Documents - Tips Apicsmpr-350 PDF

Problem
Solution
1-1 When the forecast has outliers in the data, they must be The correct answer is C)
adjusted by a process called :
Outliers are data points which randomly occur outside the
A) Exponential smoothing
normal series of data. These outliers must be adjusted or
B) Double smoothing
they will skew the data, making the future forecast less
C) Filtering
accurate. This process of adjusting is known as filtering.
D) Trending
1-2 The Panel consensus method is recognized as a form of The correct answer is B)
which of the following types of forecasting ?
The Panel consensus method uses a series of
A) Quantitative
questionnaires to achieve a convergence of expert opinion.
B) Qualitative
It does not calculate a forecast quantitatively.
C) Causal
D) Panel smoothing
1-3 In order to forecast cash flow in a make-to-order The correct answer is D)

company, which of the following must be converted into
dollars ?
The final assembly schedule is the actual build schedule
in a make-to-order environment. It represents the final
A) Carrying cost of finished goods
products which have been sold to customers. This
B) Critical work center costs
information, converted to dollars, gives an excellent
C) Standard yield percentages
measure of future cash flow.
D) Final assembly schedule
(Vollmann, Berry, and Whybark, Manufacturing Planning
and Control Systems, Chapter 6).
1-4 All of the following would be good measures of MPS The correct answer is A)
achievement except :
The planned order release creating demand from a
A) Customer service as measured by on time
branch warehouse would become a gross requirement at
delivery
the central warehouse offset for transport leadtime.
B) Dollars of output per week
C) Equivalent actual units of output versus plan
D) Percent fill rate from inventory
1-5 At times, data used to forecast will be of poor quality. The correct answer is B)
Which of the following would be the correct action for
the stated data quality problem ?
Data omissions should never be accepted. The original
data should be obtained or a substitute should be entered.
I. Filter and adjust for abnormal demand
II. Accept data omissions and plan around them
III. Accept normal variations in the data
IV. Substitute for data omissions
A) I, II, and III
C) II, III, and IV
B) I, III, and IV
D) I, II, and IV
- 1 -
Problem
Solution
2-1 The relationship between resource requirements planning The correct answer is A)
and rough cut capacity planning is similar to the
relationship between which of the following ?
Resource requirements planning is a high level check on
resources. This would be similar to the production plan. In
A) Production planning to master scheduling
fact, resource requirements planning is done to validate
B) Production planning and MRP
the production plan. Rough cut capacity plannning checks
C) Master production scheduling and MRP
critical work centers to validate the master production
D) MRP to input/output control
schedule.
(Fogarty, Blackstone and Hoffmann, Production and
Inventory Management, Chapter 1).
2-2 Outside the demand timefence, the master scheduler The correct answer is C)
consumes the forecast by :
Beyond the demand timefence, forecasts are consumed by
A) Multiplying the forecast errors by the actual
using the actual orders only if they exceed the forecast
orders
requirements.
B) Using actual orders when actual orders are
less than forecast
C) Using forecast when actual orders are less
than forecast
D) By computing the available to promise
2-3 Once a company has agreed to the production plan, it is The correct answer is C)
manufacturing's responsibility to :
Once the production plan has been agreed to by the
Manufacturing, Marketing, and Finance areas, then it is
A) Create the capacity plan
Manufacturing's job to "hit the plan." A production plan
B) Change the master schedule to meet demand
provides the necessary guidance to all departments. This
C) Meet the plan
prevents the plan from becoming a wish list. For example,
D) Beat the plan
if Marketing would like additional production to support a
promotion, the production plan would cause a discussion
regarding tradeoffs; that is, what will not be produced if
the increase in production forces required capacity to
exceed available capacity.
2-4 Which of the following types of demand would require a The correct answer is A)
forecasting system ?
Independent demand and service part demand would need
I. Independent demand
to be forecast. Dependent demand would be calculated by
II. Service part demand
MRP.
III. Dependent demand
A) I and II
C) II and III
B) I and III
D) I, II, and III
2-5 In an assemble-to-order company with many final The correct answer is B)

