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Master Planning of Resources
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Question 1 of 30
1. Question
Which of the following is not an element of Master Planning?
Correct
The capacity planning sections within Master Planning are
- Resource Planning, which validates the Production Plan
- Rough Cut Capacity planning, which validates the MPS
Capacity Requirements Planning is used to validate the planned production as defined by MRP
Incorrect
The capacity planning sections within Master Planning are
- Resource Planning, which validates the Production Plan
- Rough Cut Capacity planning, which validates the MPS
Capacity Requirements Planning is used to validate the planned production as defined by MRP
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Question 2 of 30
2. Question
The January forecast, using exponential smoothing, was 283 units. Sales in January were 295 units. Sales in February, March and April were 300, 287, and 295 units respectively. Using an alpha-factor of 0.2, what is the May forecast?
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Question 3 of 30
3. Question
The production forecast
Correct
The Production Forecast is the exploded option requirements based on the ATP of end products in an Assemble-to-Order environment. This becomes the forecast requirements for these options at MPS level
Incorrect
The Production Forecast is the exploded option requirements based on the ATP of end products in an Assemble-to-Order environment. This becomes the forecast requirements for these options at MPS level
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Question 4 of 30
4. Question
Which of the following may be a reason for forecast error?
Correct
The greater the complexity, the greater the opportunity for error
Incorrect
The greater the complexity, the greater the opportunity for error
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Question 5 of 30
5. Question
MPS quantities can best be described as
Correct
A firm planned order is a planned order for which the planner has taken responsibility. The master scheduler has control over every planned MPS order, therefore they are FIRM planned orders. They will only become scheduled receipts when they are converted into works orders and released into production
Incorrect
A firm planned order is a planned order for which the planner has taken responsibility. The master scheduler has control over every planned MPS order, therefore they are FIRM planned orders. They will only become scheduled receipts when they are converted into works orders and released into production
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Question 6 of 30
6. Question
Planning BOMs can be used for all of the following except
Correct
The item used to assist in order promising is the Available to Promise information created during master scheduling. All of the others are valid uses of Planning BOMs
Incorrect
The item used to assist in order promising is the Available to Promise information created during master scheduling. All of the others are valid uses of Planning BOMs
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Question 7 of 30
7. Question
Which of the following elements of demand would be considered when constructing a Master Production Schedule
I. Market forecasts
II. Customer orders
III. Interplant orders
IV. Engineering requirements
Correct
ALL potential elements of independent demand need to be taken into account when constructing the MPS. Each of the above is such an element
Incorrect
ALL potential elements of independent demand need to be taken into account when constructing the MPS. Each of the above is such an element
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Question 8 of 30
8. Question
Which of the following purposes does a tracking signal serve in a forecast?
Correct
The standard deviation or MAD sizes the error;
ATP identifies the rate at which the forecast is being consumed.
A tracking signal will help identify if the appropriate forecasting system is being used, but not whether the MOST appropriate system is being used.
Tracking signals do, however, detect bias (i.e. whether or not the forecast is consistently over or understated.)
Incorrect
The standard deviation or MAD sizes the error;
ATP identifies the rate at which the forecast is being consumed.
A tracking signal will help identify if the appropriate forecasting system is being used, but not whether the MOST appropriate system is being used.
Tracking signals do, however, detect bias (i.e. whether or not the forecast is consistently over or understated.)
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Question 9 of 30
9. Question
Which one of the following statements is untrue in relation to MAD and Standard Deviation?
Correct
Both MAD and Standard Deviation Measure just the size of the error; neither measures the direction as both use the absolute value of the error, ie they treat a deviation of +10 and –10 as equal
Incorrect
Both MAD and Standard Deviation Measure just the size of the error; neither measures the direction as both use the absolute value of the error, ie they treat a deviation of +10 and –10 as equal
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Question 10 of 30
10. Question
Which of the following statements is true related to exponential smoothing?
