ISE 4333

Study Guide 2

MATERIAL REQUIREMENT PLANNING

1. Material Requirements Planning (MRP) takes place in the front end systems of the manufacturing
planning and control system? (True/False) False.
2. In a Material Requirements Planning (MRP) system, what does time-phasing of gross requirements
mean? Requirements are stated on a period-by-period basis according to the anticipated future
usage.
3. Front scheduling logic starts each step of the process as late as possible? (True/False) False.
4. A lot-for-lot order policy generates orders for a fixed quantity, independent of actual requirements?
(True/False) False.
5. Processing all Material Requirements Planning (MRP) records in a single computer run is called
___________? Regeneration
6. Which of the following is true about MRP Systems?
A)
based on independent demand
B)
lot sizing is EOQ
C)
demand pattern is random
D)
objective is to meet manufacturing needs
E)
order philosophy is replenishment
7. Which MRP system input element specifies how many and when the firm plans to build each end
item?
A)
Inventory records file
B)
Bills of material
C)
Master production schedule
D)
Capacity planning
E)
none of the above
8. The purposes of a basic MRP system include:
A)
To control inventory levels
B)
To prioritize the need for an item
C)
Plan capacity to load the production system
D)
A and B
E)
B and C
F)
A, B, and C
9. Which of the following is not an advantage of MRP?
A)
Reduced sales price
B)
Reduced inventory
C)
Reduced idle time
D)
MRP is flexible - easy to veer away from the schedule if need arises
E)
Better response to market demand

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10. Which of the following most closely describes net material requirements?
A)
gross requirements - planned order receipts
B)
gross requirements - on-hand + planned order receipts
C)
gross requirements - on-hand - planned order receipts
D)
gross requirements - planned order releases
E)
none of the above
11. The gross requirements of a given component part in an MRP system are determined from:
A)
net requirements + on-hand
B)
net requirements of end item
C)
gross requirements of the immediate part
D)
planned order releases of the end item
E)
planned order releases of the immediate parents
12. Lot-sizing techniques include:
A)
Lot-for-lot
B)
Economic order quantity
C)
Wagner-Whitin Algorithm
D)
Part Period Balancing
E)
A, B, C, and D
13. MRP is used for:
A)
B)
C)
D)
E)

independent demand items.

dependent demand items.
available-to-promise items.
disaggregated items.
pegged items.

14. If lot-for-lot ordering is used, then planned order releases will be equal to:
A)
gross requirements.
B)
projected on hand less safety stock.
C)
projected on hand plus safety stock.
D)
net requirements.
E)
gross requirements less safety stock.
15. Which of the following is not a direct input into MRP?
A)
the master production schedule
B)
bills of materials
C)
the production plan
D)
the capacity plan
E)
inventory records
16. Which of these describes lot sizing? Determining:
A)
planned order releases
B)
net requirements
C)
when to order
D)
how much to order
E)
gross requirements

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Study Guide 2
17. In MRP, planned order receipts must always equal:
A)
scheduled receipts.
B)
planned order releases.
C)
net requirements
D)
gross requirements.
E)
projected on hand.
18. Which is true about scheduled receipts?
A)
They are orders previously placed, and not yet completed or received.
B)
They must be less than the net requirements in any period.
C)
They are included in planned order receipts.
D)
They are included in planned order releases.
E)
They are added to gross requirements to get net requirements.
19. In MRP, the listing of all the subassemblies and components needed to produce a unit of an end
item is called the:
A)
material requirements plan.
B)
master schedule.
C)
bill of materials.
D)
master production schedule.
E)
pegging.
20. In MRP, which one of these would not generally be a factor in determining the net requirements of a
component?
A)
planned order releases
B)
scheduled receipts
C)
projected on hand
D)
gross requirements
E)
none of the above
21. A key goal of MRP is to:
A)
minimize variable cost.
B)
use scheduled receipts only when necessary.
C)
match what is on hand with what is needed to be on hand.
D)
order early to avoid late-order penalties.
E)
order late to avoid inventory carrying cost.
22. Two units of subcomponent Z go into each unit of component Q, and Z doesn't go into anything
other than Q. Z's lead time is one week. Q's lead time is two weeks. Q has a planned order release of
400 units in week 5. As regards Z, therefore, ____________ in week __________ are 800.
A)
net requirements; 5
B)
gross requirements; 5
C)
net requirements; 4
D)
gross requirements; 4
E)
none of the above
23. Product Alpha consists of two units of component X and four units of component Y. Component X
consists of four units of component Y and two units of component Z. Component Y's lead time is two