configurations,
few
subassemblies,
and
many
components, good master scheduling practices would An assemble to order company will MPS at the
include :
subassembly level to start the production process, but will
not make the final product until a customer order arrives.
A) Establishing the master schedule at the final
By master production scheduling at the assembly level, it
configuration
allows the components to be ordered to ensure quick
B) Setting the MPS at the subassembly level
response to the customer.
C) Setting the final assembly schedule from the
production plan
D) Setting the MPS at the component level
- 2 -
Problem
Solution
3-1 In order to project future cash flows in a make-to-order The correct answer is A)
company, which of the following must be converted to
dollars ?
In order to project future cash flow in a make-to-order
company, you must be able to convert the planned
A) Planned component purchase orders
component purchase orders to the dollars of outflow to
B) Carrying cost of raw materials
purchase the components.
C) Carrying cost of finished goods
D) Costed work center standards
3-2 In deciding which forecasting technique to use, a The correct answer is B)

company's management must take many factors into
account. Which of the following must be considered ? The cost of producing the forecast versus the value to be
received must always be considered. If a high level of
I. The cost versus the value of the forecast
accuracy is required, this will help determine the technique
II. The order promising policy
to use. Order promising policy has no bearing on the
III. The degree of accuracy necessary
method of forecasting.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
3-3 In order to be useful in master scheduling, a forecast The correct answer is B)

should be expressed in :
For the forecast to be useful, it must be expressed in
A) Dollars of shipments
items, quantities, and dates. Dollars are not useful in
B) Units of shipments
master scheduling and would have to be converted to
C) Capacity hours
units to be useful.
D) Labor hours
3-4 The delivery cycle can be best defined as :

A) The time elapsed between receipt of the
order and production
B) Time elapsed between product shipment and
customers receipt
C) The time elapsed between the receipt of
the customer order and the shipment of the
product
D) None of the above
The correct answer is C)

Delivery cycle time is the actual time from
receipt of the customer order to the time of product
shipment.
3-5 A company uses a random location storage system in its The correct answer is A)
warehouses. While the inventory balances are accurate,
it is plagued by picking problems. Which of the following Whether purchase orders are arriving late really
should be checked ?
has no bearing on a locator system. Until stock is placed
in a location, the system does not know it exists. A
I. Personnel could need retraining
review of training would be warranted as new people may
II. Locations should be cycle counted to verify correct not have been trained properly to pick. Also, locations in a
locations on the system
warehouse must be cycle counted similar to inventory
III. Purchase orders may be late
records to validate procedures.
A) I and II
C) II and III
B) I and III
D) I, II, and III
- 3 -
Problem
Solution
4-1 The removal of outliers from data in order to provide a The correct answer is C)
reasonable historical base from which to forecast is
called
A) Regression
C) Filtering
B) Time series decomposition

D) Smoothing
4-2 Which of the following will most impact the Master The correct answer is D)
Production Schedule if inaccurate ?
The inventory balances of the MPS items, if not accurate,
A) Bill of material structures
will cause the MPS to be overstated or understated
B) Lead times of raw materials
depending on the error.
C) Operation sequencing
D) Inventory balances
4-3 When a tracking signal limit is exceeded, which two of The correct answer is C)
the following should be done ?
. The alpha should be adjusted
. The cause should be determined
. Corrective action should be taken
. The limit should be adjusted
A) ,
C) ,
B) ,
D) ,
4-4 The customer service measure, on time delivery, would The correct answer is D)
be used in a company to :
The ability of manufacturing to deliver to customers on
A) Determine the forecast error
time is a key measurement in most companies. While the
B) Evaluate the performance of suppliers
measure cannot be used alone as a measure of
C) Select the least costly transportation mode
manufacturing performance, it is a key measure to ensure
D) Evaluate manufacturing performance
customers are satisfied. The measure clearly would not be
used to determine forecast error, evaluate suppliers
(although as a supplier measure, on time delivery would
be a measure) or select the least costly mode of
transportation.
4-5 Which of the following is true of an aggregate forecast of The correct answer is B)
a group of items or SKU's ?
A) It may be divided by the number of SKU's to
establish the SKU forecasts
B) It is usually a better forecast than the SKU's
forecasted individually
C) It is of little value when SKU forecasts are available
D) It is used to establish EOQ quantities
- 4 -
Problem
Solution
5-1 You look at a company's production plan and notice that The correct answer is D)
the production each month is the same and the
inventory is fluctuating. This is called a :
A level strategy allows the fluctuation in demand to be
absorbed in the inventory. Production is maintained at a
A) Chase strategy
flat or level rate each month.
B) Inventory strategy
C) Capacity strategy
D) Level strategy
5-2 Which of the following is used to convert the master The correct answer is D)
production schedule into detail requirements ?
A)
B)
C)
D)
Production planning
Rough-cut capacity planning
Production activity control
Material requirements planning
5-3 The term "sigma" is used to refer to :