Correct
Exponential smoothing lags behind a trend, but with a high alpha (i.e. with fewer periods taken into account) the trend will be more closely tracked. At the introductory phase of a product it is more usual to use a qualitative rather than quantitative technique
Incorrect
Exponential smoothing lags behind a trend, but with a high alpha (i.e. with fewer periods taken into account) the trend will be more closely tracked. At the introductory phase of a product it is more usual to use a qualitative rather than quantitative technique
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Question 11 of 30
11. Question
A level production strategy
Correct
A level strategy produces at the same rate in every period, thus minimizing the amount of capacity change that will be required. Inventory levels will vary to create the balance between supply and demand
Incorrect
A level strategy produces at the same rate in every period, thus minimizing the amount of capacity change that will be required. Inventory levels will vary to create the balance between supply and demand
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Question 12 of 30
12. Question
Which of the following statements concerning a Final Assembly Schedule is incorrect?
Correct
The final assembly schedules will only look as far into the future as there are customer orders
Incorrect
The final assembly schedules will only look as far into the future as there are customer orders
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Question 13 of 30
13. Question
Which of the following is not a form a planning BOM?
Correct
A phantom BOM is a bill of material for a product that is never stored – the product is used in the manufacture of a higher level item as soon as it is produced. Each of the others is used within the Planning BOM structures
Incorrect
A phantom BOM is a bill of material for a product that is never stored – the product is used in the manufacture of a higher level item as soon as it is produced. Each of the others is used within the Planning BOM structures
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Question 14 of 30
14. Question
Which of the following are inputs to a realistic master production schedule?
I. Customer orders
II. The existing MPS
III. Product promotion plans
IV. Safety stock levels
Correct
The product promotion plans will have been taken into account in the forecast, which is also an input to the MPS
Incorrect
The product promotion plans will have been taken into account in the forecast, which is also an input to the MPS
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Question 15 of 30
15. Question
Distribution Requirements Planning is a
Correct
DRP, like MRP, creates a schedule of planned orders which drives the production and delivery schedules. Reorder point, on the other hand, is a pull system
Incorrect
DRP, like MRP, creates a schedule of planned orders which drives the production and delivery schedules. Reorder point, on the other hand, is a pull system
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Question 16 of 30
16. Question
Which of the following is the most likely result of an overloaded master schedule?
Correct
Second answer is also valid but the most immediate effect is the deterioration in customer service, followed by the overtime to try to catch-up again
Incorrect
Second answer is also valid but the most immediate effect is the deterioration in customer service, followed by the overtime to try to catch-up again
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Question 17 of 30
17. Question
A chase production strategy
Correct
A chase strategy matches output with demand at all times, thus eliminating inventory buildups. The answer therefore is 1.
The balancing mechanism is the changing in capacity, so 2 and 3 are false.
In all strategies, the objective is to maintain a high level of customer service, so 4, while possibly true, is not the best answer
Incorrect
A chase strategy matches output with demand at all times, thus eliminating inventory buildups. The answer therefore is 1.
The balancing mechanism is the changing in capacity, so 2 and 3 are false.
In all strategies, the objective is to maintain a high level of customer service, so 4, while possibly true, is not the best answer
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Question 18 of 30
18. Question
Which of these product/service structure diagrams would require a master production strategy at the finished goods level?
Correct
MPS at the finished goods level applies in a make to stock scenario. This is illustrated in figure I.
Figure II relates to an assemble to order situation, and figure III relates to a make to order situation.
First answer is the best answer
Incorrect
MPS at the finished goods level applies in a make to stock scenario. This is illustrated in figure I.
Figure II relates to an assemble to order situation, and figure III relates to a make to order situation.
First answer is the best answer
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Question 19 of 30
19. Question
Which of the following statements concerning RCCP is best?
Correct
RCCP looks at ALL known bottleneck resources, so 1 is false.
It cannot guarantee that the plant will not be overloaded, as a change in product mix may create new bottlenecks that have not been included in RCCP, so 2 is false.
New bottlenecks will be identified through CRP, so 3 is false.
That leaves 4 as the correct answer. 4 is true because for the master scheduling to be successful we must create a realistic MPS, and using RCCP enables us to validate the draft MPS to increase the probability of that
Incorrect
RCCP looks at ALL known bottleneck resources, so 1 is false.
It cannot guarantee that the plant will not be overloaded, as a change in product mix may create new bottlenecks that have not been included in RCCP, so 2 is false.
New bottlenecks will be identified through CRP, so 3 is false.
