Section 3 Quiz Questions

1. If the opening inventory is 100 units, salers are 500 units, and the ending inventory is 200 units, what will manufacturing produce?

300 units

400 units

500 units

600 units

Based on the given information, the opening inventory is 100 units and the ending inventory is 200 units. This means that 100 units were sold during the period. Since the sales were 500 units, the manufacturing must have produced an additional 600 units to account for the opening inventory, sales, and ending inventory. Therefore, the correct answer is 600 units.

Explanation

Based on the given information, the opening inventory is 100 units and the ending inventory is 200 units. This means that 100 units were sold during the period. Since the sales were 500 units, the manufacturing must have produced an additional 600 units to account for the opening inventory, sales, and ending inventory. Therefore, the correct answer is 600 units.

2. Which of the following is an objective of an MPS?

To maximize utilization of equipment

To keep the sales department happy

To maintain the desired level of customer service

To minimize inventory investment

The objective of an MPS is to maintain the desired level of customer service. This means that the MPS aims to ensure that customers receive their orders on time and in the desired quantity and quality. By effectively managing production schedules and inventory levels, the MPS can meet customer demands and expectations, ultimately leading to customer satisfaction and loyalty. This objective is important for businesses as it helps to build and maintain a positive reputation, attract and retain customers, and drive sales and profitability.

Explanation

The objective of an MPS is to maintain the desired level of customer service. This means that the MPS aims to ensure that customers receive their orders on time and in the desired quantity and quality. By effectively managing production schedules and inventory levels, the MPS can meet customer demands and expectations, ultimately leading to customer satisfaction and loyalty. This objective is important for businesses as it helps to build and maintain a positive reputation, attract and retain customers, and drive sales and profitability.

3. Under which of the following circumstances will firms generally make to stock?

Demand is unpredictable

Many product options exist

Required delivery times are shorter than the time needed to make the product

Customers require special engineering

When the required delivery times are shorter than the time needed to make the product, firms generally make to stock. This means that they produce goods in advance and keep them in stock, ready to be delivered to customers as soon as they place an order. This approach is taken to ensure that the products can be delivered quickly and meet the customers' demands in a timely manner. It also allows firms to handle sudden increases in demand more effectively, as they already have a stock of products available.

Explanation

When the required delivery times are shorter than the time needed to make the product, firms generally make to stock. This means that they produce goods in advance and keep them in stock, ready to be delivered to customers as soon as they place an order. This approach is taken to ensure that the products can be delivered quickly and meet the customers' demands in a timely manner. It also allows firms to handle sudden increases in demand more effectively, as they already have a stock of products available.

4. For the purposes of production planning, prodcut families should be established on the basis of...

Market segments

Similarity of manufacturing process

The availability of materials

The availability of machinery

Product families should be established on the basis of similarity of manufacturing process because grouping products with similar manufacturing processes together allows for more efficient production planning. It helps in streamlining production processes, reducing setup time, and increasing productivity. By grouping products with similar manufacturing processes, companies can optimize their resources, minimize production costs, and improve overall operational efficiency. Additionally, it enables better coordination and synchronization of production activities, leading to improved quality control and faster time to market.

Explanation

Product families should be established on the basis of similarity of manufacturing process because grouping products with similar manufacturing processes together allows for more efficient production planning. It helps in streamlining production processes, reducing setup time, and increasing productivity. By grouping products with similar manufacturing processes, companies can optimize their resources, minimize production costs, and improve overall operational efficiency. Additionally, it enables better coordination and synchronization of production activities, leading to improved quality control and faster time to market.

5. What is the portion of inventory or production that is not committed to customer orders called?

Free stock

Available-to-promise

Excess production

Waste

Available-to-promise refers to the portion of inventory or production that is not already allocated to customer orders. It represents the amount of stock that is available for new customer orders or to promise to customers in the future. This term is commonly used in supply chain management to determine the quantity of products that can be promised to customers without affecting existing commitments.

Explanation

Available-to-promise refers to the portion of inventory or production that is not already allocated to customer orders. It represents the amount of stock that is available for new customer orders or to promise to customers in the future. This term is commonly used in supply chain management to determine the quantity of products that can be promised to customers without affecting existing commitments.