A)
B)
C)
D)
The correct answer is B)
The variation in the normal distribution

The standard deviation
The absolute deviation
None of the above
Sigma refers to the standard deviation which measures

dispersion of data.
5-4 Which of the following are reasons a time fence is used The correct answer is B)
in Master Production Scheduling ?
The primary purpose of a time fence is to define where
changes can occur automatically versus those changes
A) Because manufacturing resources are committed
that require management approval.
after a certain point
B) To regulate changes in the schedule
C) To ensure materials arrive on time to support MPS
5-5 Which of the following best defines a backorder ?

A) Product which has been allocated but not
issued to a manufacturing order
B) An unfilled customer order
C) The last order on a shipment
D) Freight picked up on a return trip

The ninth edition of the Apics Dictionary defines a
backorder as " an unfilled customer order or commitment.
A backorder is an immediate (or past due) demand
against an item whose inventory is insufficient to satisfy
demand."
- 5 -
Problem
Solution
6-1 A make-to-order manufacturing company would like to The correct answer is C)

cut its backlog from four months to two months. If
annual demand is 120 units, the production plan this year
should be how many units ?
A) 100
C) 140
B) 120
D) 160
6-2 Which of the following best describes pyramid forecasting The correct answer is B)
?
Pyramid forecasting aggregates and disaggregates the
A) It uses simulation to choose the best method
data. Focus forecasting uses simulation to choose the
B) It aggregates and disaggregates data
forecasting method which has worked best based on the
C) It is most useful in product life cycle
past as the best indicator of the future. Pyramid
forecasting
forecasting does not use product life cycles, but rather
D) It operates on the basis that the most
aggregates and disaggregates based on geographic
recent past will predict the future
regions, time, or product families.
6-3 The relationship between customer service and inventory The correct answer is A)
levels can be best described by which of the following?
Statistically, increases in customer service levels would
A) Statistically, increases in customer service
require increases in safety stock. However, practically
levels require increases in safety stock
speaking, this is not always the case. Reliable supply
B) Reductions in inventory levels always result
chains and reliable forecasting may allow increases in
in reduced customer service
customer service without the corresponding increase in
C) Increases in customer service levels always
safety stock.
require increases in safety stock
D) The relationship between inventory levels and
customer service has not been proven
6-4 In the manufacturing of forecast deviations, MAD is The correct answer is D)

frequently preferred over standard deviation for all of the
following reasons EXCEPT :
A) The standard deviation is more difficult to calculate.
B) MAD is capable of being updated conveniently with
the use of exponential smoothing
C) MAD is the expected forecast error for the next
forecast period
D) MAD is a more precise measurement
6-5 Which of the following are inputs to the Master The correct answer is B)
Production Schedule ?
All of the answers are inputs to the MPS except MRP.
I. Production plan
The MPS is an input to the MRP system.
II. Material requirements plan
III. Inventory balances
IV. Customer orders
A) I, II, and IV
C) II, III, and IV
B) I, III, and IV
D) I, II, III, and IV
- 6 -
Problem
Solution
7-1 Which of the following parts of Master Planning are The correct answer is D)
components of demand management ?
Order service and forecasting are components of demand
I. Master scheduling
management. The other two answers pertain to the supply
II. Order service
of resources.
III. Forecasting
IV. Production and resource planning
A) I and II
C) I, II, and III
B) II and IV
D) II and III
7-2 Which of the following are principles of production The correct answer is D)
planning ?
All three answers are principles of production planning.
I.. Production planning is a top management responsiblity The sum of the master production schedule will equal the
II. The master production schedule requirements should production plan.
. equal the production plan
III..Facility requirements are planned using the production
.plan
A) I and II
C) II and III
B) I and III
D) I, II, and III
7-3 The practice of reducing the forecast by actual customer The correct answer is D)
orders is known as
A) Available-to-promise
B) Order integration
C) Demand commitment D) Forecast consumption
7-4 A manufacturer in a make-to-order environment would The correct answer is A)

