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Answer # 1 : Correct Answer is: C

Inventory turns ratio measures how effectivelyinventories are being used. It is calculated bydividing annual cost of goods sold by average inventory in dollars. (Introduction to Materials Management, Chapter 1).

Answer # 2 : Correct Answer is: B

Process specifications describe the steps needed to make an end product. -They.are usually printed on a routing sheet or kept in the database for online access. (Introduction to Materials Management, Chapter 1)


A bill of materials contains all the components used in the manufacture of end items. In addition, the subassemblies at various stages of manufacture are described. Labor is defined in the touting generally in standard hours and safety stock is not generally maintained on the bill of materials. (Introduction to Materials Management, Chapter 1)

Answer # 4 : Correct Answer is: D

Capacity planning is considered part of themanufacturing process. (Introduction to MaterialManagement, Chapter 1)

Answer # 5 : Correct Answer is: A

Physical supply/distribution is involved with the movement of goods from the supplier to the beginning of production, and from the end of production to the final customers. (Introduction to Material Management, Chapter 1)


While strategic plans do provide for manufacturing sales and new product plans, they really provide the overall direction for the company. The result is a statement of goals and objectives for 2-5 years and sometimes 10. (Introduction to Materials Management, Chapter 2)


Production plans are generally monthly statements of shipments, production and inventory (or backlog) broken down by product families, not end items. (Introduction to Materials Management, Chapter 2)


The MPS has more detail than the production plan. The MPS should add up to equal the production plan families. (Introduction to Materials Management, Chapter 2.)


Closed loop MRP systems operate from the top down with feedback through the system. These feedback mechanisms allow changes to occur in the top level planning. (Introduction to Materials Management, Chapter 2)


Short term capacity can be increased by overtimeinventory or subcontract. often hiring qualified people takes much longer than the other three options.(Introduction to Materials Management, Chapter 2)


The Chase strategy means production will vary withdemand (inventory stays level). The Level strategy establishes production at the average demand. Fluctuations in demand are absorbed by inventory. third strategy is subcontracting. Production is at the minimum demand level. Variations in the demand level are absorbed by subcontracting production. (Introduction to Materials Management, Chapter 2.)


The calculation would be as follows:

4000 units divided by 40 work days = 100units/day. (Introduction to Materials Management,

Chapter 2.)


While the MPS can be used for many purposes, it is primarily a tool for use by manufacturing and sales. (Introduction to Materials Management, Chapter 3)


The production plan, forecasts and capacityconstraints are all inputs to the MPS. While costs are nice to have, they are not a necessary input.(Introduction to Materials Management, Chapter 3)


The master scheduler, when developing the MPS, must make sure labor, material, equipment, and inventory are being used efficiently to maintain high levels of customer service. Efficient final assembly would be developed by a final assembly schdedule. (Introduction to Materials Management, Chapter 3)


Rough cut capacity planning is concerned with makingcertain critical resources are available at thepreliminary MPS stage before committing to theschedule. Critical resources are bottleneck operations (not every work center), labor, and materials which may be scarce or have long lead times. (Inroduction to Materials Management, Chapter 3)


Consumer products are generally considered make to stock. There are a few standard items assembled from many components. The MPS is a schedule of finished end items. (Introduction to Materials Management, Chapter 3.)


Make to order. Companies make many end items from a small number of components. The schedule is developed from actual customer orders. (Introduction to Materials Management, Chapter 3.)


Final Assembly Scheduling occurs only after thecustomer order is received. The FAS is the actualbuild schedule to ensure the customers get what they want. Generally, FAS occurs when there are a variety of options for the customer to order. (Introduction to Materials Management, Chapter 3.)


The planning horizon should be equal to the longest cumulative lead time to purchase components and manufacture. This allows visibility to plan. (Introduction to Materials Management, Chapter 3.)


Make to stock companies ship customers orders from finished goods. Make to order companies ship from available capacity. (Introduction to Materials Management, Chapter 3.)


Available to promise is the part of inventory and planned production which is available to be promised to customers for delivery. It is calculated by adding scheduled receipts to the beginning inventory and subtracting actual orders scheduled before the next scheduled receipt. (Introduction to Materials Management, Chapter 3.)


The order for 60 can be accepted for week 3, as 70 are available - 20 from week 1 and 50 from week 3. (Introduction to Materials Management, Chapter 3.)


Demand calculated from present demand would be dependent demand. Its demand is dependent upon a higher level assembly. (Introduction to Material

Management, Chapter 4.)


Dependent demand is calculated based on demand for higher level assemblies. Forecasted demand is independent. (Introduction to Material Management, Chapter 4.)