6. Which basic production planning stragety will build inventory and avoid the costs of excess capacity?

Chase strategy

Level production strategy

Cycle counting strategy

Demand matching strategy

The level production strategy is a basic production planning strategy that aims to build inventory and avoid the costs of excess capacity. This strategy involves producing goods at a constant rate, regardless of fluctuations in demand. By maintaining a steady production level, the company can build up inventory during periods of low demand and meet customer demand during peak periods without incurring the costs associated with excess capacity. This strategy helps to balance production and inventory levels, reducing the risk of stockouts and excess inventory.

Explanation

The level production strategy is a basic production planning strategy that aims to build inventory and avoid the costs of excess capacity. This strategy involves producing goods at a constant rate, regardless of fluctuations in demand. By maintaining a steady production level, the company can build up inventory during periods of low demand and meet customer demand during peak periods without incurring the costs associated with excess capacity. This strategy helps to balance production and inventory levels, reducing the risk of stockouts and excess inventory.

7. The information needed to develop an MPS will come from which of the following?

The capacity requirements plan

The forecast of individual end items

Production activity control

The material requirements plan

The forecast of individual end items is necessary to develop a Master Production Schedule (MPS). The MPS outlines the specific production quantities and timing for each end item, based on the forecasted demand. By analyzing the forecast of individual end items, the organization can determine the production schedule and allocate resources accordingly. This information is crucial for effective production planning and ensuring that the organization can meet customer demand while optimizing resources and minimizing costs.

Explanation

The forecast of individual end items is necessary to develop a Master Production Schedule (MPS). The MPS outlines the specific production quantities and timing for each end item, based on the forecasted demand. By analyzing the forecast of individual end items, the organization can determine the production schedule and allocate resources accordingly. This information is crucial for effective production planning and ensuring that the organization can meet customer demand while optimizing resources and minimizing costs.

8. Which of the following is a characteristic of the MPS?

It facilitates forecasting

It works with families of products

It is an agreed-upon plan between production and marketing/sales

It cannot e used for order promising

The MPS, or Master Production Schedule, is an agreed-upon plan between production and marketing/sales. This means that it is a plan that is mutually agreed upon and coordinated between these two departments. The MPS helps to align production with the demand forecast provided by marketing/sales, ensuring that the right amount of products are produced at the right time to meet customer demand. This characteristic highlights the collaborative nature of the MPS and its importance in coordinating production and sales efforts.

Explanation

The MPS, or Master Production Schedule, is an agreed-upon plan between production and marketing/sales. This means that it is a plan that is mutually agreed upon and coordinated between these two departments. The MPS helps to align production with the demand forecast provided by marketing/sales, ensuring that the right amount of products are produced at the right time to meet customer demand. This characteristic highlights the collaborative nature of the MPS and its importance in coordinating production and sales efforts.

9. Which of the following is true about time fences in an MPS system?

Changes far out in the planning horizon can be made with little or no cost to manufacturing

In the "frozen zone", capacity and materials can easily be committed to new orders

Changes in the near future on the planning horizon are less costly to make than changes far out

The master planner should be authorized to make changes in the frozen zone

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Explanation

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10. Which of the following statements is most accurate about the MPS?

It is an agreed-upon plan between finance and manufacturing

If it is poorly done, we can expect past-due schedules and unreliable delivery promises

It is a plan for families of products that manufacturing expects to make over some period in the future

It provides input to the production plan

The statement "If it is poorly done, we can expect past-due schedules and unreliable delivery promises" is the most accurate about the MPS. This suggests that if the MPS is not properly executed, it can result in delayed schedules and untrustworthy delivery promises. This implies that the MPS plays a crucial role in ensuring timely production and delivery of products.

Explanation

The statement "If it is poorly done, we can expect past-due schedules and unreliable delivery promises" is the most accurate about the MPS. This suggests that if the MPS is not properly executed, it can result in delayed schedules and untrustworthy delivery promises. This implies that the MPS plays a crucial role in ensuring timely production and delivery of products.