most likely stock :
To shorten the time necessary to make products to order,
A) Raw materials
make-to-order companies will often times stock raw
B) Subassemblies
materials which are common to their manufacturing. This
C) Manufactured parts
helps reduce the leadtime necessary to manufacture the
D) Finished goods
product ordered.
7-5 A master production schedule should be loaded to a The correct answer is D)

level that is
A)
B)
C)
D)
Equal to the sales forecast

Equal to sales orders
No greater than has been produced in the past
No greater than can be realistically produced
- 7 -
Problem
Solution
8-1 Which of the following are true statements regarding pull The correct answer is B)
systems ?
In production, a pull system only requires items to be
I. Just-in-time uses pull systems in production
produced as they are pulled by demand. Just-in Time
II. They are best for distribution systems
methodology would use a pull system to move product
III. Inventory management in distribution is decentralized through the manufacturing processes. Centralized "push"
with pull systems
systems are best for distribution networks so inventories
can be best utilized throughout the distribution network. If
A) I and II
B) I and III
a field warehouse is ordering from a central supply, this
C) II and III
D) I, II, and III
would be an example of a pull system in a distribution
network.
8-2 In a make-to-order environment, which of the following The correct answer is D)

is th LEAST important reason for managing orders
through all phases of company activities ?
A) To determine the impact of specifications on customer
promise dates
B) To determine the impact of engineering resources on
customer orders
C) To manage overall lead time and maintain a
satisfactory level of customer service
D) To maintain a sufficient backlog of customer
orders
8-3 Master production schedule decisions directly evaluate : The correct answer is C)
A) The final assembly schedule
Master production schedule decisions directly evaluate the
B) Long range resource and capacity availability
need and feasibility of resource and requirement
C) The need and feasibility of requirements and resource availability. The master schedule does not pertain to long
availability
range plans, final assembly, or production activity control.
D) Production activity control
8-4 Which of the following ratios could be measures of The correct answer is D)
customer service ?
There are many measures available to properly gauge
I. Order lines filled versus lines ordered
customer service. These are just three of many.
II. Complete orders shipped on time
III. Quantity shipped versus quantity ordered
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
8-5 In a make-to-order business, which of the following can The correct answer is C)
be used to forecast cash flow ?
A) Month end balance of finished goods inventory
and would be a predictor of the shipments and would
B) Capacity utilization
translate into future cash flow.
C) Final assembly schedule
D) Labor efficiency
- 8 -
Problem
Solution
9-1 If a forecast is understated, which of the following will be The correct answer is D)
underestimated ?
. Capacity
. Ship load
. Component needs
A)
C) ,
B)
D) ,
9-2 A company has several warehouses and each The correct answer is A)
warehouse maintains its own inventory levels. Which of
the following methods would best support the Distribution resource planning uses planning logic similar to
management of the inventory throughout the warehouse MRP which allows the planning of inventory at warehouse
system ?
locations. The leadtimes are established for inventory
movements between warehouses. Because the logic uses
A) Distribution resource planning
time phasing, inventory management is most effective
B) Reorder point with safety stock
using DRP in a warehouse network.
C) Economic order quantity
D) Limit inventory method
9-3 If a company changes its service level policy from 99 The correct answer is B)
percent to 90 percent, all of the following will increase
EXCEPT
A) Lost sales
C) Customer complaints
B) Inventory
D) Expediting activity
9-4 In which of the following environments will the final The correct answer is A)
assembly schedule normally correspond to the MPS ?
In a make-to-stock company, there is no need for a
I. Make-to-stock
separate final assembly schedule because products are
II. Make-to-order
stocked in their final assembled form for delivery to the
III. Assemble-to-order
customer.
A)
B)
C)
D)
I
II
I and II
II and III
9-5 If capacity equals 5,000 labor hours, a schedule of which The correct answer is C)
two items below will yield the maximum profit ?
---------------------------------------------Item
Sales
Labor
Mfg. h
Opportunity
Hrs. Each
Profit. Each
----------------------------------------------------
3,000
1.0
$ 0.9
2,000
1.5
1.65
1,000
2.0
. 2.4
. 500
4.0
. 3.5
----------------------------------------------A) ,
C) ,
B) ,
D) ,
- 9 -
Problem
Solution
10-1 A final assembly schedule is the final schedule of what The correct answer is A)
will be assembled to meet the customers order. The final
assembly schedule should be completed :
When a final assembly process is involved with making
the finished product, Master production scheduling is only
A) At the last possible moment
concerned with the anticipated build schedule of the
B) When the customer's order is received
common products (e.g., number of Thunderbirds). The
C) When the master production schedule is done
actual configuration of the product is done when the
D) As the parts are ready for assembly
customer orders the product. As such, the product should
be kept in its most common form until the latest possible
time for final assembly to the customer's specification.
10-2 Which of the following actions is most effective when The correct answer is A)
load chronically exceeds average capacity ?
A) Revising the master production schedule
B) Expediting the important jobs
C) Releasing orders early
D) Regenerating the material requirements plan
10-3 In a distribution requirements planning system, in-transit The correct answer is B)