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Study Guide 2
weeks, there are no units of component Y on hand, and there are no scheduled receipts for
component Y. There are 400 units of component X on hand. Neither X nor Y go into any other item
or subcomponent. If 100 units of Alpha are to be produced beginning in week 4, then an order of
__________ units of component Y will need to be released in week __________.
A)
400; 3
B)
1200; 1
C)
800; 3
D)
400; 2
E)
800; 2
24. Given the following product structures of end items X and Y, how many Cs are needed to make 50Xs
and 100Ys? The number in parenthesis shows the number of parts required to make one parent.
Y

X
A (2)
C (2)

A)
B)
C)
D)
E)

D (1)

B (1)

B (1)

E (2)

E (2)

C (1)

150
200
300
400
500

The product structure of end item X is as follows:

X
B (2)
D (3)

C (1)
E (1)

E (2)

F (2)

E (4)

25. Determine the quantities of B, C, D, E, and F needed to assemble one X.

A)
B=2, C=1, D=3, E=7, F=2
B)
B=2, C=1, D=6, E=15, F=2
C)
B=2, C=1, D=6, E=16, F=2
D)
B=2, C=1, D=6, E=27, F=2
E)
B=2, C=1, D=6, E=28, F=2
26. Determine the quantities of these components that will be required to assemble 10 Xs, taking into
account the quantities on hand of various components:
Component
On Hand Qty

B
4

C
10

D
8

E
60

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Study Guide 2
A)
B)
C)
D)
E)

B=16, C=0, D=52, E=220, F=20

B=16, C=0, D=48, E=176, F=20
B=16, C=0, D=40, E=116, F=0
B=16, C=0, D=40, E=196, F=0
B=16, C=0, D=40, E=116, F=20

27. Lead time for the part is two weeks, and the order quantity is 30. What action should be taken?
Week
Gross Requirements
Projected Available 30
Net Requirements
Planned Order Receipt
Planned Order Release
A)
B)
C)
D)
E)

1
10

2
15

3
10

4
20

One order for 5 should be released in week 3 and one for 20 in week 4.
An order for 30 should be released in week 1.
An order for 30 should be released in week 2.
An order for 30 should be released in week 3.
An order for 30 should be released in week 4.

28. Lead time for the part is two weeks, and the lot size is 100. The projected available at the end of
week 3 is ___, and the order should be released in _______.
Week
Gross Requirements
Schedule Receipts
Projected Available 30
Net Requirements
Planned Order Receipt
Planned Order Release
A)
B)
C)
D)
E)

1
20
10

2
65
100
45

3
40

4
25

80
20
100

100

5 units, week 1.
45 units, week 3.
80 units, week 1.
5 units, week 2.
80 units, week 2.

29. Product X is made of two units of Y and three of Z. Y is made of one unit of A and two units of B. Z is
made of two units of A and four units of C. Lead time for X is one week; Y, two weeks; Z, three
weeks; A, two weeks; B, one week; and C, three weeks.
a. Draw the bill of materials.
b. If 100 units of X are needed in week 10, develop a planning schedule showing when each
item should be ordered and in what quantity.

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Study Guide 2

30. Develop an MRP spreadsheet record for six period using the following parameters for the item:
Period
Gross Requirements
Lead time
Lot size
Safety stock
Inventory on-hand
Scheduled receipt

1
20

2
20

3
20

4
30

5
30

6
30

1 period
40 units
0 units
2 units
40 units in period 1

a. In what periods are there planned order releases? What is the average projected inventory?
b. What happens to the timing, number of planned order releases, and average inventory (for
periods 1 through 6) if 10 units of safety stock are required?
c. What happens to the timing, number of planned order releases, and average inventory (for
periods 1 through 6) if a one-period safety lead time is used instead of the safety stock?

31. The Ajax Bike and Trike Shop produces two basic bikes called A and B. Each period, Paul, the owner,
plans to assemble 10 A bikes and 5 B bikes. Bike A is made of one unit of component part X and one
unit of component part Y. Bike B is made of one unit of component part F and one unit of
subassembly part G. Two units of component part Y and one unit of component part Z are required
to build one subassembly part G, which takes one week. The purchasing lead time of part Y is two
weeks.
It is Monday 7AM of week 1. Paul sees that he has 28 units of part Y in the warehouse, and he is
expecting to receive in the next hour 10 units of part Y and 7 units of part G. Paul does not carry any
safety stock.
a. Suppose lot-for-lot ordering is used for part G and Y. Fill out the MRP records for component
parts G and Y for the next seven periods.

