be executed. When CRP shows an overload, the planner must revise the MPS or the planned orders and iterate until material and capacity plans are feasible.

Question 30MRP Fundamentals and the Manufacturing Planning Hierarchy

A firm produces several product families in a flow shop. Demand for the families is stable in total but the mix within each family shifts frequently, and the current MPS is built at the end-item level. Which change to the planning hierarchy would best reduce nervousness in MRP while still controlling the shop?

  1. Eliminate the MPS and drive MRP directly from the sales forecast.
  2. Increase the planning horizon to several years so that mix changes average out.
  3. Master schedule at the family or modular level and let final assembly be scheduled by a separate final assembly schedule. Correct answer.
  4. Move the MPS down to the component level so that every purchased part is scheduled directly.

Explanation

When mix shifts frequently within stable families, master scheduling at the family or module level and using a final assembly schedule for configuration postpones the mix decision. This reduces rescheduling of components and limits MRP nervousness while the shop still receives a controlled schedule.

Question 31Master Production Schedule and Demand Management

In MRP II, the master production schedule (MPS) is best described as which of the following?

  1. A statement of the end items or product options to be completed in each time period Correct answer.
  2. A report of open purchase orders and their expected receipt dates
  3. A summary of actual shipments compared with the annual sales forecast
  4. A list of every component and raw material required to build one unit of a product

Explanation

The MPS states, by period, which end items or product option configurations the company plans to finish. It drives the material requirements plan, which then explodes the bill of material into component needs. It is a plan of finished-item output, not a component list or a purchasing report.

Question 32Master Production Schedule and Demand Management

Which statement correctly distinguishes the production plan from the master production schedule?

  1. The production plan covers only purchased materials, while the MPS covers only manufactured components
  2. The production plan is stated in aggregate product groups, while the MPS is stated in specific end items and dates Correct answer.
  3. The production plan is prepared by purchasing, while the MPS is prepared by the sales department
  4. The production plan is stated in specific end items, while the MPS is stated in aggregate product families

Explanation

The production plan sits at the aggregate level and expresses output in families or groups over a longer horizon. The MPS disaggregates that plan into identifiable end items with specific due periods. This vertical relationship lets the MPS be tested against the aggregate plan for feasibility.

Question 33Master Production Schedule and Demand Management

A company builds a standard product with few options, high volume, and a stable bill of material. Which approach to master scheduling fits best?

  1. Master scheduling with no MPS, relying only on the sales forecast
  2. Master scheduling with a make-to-order project schedule for each customer
  3. Master scheduling at the final assembly level using a planning bill Correct answer.
  4. Master scheduling at the component level with a modular bill of material

Explanation

For high-volume standard products with many option combinations, a planning bill (or percentage bill) lets the master scheduler forecast and schedule at the level of option families. This keeps the MPS at a manageable number of items while still driving component requirements. Building a separate MPS item for every combination would produce an unmanageable schedule.

Question 34Master Production Schedule and Demand Management

In a time-phased MPS record, projected available balance for a period equals the prior period's projected balance plus scheduled receipts and MPS receipts, minus which quantity?

  1. The gross requirement for that period Correct answer.
  2. The open order quantity from purchasing
  3. The safety stock target for the item
  4. The cumulative forecast error for the year

Explanation

The projected available balance rolls forward period by period: starting balance plus receipts minus gross requirements. Gross requirements for the period are the demand that must be covered. Forecast error and safety stock targets are inputs to planning, not quantities subtracted in this roll-forward.

Question 35Master Production Schedule and Demand Management

Why is available-to-promise (ATP) used in master scheduling?

  1. To determine the economic order quantity for each purchased component
  2. To calculate the total capacity available on the bottleneck work center
  3. To measure the percentage of orders shipped complete and on time
  4. To identify the quantity of uncommitted inventory that can still be promised to new customer orders Correct answer.

Explanation

ATP shows, for the first period and for periods with new MPS receipts, how much of the scheduled output is not yet committed to customer orders. Sales uses it to promise delivery dates without overcommitting supply. It is a commitment measure, not a delivery performance or capacity measure.

Question 36Master Production Schedule and Demand Management

A firm has 60 units on hand and no scheduled receipts. Customer orders are 40 in week 1 and 30 in week 2; the MPS shows a receipt of 100 in week 2. What is ATP for week 1?