lead time is accounted for by :
In DRP, the lead time between warehouses is offset as
A) Safety stock in the receiving warehouse
the planned shipment to the receiving warehouse becomes
B) Being offset as a gross requirement in the
the gross requirement in the supply warehouse. This logic
supply warehouse
is similar to the leadtime offset in an MRP system where
C) Safety stock in the supply warehouse
the planned order release is offset by the leadtime to
purchase or make the part.
10-4 Delivery lead time can be best defined as :
The correct answer is D)

customer order to product shipment
B) The time elapsed between product shipment
and customer receipt
C) The time elapsed between delivery of raw
materials and production
Delivery lead time is the actual time from the receipt of

the customer order to the delivery of the product.
10-5 Period
1
2
3
4
5
---------------------------------------------Forecast
10 10 10 10 10
The ATP logic breaks out as:
Orders
10 . 6
6
4
2
PAB
30 80 70 60 50
ATP = MSP-(sum all orders up until the next MPS)
ATP
30
= 60 - (6 + 6 + 4 + 2)
MPS
. 60
= 42 for period 2
On Hand
.
40
Cumulative ATP = 30 + 42
Based on the above MPS record, what is the
= 72
cummulative available to promise in period 2 :
A) 20
B) 24
C) 72
D) 84
- 10 -
Problem
Solution
11-1 Errors in the master schedule can result from data The correct answer is B)
inaccuracies in which of the following ?
A)
B)
C)
D)
Component lead times

Inventory balances
Bills-of-material structure
Manufacturing routings
11-2 Which of the following are objectives of the master The correct answer is A)
schedule ?
The master schedule objectives are to keep a level
I. A level repeating schedule
repeating schedule, to minimize changes to the schedule,
II. Changes are kept to a minimum
and to push them to future periods to keep them from
III. The schedule sums to the production plan
disrupting the schedule. It should sum to the production
IV. Maintain planning bills
plan. The master schedule does not maintain the planning
bills.
A) I, II, and III
B) II, III, and IV
C) I, II, and IV
D) I, III, and IV
11-3 A backlog can be best defined as :
A) The manufacturing queue on the floor

B) All the customer orders received but not
yet shipped
C) A delay in order taking caused by slow
computer response time
11-4 Demand management

following functions?
encompasses
I. Forecasting
II. Order entry
III. Master Production Scheduling
A)
B)
C)
D)
which
It is common in long lead time products such as

airplanes, to have large backlogs which manufacturing
works to.
of
the The correct answer is A)