That leaves 4 as the correct answer. 4 is true because for the master scheduling to be successful we must create a realistic MPS, and using RCCP enables us to validate the draft MPS to increase the probability of that
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Question 20 of 30
20. Question
Which of the following statements concerning forecast accuracy is true?
Correct
The only true statement in the four statements above is statement 2, as safety stock levels are set to cope with the variation in demand, which is the variation between orders and forecast. The smaller this variation the less safety stock will be required to achieve the appropriate level of customer service.
Standard deviation measures the size rather than the direction of forecast error; it is orders rather than shipments that is used to compute forecast error, and statement 4 is untrue because what needs to be considered when making a forecast will remain the same until the forecast method – not the accuracy – changes
Incorrect
The only true statement in the four statements above is statement 2, as safety stock levels are set to cope with the variation in demand, which is the variation between orders and forecast. The smaller this variation the less safety stock will be required to achieve the appropriate level of customer service.
Standard deviation measures the size rather than the direction of forecast error; it is orders rather than shipments that is used to compute forecast error, and statement 4 is untrue because what needs to be considered when making a forecast will remain the same until the forecast method – not the accuracy – changes
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Question 21 of 30
21. Question
Which of the following are the benefits of a realistic master production schedule?
I. Customer orders will ship on time
II. Productivity will improve
III. Inventory levels will reduce
IV. Unplanned overtime levels will reduce
Correct
All of the above statements are true, so the best answer is D
Incorrect
All of the above statements are true, so the best answer is D
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Question 22 of 30
22. Question
Which of the following is the least likely result of an overloaded master schedule?
Correct
With an overloaded MPS customer service will deteriorate, and the level of unplanned overtime will increase. Therefore neither 1 nor 2 can be the correct answer. Productivity will decrease, and quality may deteriorate. Of options 3 and 4, 3 is the better answer as that is most unlikely in practically all situations. 4 will not happen typically only if a company places a high enough emphasis on product quality
Incorrect
With an overloaded MPS customer service will deteriorate, and the level of unplanned overtime will increase. Therefore neither 1 nor 2 can be the correct answer. Productivity will decrease, and quality may deteriorate. Of options 3 and 4, 3 is the better answer as that is most unlikely in practically all situations. 4 will not happen typically only if a company places a high enough emphasis on product quality
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Question 23 of 30
23. Question
An area picking system in a warehouse implies which of the following?
Correct
With an area picking system, each order is picked separately from all other orders. Therefore 1 and 2 are false, and 3 is true. 4 is false because this system can be used regardless of the warehouse organisation
Incorrect
With an area picking system, each order is picked separately from all other orders. Therefore 1 and 2 are false, and 3 is true. 4 is false because this system can be used regardless of the warehouse organisation
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Question 24 of 30
24. Question
Which of the following is not a matched pair in the hierarchy of planning steps?
Correct
The matched pairs of Priority and Capacity Planning steps are:
- Production Planning & Resource Planning
- Master Production Scheduling and RCCP
- MRP and CRP
- Production Activity Control and Input/Output Control.
The one of the above options that is not a matched pair is 1, Business Planning and Resource Planning
Incorrect
The matched pairs of Priority and Capacity Planning steps are:
- Production Planning & Resource Planning
- Master Production Scheduling and RCCP
- MRP and CRP
- Production Activity Control and Input/Output Control.
The one of the above options that is not a matched pair is 1, Business Planning and Resource Planning
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Question 25 of 30
25. Question
In which of the following scenarios would a make to stock policy be most appropriate?
Correct
A make to stock policy is most appropriate where a narrow range of products are offered, the demand is stable and the customer expects delivery in less time than the producer can make it.
Of the above options, 1 is not necessarily true because we are not told the production leadtime; 2 is false because it talks of a WIDE range of production options; 3 is true – it is one of the criteria – and while 4 is important, it will merely dictate the amount of inventory that can be put into stock. The best answer of the options given is 3
Incorrect
A make to stock policy is most appropriate where a narrow range of products are offered, the demand is stable and the customer expects delivery in less time than the producer can make it.
Of the above options, 1 is not necessarily true because we are not told the production leadtime; 2 is false because it talks of a WIDE range of production options; 3 is true – it is one of the criteria – and while 4 is important, it will merely dictate the amount of inventory that can be put into stock. The best answer of the options given is 3
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Question 26 of 30
26. Question
Which of the following statements concerning forecast accuracy is true?