  1. 120
  2. 100
  3. 20 Correct answer.
  4. 60

Explanation

For the first period, ATP equals on-hand inventory plus any MPS receipts in that period minus customer orders due before the next MPS receipt. Here it is 60 + 0 − 40 = 20. The week-2 MPS receipt is not included because the next receipt defines the boundary.

Question 37Master Production Schedule and Demand Management

During rough-cut capacity planning, a master scheduler compares MPS quantities with which type of capacity data?

  1. Actual machine downtime records for the past year
  2. Capacity of a few critical or bottleneck resources Correct answer.
  3. Detailed work-center hours from every routing operation
  4. The number of direct labor employees on the payroll

Explanation

Rough-cut capacity planning tests the MPS against the capacity of bottleneck or critical resources, often using a resource profile for key work centers. It is a fast check at the master schedule level. Detailed routing hours belong to capacity requirements planning at the MRP level.

Question 38Master Production Schedule and Demand Management

Demand management in an MRP II system includes which set of activities?

  1. Only the receipt and processing of customer purchase orders
  2. Forecasting, order entry, order promising, and coordinating demand with the production plan Correct answer.
  3. Only statistical forecasting of independent demand
  4. Only the scheduling of shop-floor work orders

Explanation

Demand management covers forecasting, taking and promising customer orders, and communicating demand so it can be reconciled with the production plan. It is broader than forecasting alone or order entry alone. Shop-floor scheduling is an execution activity, not demand management.

Question 39Master Production Schedule and Demand Management

Which demand pattern is best forecast using a time-series method such as exponential smoothing rather than a causal model?

  1. Demand with a stable historical pattern and no strong external driver Correct answer.
  2. Demand determined by a single large customer's contract volume
  3. Demand for a new product with no sales history and a known launch campaign
  4. Demand driven mainly by a known economic index published monthly

Explanation

Time-series methods extrapolate from the item's own history, so they suit items whose past pattern is a reasonable guide to the future. Causal models are preferred when an identifiable external variable drives demand. New products and contract-driven items require judgment or causal inputs instead.

Question 40Master Production Schedule and Demand Management

A planner uses a forecast plus a safety stock buffer to set MPS quantities for a make-to-stock item. What is the main purpose of the safety stock in this context?

  1. To guarantee that the MPS equals the sales forecast each period
  2. To eliminate the need for available-to-promise calculations
  3. To replace the need for a bill of material
  4. To cover forecast error and demand variability between replenishment periods Correct answer.

Explanation

Safety stock absorbs the variability between forecast and actual demand, protecting service level when demand exceeds the plan. It is sized from forecast error and desired service level. It does not remove the need for a bill of material or for ATP, and it deliberately makes the MPS differ from the raw forecast.

Question 41Master Production Schedule and Demand Management

Which characteristic indicates that an item should be master scheduled rather than planned only by MRP?

  1. It is a low-cost fastener used in many products
  2. It is a component whose demand depends entirely on parent items
  3. It is an end item sold to customers or a major assembly with independent demand Correct answer.
  4. It is a raw material purchased in bulk against a blanket order

Explanation

Master scheduling applies to items with independent demand, typically end items, option families, or major modules that customers order. Components whose demand is derived from parents are planned by MRP after the MPS is exploded. Low-cost common parts and bulk raw materials are normally MRP-planned.

Question 42Master Production Schedule and Demand Management

Which statement about the planning horizon of an MPS is correct?

  1. It should be shorter than the lead time of purchased components
  2. It should cover at least the cumulative lead time of the longest end item Correct answer.
  3. It should always equal the company's fiscal year regardless of lead times
  4. It should cover exactly one production period

Explanation

The MPS horizon must extend at least as far as the cumulative lead time needed to obtain materials, make components, and assemble the end item. Otherwise the plan cannot trigger procurement in time. A horizon shorter than lead time makes the schedule infeasible.

Question 43Master Production Schedule and Demand Management

A master scheduler freezes the near-term portion of the MPS. What is the primary reason for this practice?

  1. To prevent the sales department from ever changing customer orders
  2. To reduce the number of end items in the bill of material
  3. To eliminate the need for capacity planning in later periods
  4. To allow stable execution of released orders and avoid disrupting committed work Correct answer.

Explanation

Freezing the near-term schedule gives manufacturing a stable window in which released orders and material commitments can be executed. Changes inside the frozen zone are exceptions requiring management approval. The far-term portion remains flexible for replanning.