Demand management includes the functions of forecasting,
order entry, order promising, branch warehouse
requirements, interplant orders, and service parts
requirements.
I and II
I and III
II and III
I, II, and III
11-5 Which of the following factors is LEAST important in The correct answer is D)
determining a production plan ?
A)
B)
C)
D)
Resource availability
The inventory plan
The sales forecast
The production schedule
- 11 -
Problem
Solution
12-1 How many mean absolute deviations does it take to The correct answer is B)
satisfy customer service at a 95% level ?
The 2.06 MAD level provides a 95% probability of
A) 1.60
having what the customer ordered.
B) 2.06
C) 2.56
D) 2.91
12-2 Based on the following information, the production plan The correct answer is D)
for this company should be :
This company plans to increase its inventory from 1200 to
Starting inventory
1200
1500 and meet demand for 2000. Therefore the production
Forecasted demand
2000
plan needs to reflect the 2000 demand + the 300 increase
Projected ending inventory 1500
in inventory or it must produce 2300.
(Vollmann, Berry, Whybark, Manufacturing Planning and
A) 1200
Control Systems, Chapter 7).
B) 1500
C) 2000
D) 2300
12-3 In resource planning, the bill of resources is based on The correct answer is C)
which of the following ?
A)
B)
C)
D)
The
The
One
One
lot size of a typical product

lot size of each product
unit of the typical product
unit of each product
12-4 Which of the following should be considered during the The correct answer is C)
production planning process ?
In production planning, component availability would not be
I. Component requirements
determined, as MRP would handle this. However, capacity
II. Capacity availability
would be checked at a rough cut level and manufacturing
III. Manufacturing labor needs
labor needs could be determined. Component availability
might be checked at the production planning level if it
A) I and II
were a scarce component.
B) I and III
C) II and III
D) I, II, and III
12-5 Which of the following statements is true if there is a The correct answer is A)
significant variation between actual and planned demand
?
When demand is uncertain, the variation between forecast
demand and actual demand will be high, causing the
I. Safety stock will be higher
mean absolute deviation to be high. Since safety stock is
II. Potential for stockouts will be greater
a function of forecast error, safety stock will also be
III. Mean absolute deviation will be lower
higher than normal.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
- 12 -
Problem
Solution
13-1 Which of the following are generally true in a The correct answer is B)
make-to-stock company ?
Products are not produced to customer order, but are
I. The MPS is stated in end items
pulled from finished goods inventory. As such, the MPS
II. .Products are made to customer order
would be stated in end items.
III. Customer orders are pulled from finished goods
inventory
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
13-2
Four common levels of detail in forecasting are listed
below. which of the following properly ranks the levels of
detail above from the lowest to the highest ?
. Product family (units)
. Product family (dollars)
. SKU's (units)
. End items (units)
A) , , ,
C) , , ,
B) , , ,
D) , , ,
13-3 A manufacturing company would like to increase its The correct answer is B)
backlog from one month to two months. The annual
demand for their product is 600 units. How many units The company currently produces 600 units annually or 50
per month. Their current backlog is one month or 50 units.
should they produce ?
In order to increase their backlog by one month, they will
need to produce 50 less than their annual demand, or 550
A) 500
units.
B) 550
C) 600
D) 650
13-4 Which of the following statements are true regarding the The correct answer is D)
MPS in a make to order company with a short promise
leadtime and long manufacturing leadtimes ?
Because customer orders are not far enough into the
future to plan capacity needs, some forecast of demand
I. The MPS is derived from a forecast on the long term would be required.
horizon
II. Actual customer demand would provide the
.requirements in the short-term
III. A mix of actual demand and forecast would generate
.requirements in the mid-term horizon
A) I and II
C) II and III
B) I and III
D) I, II, and III
13-5 If it is assumed that final products and lower-level The correct answer is B)
subassemblies are made both to stock and to order,
which of the following final assembly schedule(FAS)
practices should be adopted ?
A) Commitment to an FAS should be made as early as
possible.
B) The planning horizon of the FAS should be shorter
than that of the master production schedule.
C) The shipping schedule should correspond to the FAS
with the required offset.
D) Order promising should not be tied to the FAS
- 13 -
Problem
Solution
14-1 Which of the following best describes the term The correct answer is C)
synchronization to the production plan ?
The production plan and the master production schedule
A) Workcenters work together in a linear fashion
must be synchronized so that the MPS output equals the
B) Shipping is balanced to the customers need
production plan output. Changes which occur in either the
C) Changes in the master schedule are
production plan or the MPS must be linked so they
communicated
continue to be equal.
D) Capacity available equals capacity required
14-2 Trend extrapolation is used in aggregate forecasting in The correct answer is B)