Master Production Schedule

Week
1
2
Product A
10
10
Product B
5
5

Part G
Gross Requirement
Scheduled Receipts
Projected Available Balance
Planned Order Release

3
10
5

4
10
5

5
10
5

6
10
5

7
10
5

Week

Week

Lot-for-lot, LT = 1wk, SS = 0

Part Y

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Study Guide 2
Gross Requirement
Scheduled Receipts
Projected Available Balance
Planned Order Release
Lot-for-lot, LT = 2wks, SS = 0

b. Suppose Paul changes the Safety Stock for part Y to 10 units. Would the MRP system
produce any exception messages?
c. What changes would result in the MRP records after regeneration?

32. The MRP record for Part 1234 as of Monday morning week 1 is as follows:
Part 1234
Gross Requirement
Scheduled Receipts
Projected Available Balance
Planned Order Release

Week

10

1
30
50
30
50

2
20

3
20

4
0

5
45

10

40
50

40

45

Lot size = 50, LT = 2wks

The following changes occurred during week 1, and the transactions were processed:
Actual disbursements from stock during week 1 were only 20 instead of the planned 30.
The schedule receipt for 50 due in week 1 was received on Tuesday, but 10 units were
rejected, so only 40 were actually received into inventory.
The inventory was counted on Thursday and 20 additional pieces were found.
The requirement date for the 45 pieces in week 5 was changed to week 4.
Marketing requested an additional five pieces for samples in week 2.
The requirement for week 6 has been set at 25.
The planner launched the planned order of 50 units.
a. Complete the MRP record for Part 1234 as it would appear on Monday morning week 2.
b. What action(s) are required by the planner on Monday week 2 as a result of transactions
occurring during week 1?

33. Peters Power Tools (PPT) has just received an order for 50 PPT band saws, to be shipped at the
beginning of period 9. Information concerning the saw assembly is given below (the number in
parenthesis shows the number of parts required to make one parent):

Item
Saw
A
B
C

PPT band saw

Lead Time (weeks) Components
2
A (2), B (1), C (3)
1
E (3), D (1)
2
D (2), F (3)
2
E (2), D (2)

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Study Guide 2
D
E
F

1
1
3

a. Draw the product structure diagram.

b. Construct a Gantt chart for the new order using front schedule logic.
c. Construct a Gantt chart for the new order using back schedule logic.

34. Consider the following MRP record for Cactus Cups:

Gross Requirement
Scheduled Receipts
Projected Available Balance
Planned Order Release

Week

1
25

35

10

2
30
40
20

3
5

4
15

15

5
5
15
10

6
10
0

Lot-for-lot, LT = 5wks, SS = 0

Suppose 5 units of the scheduled receipt for 40 units due on Monday of week 2 are scrapped
during week 1, and no scrap ticket is issued. Furthermore, assume this lot is not counted before
it is put away in the stockroom on Monday of week 2, but it is recorded as a receipt of 40 units.
What impact will these actions have on factory operations?

35. The MPC system at the Duckworth Manufacturing Company is run weekly to update the master
production schedule (MPS) and MRP records. At the start of week 1, the MPS for end products A
and B is:
Master Production Schedule
Week
1
2
3
Product A
10
25
Product B
5
20

4
5
20

5
10

6
20

One unit of component C is required to manufacture one unit of either end product A or B.
Purchasing lead time for component C is two weeks. An order quantity of 40 units is used and no
(zero) safety stock is maintained for this item. Inventory balance for component C is 5 units at
the start of week l, and there's an open order (scheduled receipt) for 40 units due to be
delivered at the beginning of week 1.
a. Complete the MRP record for component C as it would appear at the beginning of week 1.
During week 1, the following transactions occurred for component C:
The open order for 40 units due to be received at the start of week 1 was received on
Monday of week 1 with a quantity of 30 (10 units of component C were scrapped on this
order).

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An inventory cycle count during week 1 revealed that five units of component C were
missing. Thus, an inventory adjustment of -5 was processed.
Ten units of component C were actually disbursed (instead of the 15 units planned for
disbursement to produce end products A and B). (The MPS quantity of 5 in week 1 for
product B was canceled due to a customer order cancellation.)
The MPS quantities for week 7 include 15 units for product A and 0 units for product B.
Due to a change in customer order requirements, marketing has requested that the MPS
quantity of 25 units for product A scheduled in week 3 be moved to week 2.
The planner launched the planned order of 40 units.

b. Given this information, complete the MRP record for component C as it would appear on
Monday of week 2.
c. What action(s) are required by the planner on Monday of week 2 as a result of transactions
occurring during week 1?