The two major objectives of MRP are to:

l.) Calculate the material requirements based on demand and on hand inventory and

2.) keep order priorities current as business needs change. While MRP does calculate projected inventory, it is not its major objective. (Introduction to Materials Management, Chapter 4.)


Capacity planning is not an input to MRP. In fact, MRP assumes infinite capacity is available in its calculation. (Introduction to Materials Management, Chapter 4.)


Part A and Part C would be considered parents since they have components attached. (Introduction to Materials Management, Chapter 4.)


For 100 A's the product will need 200 C’s. Because 3 E’s go into each C, 600 E's will be required. (Introduction to Materials Management, Chapter 4.)


Planning bills are an artifical grouping ofcomponents established for planning purposes. They are used to simplfy forecasting and scheduling. They are not buildable products. (Introduction to Materials Management, Chapter 4.)


A where-used report provides a list of all parents Where a component is used. It is useful for working more component changes. (Introduction to Materials Management, Chapter 4.)


A pegging report is used to trace the origin of demandfor a component. It shows only the parents for which demand exists, unlike the where-used report which shows every parent on which a component is used. (Introduction to Materials Management, Chapter 4.)


Capacity Planning uses the routing file to determine the load on the work centers. (Introduction to Materials Management, Chapter 4.)


The correct answer is D).

Net requirements are calculated by grossrequirements - scheduled receipts - availableinventory. (Introduction to Materials Management,Chapter 4.)


The low level code tells the MRP system the lowest level in which the part resides. The system uses this information to determine when to total all the requirements for a component. The end item is the -0-level. (Introduction to Materials Management, Chapter 4.)

Question #: 145

Subject Area: Supply Chain Management

A firm planned order is used to:

A) Freeze the planned order against changes in quantity and time.B) Convert the planned order to a scheduled receipt.C) Simulate the projected inventory balance.D Manipulate the data and quantity of the customer order.

Correct Answer is: A

The correct answer is A).

Firm planned orders are used by planners when it is necessary to "freeze" the planned order. This might be necessary due to material shortages or capacity problems. (e.g. strikes) (Introduction to Materials Managament, Chapter 4.)

Question #: 146


All of the following conditions will trigger anexception message except:

A) Changes in timing of a scheduled receipt.B) Changes in the inventory on hand balance due to cycle count

adjustment.C) Changes in the forecast.D) Changes in the assigned planner.

Correct Answer is: D


All of the conditions will trigger an exceptionmessage except for changing the planner assigment(number). This will cause the reports to printdifferently. Any records which cause a change in the gross requirements, inventory or scheduled receipts, will trigger an exception message. (Introduction to Materials Mangement, Chapter 4)

Question #: 147


Of the following choices, which would be the preferred method to minimize system nervousness?

A) Increase the order quantities.B) Increase the lead time.C) Use firm planned orders.D) Ignore the exception messages.

Correct Answer is: C

The correct answer is C).

Firm planned orders will reduce system nervousness, especially, inside the manufacturing lead time. The planner could ignore the exception messages, however, this could become a dangerous practice. (Introduction to Materials Management, Chapter 4)

Question #: 148


Available capacity can be best described as:

A) The ability of a resource to produce a quantity of output for a particular period.

B) The amount of resource needed to produce the necessary output for a specified time period.

C) The amount of released work to a facility during a specified time period.D) The amount of load on a work center to produce the output necessary.



Available capacity measures the ability of a resource(eg. machine, plant, etc.) to produce output (eg. parts.) for a specified time frame (eg. hour, day, week, month, etc.) Answer B defines the required capacity, while answer C defines the load.

(Introduction to Materials Management, Chapter 5)

Question #: 149


Capacity requirements planning (CRP) is concerned with which of the following?

I. Labor hours for a product family. II. Individual orders and individual work centers.III. Calculating work center loads. IV. Validating the capacity for the master production schedule.

A) I and II.B) I and III.C) II and III.D) III and IV.



CRP is concerned with very detailed scheduling for individual orders at each work center to calulate work center loads. Resource planning is concerned with checking the resource available for product families while rough cut capacity planning validates the MPS prior to running the schedule. (Introduction to Materials Management, Chapter 5)

Question #: 150

Subject Area: Supply Chain Managernent

which of the following best decribes a routing?

A) The path materials follow from beginning to end.B) The path work follows from work center to work center as it is

completed.C) The path information transactions follow to be completed.D) The critical ratio calculated to determine whether jobs are on schedule.

Question #: 151


Which of the following will affect available capacity?