Correct
The only one of the above options that is true is 3. We must have a forecast to create plans in the mid to long term – the degree of “badness” can be identified and the risks assessed accordingly. Forecasts are necessary in all environments, and we must continuously monitor the forecast as market changes can occur at any time
Incorrect
The only one of the above options that is true is 3. We must have a forecast to create plans in the mid to long term – the degree of “badness” can be identified and the risks assessed accordingly. Forecasts are necessary in all environments, and we must continuously monitor the forecast as market changes can occur at any time
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Question 27 of 30
27. Question
Which of the following are the potential benefits of a realistic master production schedule?
I. On-time delivery performance will improve.
II. Machine utilization will increase.
III. Overtime will no longer be needed
IV. Unplanned overtime levels will reduce
Correct
Statement I is possibly true – “improvement” depends on the starting point.
Statement II is false – machine utilisation is determined by the amount of time that the machine is available, i.e. not “down”, during the working day.
Statement III is false – there may be still overtime required to match capacity with load.
Statement IV is true – overtime can now be planned because of the predictability of movement of product in the plant.
The only option that satisfies these true/false decisions is 1, even though we still have not made a definitive decision in relation to statement I – because we do not need to as each of the other options contain II and/or III as true statements, which they are not
Incorrect
Statement I is possibly true – “improvement” depends on the starting point.
Statement II is false – machine utilisation is determined by the amount of time that the machine is available, i.e. not “down”, during the working day.
Statement III is false – there may be still overtime required to match capacity with load.
Statement IV is true – overtime can now be planned because of the predictability of movement of product in the plant.
The only option that satisfies these true/false decisions is 1, even though we still have not made a definitive decision in relation to statement I – because we do not need to as each of the other options contain II and/or III as true statements, which they are not
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Question 28 of 30
28. Question
Which of the following statements about Distribution Requirements Planning is true?
Correct
Of these four options, two are completely false – 1 and 3. 1 is false, as the requirements at the feeder center come from the planned RELEASES at the receiving center; 3 is false because it can and does work even with inaccurate forecasts.
2 is partially true, as each distribution still manages its own planned supply strategy but the linking of supplying DCs to receiving DCs reduces the overall independence of each.
4 is true, and is the correct answer, as the knowledge of planned demand – rather than a forecast of demand – will enable the producer to put the resources in place to meet the demand
Incorrect
Of these four options, two are completely false – 1 and 3. 1 is false, as the requirements at the feeder center come from the planned RELEASES at the receiving center; 3 is false because it can and does work even with inaccurate forecasts.
2 is partially true, as each distribution still manages its own planned supply strategy but the linking of supplying DCs to receiving DCs reduces the overall independence of each.
4 is true, and is the correct answer, as the knowledge of planned demand – rather than a forecast of demand – will enable the producer to put the resources in place to meet the demand
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Question 29 of 30
29. Question
Which of the following is the least likely result of an overloaded master schedule?
Correct
Let us look at each of the options from the point of is it likely to happen:
Option 1 will happen – WIP inventory will increase as queues increase in the factory and raw material will increase as material that cannot be processed is brought in to satisfy the plan.
Option 2 will happen as production tries to cope with the overload.
Option 3 will not happen – the disruptions created by the degree of expediting to try to meet customer demand will actually reduce capacity and productivity.
Option 4 will happen, as queues increase so also will leadtimes.
The answer to the question – which will NOT happen – is 3
Incorrect
Let us look at each of the options from the point of is it likely to happen:
Option 1 will happen – WIP inventory will increase as queues increase in the factory and raw material will increase as material that cannot be processed is brought in to satisfy the plan.
Option 2 will happen as production tries to cope with the overload.
Option 3 will not happen – the disruptions created by the degree of expediting to try to meet customer demand will actually reduce capacity and productivity.
Option 4 will happen, as queues increase so also will leadtimes.
The answer to the question – which will NOT happen – is 3
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Question 30 of 30
30. Question
Which of the following is not an element of Master Planning?
Correct
Raw materials planning is a function of MRP. Each of the others are elements of Master Planning. The answer is 4
Incorrect
Raw materials planning is a function of MRP. Each of the others are elements of Master Planning. The answer is 4