Question 44Master Production Schedule and Demand Management

Demand for an item shows a consistent upward trend over the last twelve months. Which limitation of simple exponential smoothing matters most here?

  1. It always overstates demand when a trend is present
  2. It cannot be used with monthly data
  3. It lags behind a sustained trend because it responds only to the level Correct answer.
  4. It requires a bill of material to compute the forecast

Explanation

Simple exponential smoothing tracks a level and reacts to the most recent error, so it systematically lags a sustained trend. Trend-adjusted versions such as Holt's method add a trend component. The method is not restricted to monthly data and does not require a bill of material.

Question 45Master Production Schedule and Demand Management

In an assemble-to-order environment, which item is most commonly the master scheduled item?

  1. The raw steel purchased for the frame
  2. The individual bolts used in final assembly
  3. A standard subassembly or module built ahead of the customer order Correct answer.
  4. The finished product configured for a specific customer

Explanation

Assemble-to-order firms build standard modules or subassemblies in advance and configure the final product when the order arrives. The MPS therefore typically schedules those modules rather than fully configured end items. Raw materials and fasteners are MRP-planned dependent items.

Question 46Master Production Schedule and Demand Management

A firm's MPS shows a planned receipt of 200 units in week 3. Customer orders already booked are 150 in week 2 and 80 in week 3. What does ATP for week 3 represent?

  1. The 150 units ordered in week 2, carried forward as available supply
  2. 200 minus the 80 units due in week 3, representing uncommitted supply in that period Correct answer.
  3. 200 minus both the 150 and 80 units, because all prior orders reduce later ATP
  4. The entire 200 units, because no orders are due in week 3 before the receipt

Explanation

When a new MPS receipt occurs, ATP for that period equals the receipt minus customer orders due from that period until the next MPS receipt. Here no later receipt is given, so it is 200 − 80 = 120. Orders before the receipt period were already consumed in the earlier ATP calculation.

Question 47Master Production Schedule and Demand Management

Which situation most clearly calls for a planning bill of material rather than a standard bill of material for master scheduling?

  1. A custom project built once for a single customer
  2. A purchased raw material used in several products
  3. A single product with no options and a fixed design
  4. A product offered in many option combinations that are forecast by option family Correct answer.

Explanation

A planning bill (percentage bill) represents a typical mix of options so the master scheduler can forecast and schedule at the family level rather than for every combination. It simplifies the MPS when option variety is high. A single fixed product needs no such device, and projects and raw materials are handled differently.

Question 48Master Production Schedule and Demand Management

What is the effect of a poor forecast on the MPS when safety stock is set too low?

  1. Shortages and expediting occur because the buffer cannot cover the error Correct answer.
  2. Capacity requirements planning is no longer needed
  3. The MPS absorbs the error without any effect on inventory or service
  4. The bill of material is automatically revised to reflect actual demand

Explanation

Safety stock exists to absorb forecast error. If the buffer is too small, actual demand above forecast consumes inventory and triggers shortages and expediting. The MPS must then be revised, and capacity replanned, to recover.

Question 49Master Production Schedule and Demand Management

Which is a valid input to the master production schedule?

  1. The detailed routing hours for each operation
  2. The aggregate production plan, the forecast, and customer orders Correct answer.
  3. The scrap rate of the final assembly line
  4. The vendor rating for each purchased component

Explanation

The MPS is built from the production plan, demand forecasts, and actual customer orders, subject to capacity checks. Routing hours belong to capacity requirements planning. Scrap rates and vendor ratings affect quantities and supplier performance but are not direct MPS inputs.

Question 50Master Production Schedule and Demand Management

A planner notices that the MPS for a family exceeds the demonstrated capacity of the bottleneck work center in weeks 4 through 6. What is the most appropriate response?

  1. Cancel all customer orders in weeks 4 through 6
  2. Release the MPS unchanged and let the shop floor resolve the overload
  3. Reduce the bill of material to lower the component count
  4. Revise the MPS by leveling load, using overtime, or shifting output to later periods Correct answer.

Explanation

Rough-cut capacity planning exists to catch such overloads before release. The scheduler should adjust the MPS through leveling, overtime, subcontracting, or shifting quantities to feasible periods. Releasing an infeasible schedule pushes the problem to execution.