I) Product specificationsII) Product mix

III) Quantity of customer orderIV) Work pace

A) I, II, and III.B) I, III and IV.C) II, III and IV.D) I, II and III.

Question #: 152


Sometimes a common unit of measure is not available for use in measuring output. In these cases, what measure would be used?

A) Machine speedB) Number of assembliesC) Standard timeD) Acceptable quality parts



Standard time measured as labor hours can be used as the common measure of output and work content.It can be usedfor loading and scheduling. (Introduction to Materials Management, Chapter 5)

Question #: 153


Available capacity can be determined two ways:measurement and calculation. Measured capacity isdetermined by which of the following methods?

A) Historical dataB) Available timeC) Machine utilizationD) Machine efficiency



Measured capacity is based on historical data, that is, what the machine or operator has produced in the past. (Introduction to Materials Management, Chapter 5)

Question #: 154


A work center has 4 machines operating 6 days for 8 hours per day. What is the available time?

A) 24 hoursB) 32 hoursC) 48 hoursD) 192 hours

Correct Answer is. D


Available time is the total number of hours awork center can be used. Therefore, 8x6x4 = 192 hours

Question #: 155


A work center has 4 machines available 8 hours per day for 5 days per week. During the week, they produced for 128 hours. The utilization is:

A) 70%B) 75%C) 80%D) 85%



Utilization is equal to hours actually workeddivided by available hours. In this example, there are 4 machines x 5 days x 8 hours = 160 available hours. For 128 hours of actual work divided by 160

available hours = 80% utilization. (Introduction to Materials Management, Chapter 5)

Question #: 156


A work center has 4 machines available for 8 hours per day, 5 days per week. The work center is utilized 100 hours but produces 120 hours of standard work. The efficiency of the work center is:

A) 50%B) 62.5%C) 75%D) 120%



Efficiency equals standard hours of work produced divided by hours actually worked x 100%. For this example, 120 standard hours of work was produced divided by 100 hours of actual work = 1.2 x 100% 120%. (Introduction to Materials Management, Chapter 5)

Question #: 157

Subject Area: Supply Chain M~gement

A work center has an order to process 500 units of part 1468. It takes .5 hours to setup and 3 minutes for each piece to be run. What is the standard time to run the order?

A) 25 hoursB) 25.5 hoursC) 30 hoursD) 35 hours

Correct Answer is: B

The correct answer is B).Required time equals setup time and run time. For this example, the required time equals 30 mins (.5 hours) set up time plus (500 pieces x 3 @n./piece) run

time = 1530 min. = 25.5 hours. (Introduction to Materials Management, Chapter 5)

Question #: 158


Which of the following best describes the term "load"?

A) Sum of the required times for all actual orders to be run at a work center for a specified time frame.

B) Sum of a required times for all planned orders to be run at a work center for a specified time frame.

C) Sum of the required times for all planned and actual orders to be run at a work center for a specified time period.

D) Sum of the required times for all forecasted orders to be run at the work center for a specified time period.



The load on a workcenter is calculated by adding the required times for all planned and actual orders to be run at a work center for a specified time period. (Introduction to Materials Management, Chapter 5)

Question #: 159


In order to back schedule, which of the followinginformation is necessary?

I. Quantity and due datesII. Bill of materials sequenceIII. Setup and run times for each operationIV. Queue, wait, and move times

A) I, II, and III.B) I, III, and IV.C) II, III, and IV.

D) I, II, and IV.


The correct answer is B).

The bill of materials sequence is not needed inorder to backward schedule. Backward schedulinginvolves machine operation sequence as well as move, queue, and wait times. The quantity would directly impact the time taken at each work center.(Introduction to Materials Management, Chapter 5)

Question #: 160


Production activity control can be best described as a:

A) Planning system.B) Execution system.C) Scheduling system.D) Ordering system.



The production activity control system isresponsible for executing the materials requirement plan and the master production schedule. (Introduction to Materials Management, Chapter 6)

Question #: 161


Dispatching can be best described as:

A) Routing the factory orders.B) Developing the work instructions.C) Releasing orders to the shop floor.D) Placing purchase orders with suppliers.


The correct answer is C).Dispatching is the function of releasing orders to the shop floor based on the materials requirements plan priorities. (Introduction to Materials Management, Chapter 6)

Question #: 162


In a certain manufacturing environment, routings are fixed, and work centers are arranged in the order of the routings. The production at each work center takes a similar amount of time. This would describe:

A) Project manufacturing.B) Intermittent manufacturing.C) Flow manufacturing.D) Specialty manufacturing.



In a flow manufacturing equipment, routings aregenerally fixed with work centers arranged according to the flow. (Introduction to Materials Management, Chapter 6)

Question #: 163


In a certain manufacturing environment, flow of work is varied, workers must be flexible and throughput times are long. This describes:

A) Project manufacturing.B) Intermittent manufacturing.C) Flow manufacturing.D) Specialty manufacturing.



With intermittent manufacturing, the flow of work is varied, depending on the design. This causes the work flow to be unbalanced.

Machinery and workers need to be flexible and are generally grouped together by function. Throughput times are generally long depending on the work which needs to be done at each work center. As a result, scheduling is very complex. The capacity needed depends on the mix of products moving through the various work centers. (Introduction to Materials Management, Chapter 6)

Question #: 164


All of the following are part of manufacturing lead time except:

A) Queue time.B) Wait time.C) Move time.D) Purchasing time.



Purchasing time is part of the overall lead time of a product, however, manufacturing lead time includes queue time, setup time, run time, wait time and move time. (Introduction to Materials Management, Chapter 6)

Question #: 165


Of all the times associated with manufacturing lead times, which generally takes the most time in intermittent manufacturing?

A) Run timeB) Setup timeC) Queue timeD) Move time



Queue time usually accounts for 85%-95% of total lead time. As a result, it is critical that production control aggressively manages the queue time.

(Introduction to Materials Management, Chapter 6)

Question #: 166


Operations are scheduled from the date the order is received. This would best describe:

A) Backward scheduling.B) Master scheduling.C) Capacity scheduling.D) Forward scheduling.



Forward scheduling begins when an order is received. The due date for the customer would be calculated based on material purchases and operation scheduling. It is used for developing promise dates for the customer, or determing whether a late order can be delivered on time. (Introduction to Materials Management, Chapter 6).

Question #: 167


The last operation is scheduled for completion on the due date. Other previous operations are scheduled so the due date can be met. This describes:

A) Backward scheduling.B) Master scheduling.C) Capacity scheduling.D) Forward scheduling.



Backward scheduling schedules the last operation on the routing so the completion date is the due date. Allprevious operations are scheduled back from the last operation.

The benefit of backward scheduling is that it schedules back from the customer due date. However, because there is no slack time, on time delivery and service may suffer. (Introduction to Materials Management, Chapter 6.)

Question #: 168


When the next operation is allowed to begin before the entire lot is completed on the previous operation, this is called:

A) Operation splitting.B) Operation overlapping.C) Work center overlapping.D) Work center splitting.



peration overlapping allows the next operation to begin even though the whole lot has not been completed through the previous operations. It can be used to expedite an order. However, sometimes costs are increased. (Introduction to Materials Management, Chapter 6.)

Question #: 169


Bottlenecks can be best defined as:

A) Work stations where available capacity is greater than required capacity.B) work stations where measured capacity is greater than required

capacity.C) Work stations where required capacity is greater than available capacity.D) Work stations where the demonstrated capacity is greater than the

measured capacity.


The correct answer is C).Bottlenecks occur when the required capacity is

greater than the available capacity. (Introduction to

Materials Management, Chapter 6.)

Question #: 170


The total volume of production passing through afacility is defined as:

A) Total output.B) Finished goods production.C) Load.D) Throughput.



Throughput is the total volume passing through a facility. Bottlenecks control the throughput as production can only proceed as quickly as the slowest bottleneck. (Introduction to Materials Management, Chapter 6).

Question #: 171


All of the following are principles of bottlenecksexcept:

A) Using a non-bottleneck 100% of the time does not produce 100% utilization.

B) The capacity of the production process depends on the capacity of the bottleneck.

C) Time saved at the bottleneck saves nothing.D) Capacity and demand must be considered together.



Time saved at the bottleneck is where capacity is saved because the entire production process can only go as fast as the bottleneck. (Introduction to Materials agement, Chapter 6.)

Question #: 172


Managing bottlenecks is extremely important to thethroughput of the production facility. All of thefollowing should be done to manage bottlenecks except:

A) Change the schedule frequently to meet customer promises.B) Maintain a time buffer before each bottleneck.C) Control the feed rate of material to the bottleneck.D) Increase the bottleneck capacity as much as possible.



The schedule should be changed as a last resort to meet customer deliveries. However, frequent changes will in fact reduce capacity at the bottleneck. (Introduction to Materials Management, Chapter 6.)

Question #: 173


A shop packet will contain all of the following except:

A) Engineering drawingsB) Bills of materialsC) Route sheetsD) Customer information



While the customer might be identified, it is not necessary to contain the customer information in the s@ packet. The other answers would generally be intruded. (Introduction to Materials Management, Chapter 6.)

Question #: 174

Subject Area: Supply Chain Mgfiagement

The input rate is controlled by:A) The material flow from suppliers.B) The tooling requirements.C) The release of orders to the shop.D) The demand from customers.



Releasing orders to the shop controls the inputrate. If orders are released faster than they can be produced, then queue work-in-progress and lead times will increase. (Introduction to Materials Management, Chapter 6.)

Question #: 175


You calculate the critical ratio which is .95 for a particular order. The order is:

A) Behind schedule.B) Ahead of schedule.C) On schedule.D) Critical ratio has nothing to do with order priority.



The critical ratio measures the priority of an order to the other orders at a work center. It is calculated by:

Due date - Present date Actual time remaining----------------------- ---------------------

Lead time remaining Lead time remaining

(Introduction to Materials Management, Chapter 6.)Question #: 176


All of the following are objectives of purchasingexcept:

A) Buy goods and services in the right quantity and quality.B) Buy goods and services at the lowest cost possible.C) Maintaining good supplier relations.D) Schedule the suppliers plant so goods arrive on time.

Correct Answ


Purchasing objectives are the three answers in A,B, and C. In addition, purchasing must make sure the company receives the best possible service and prompt delivery by the supplier. (Introduction to Materials Management, Chapter 7.)

Question #: 177


Which of the following are factors in selecting suppliers?

I. Technical capability.II. Financial reliability.III. LocationIV. Service after the sale.

A) I, II and III.B) I, III and IV.C) II, III and IV.D) 1, II, III, and IV.



All of the factors listed should be considered when trying to select a supplier. other factors include price, credit terms and quality capabilities. (Introduction to Materials Management, Chapter 7.)

Question #: 178


The ability to negotiate price is dependent on the type of product. Which of the following products could generally be negotiated?

A) Maintenance, repair and operating suppliesB) Copper, cool, wheat, metalC) Standard electronic componentsD) Made to order motors



Generally made to order items which are made to specification from many sources can be negotiated.

Question #: 179


Which of the following best describes the advantage of a planner/buyer position?

I. Smooth flow of information between supplier and the factory.II. Improved coordination of factory requirements and the supplier.

III. Improved flow of materials through the factory.IV. Ability to match material requirements with suppliers capability.

A) I, II and IV.B) I, III and IV.C) II, III and TV,D) I, II ark IV-



The planner/buyer concept improves coordinationbetween the factory and supplier. By eliminating the extra handoff between planner and buyer, communication will improve.While materials will flow more smoothly into the facility, the flow through the factory is dependent on many other factors. (Introduction to materials Management, Chapter 7.)

Question #: 180


In most companies, material purchases represent what percentage of the cost of the product?

A) 30%B) 50%C) 70%D) 90%



@ most companies today, material costs represent 50'@ ir higher of the cost of the product.(Introduction to Materials Management, Chapter 7.)

Question #: 181


Which of the following would be included in demand management?

I. Forecasted requirementsII. Service parts requirements

III. Branch warehouse requirementsIV. Interplant orders

A) I, II and III.B) II, III and IV.C) I, III and IV.D) 1, II, III, and IV.



All of the answers would be part of demandmanagement, plus order entry and order promising.(Introduction to Materials Management, Chapter 8.)

Question #: 182


The purpose of a strategic business plan is:

A) To plan production by product family.B) To plan for business changes which take a long time.C) To establish customer requirements over the long term.D) To establish order promising strategies.



-rategic plans are used for long term planning (2-10 years). They are used to allow time to plan for changes which take a long time to occur. These might include new plants or distribution centers.

(Introduction to Materials Management, Chapter 8.)

Question #: 183


All of the following are principles of forecasting except:

A) Forecasts are usually wrong.B) Forecasts are more accurate for end items.C) Forecasts should include an estimate of error.D) Forecasts are more accurate in the near term.



Forecasts are more accurate for product families or gre The reason is that aggregate numbers tend to be more accurate then detailed numbers. So although the sales forecast error may be very small in a company, predicting the shipments of an end item will have more error associated with it. (Introduction to Materials Management, Chapter 8)

Question #: 184


When historical data is available in a company to use in forecasting future demand, the technique to use this data is:

A) Qualitative forecasting techniquesB) Extrinsic forecasting techniquesC) Intrinsic forecasting techniquesD) Causal forecasting techniques



Intrinsic forecasting techniques use internalhistorical data to forecast future demand. It is used based on an assumption that historical patterns can predict future patterns. (Introduction to Materials Management, Chapter 8)

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