which of the following ways ?
A)
B)
C)
D)
In identifying cyclical patterns

In projecting the long-range movement
In permitting easier graphing of the forecast
In identifying the presence of seasonality in product
demand
14-3 Forecast consumption can be best defined as :

A) A manufacturing commitment to produce
B) Replacing the forecast with actual orders
as received
C) Using the forecast against the backlog
D) Allocating gross requirements

Forecast consumption is the process of replacing the
forecast with actual orders as they are received. This
allows the demand to be properly calculated. If forecast
consumption did not occur, the demand for a part would
be doubled.
14-4 Which of the following statements regarding a forecast The correct answer is
are true ?
A forecast is more
I. Aggregate forecasts are generally more accurate than aggregated into larger
for a single item
predict the long range
II. A forecast is more accurate further into the future
A)
B)
C)
D)
A)
accurate as the numbers are
numbers. Forecasts which try to
future tend to be less accurate.
I only
II only
Both I and II
Neither I nor II
14-5 All of the following functions are included in physical The correct answer is C)
distribution EXCEPT:
Final assembly scheduling is a manufacturing
A) Customer order entry
process. Physical distribution begins when the product is
B) Warehousing
completed.
C) Final assembly scheduling
D) Transportation to customer
- 14 -
Problem
Solution
15-1 Which of the following sources of demand should be The correct answer is B)
considered in production planning ?
All sources of demand should be considered as part of
I. Order backlog from customers
the production planning process, including the customer
II. Scheduled receipts
order backlog, service parts requirements, and interplant
III. Interplant transfer of parts
demand. Any demand which will have an impact on the
production plans must be considered.
A) I and II
B) I and III
C) II and III
D) I, II, and III
15-2 Which of the following best defines the Final Assembly The correct answer is B)
Schedule ?
The MPS is the anticipated build schedule and is subject
A) It is an anticipated build schedule
to change. The FAS is the actual build schedule and
B) It is the actual build schedule
should be committed to as late as possible.
C) It is the same as the Master Production
Schedule
D) It is the same as available to promise
15-3 The process by which forecast and actual demand may The correct answer is C)
be compared and coordinated in the master scheduled is
known as
A)
B)
C)
D)
15-4
Available-to-promise logic
Measurement of forecast error
Consuming the forecast
Time fencing

The following question refers to the table below :
________________________________________________
Available to promise in the first period is equal to the
Item A
on-hand inventory plus the MPS, minus the customer
Leadtime : 0
Lot Size : 25
On-hand : 20
Safety Stock : 5 orders in each period, up to the period the next MPS is
scheduled.
________________________________________________
Period
1
2
3
4
5
6
________________________________________________
Forecast
10
10
15
15
15
15
Cust. Orders
5
3
2
Proj Available .35
25
35
20
30
15
ATP
MPS
. 25
25
25
Based on the information provided in the Tables above,

the available to promise in Week 1 is :
A)
B)
C)
D)
40
37
35
40
- 15 -
Problem
Solution
16-1 When determining the amount of product which is The correct answer is C)
available to promise, which of the following must be
considered ?
When calculating the available-to-promise inventory, only
the actual customer orders and the scheduled production,
A) Forecast orders and projected inventory
as determined by the Master Production Schedule, are
B) Forecast orders and the scheduled production
considered. In the first time period only, the on hand
C) Customer orders and the scheduled production
inventory would be used until the first MPS is slotted.
D) Customer orders and the projected inventory
16-2 All of the following are priority sequencing rules except : The correct answer is C)
A)
B)
C)
D)
Priority sequencing rules are established to determine

which job to run next at a work center. There are many
different rules for determining the priority. The latest part
due date is not one of the types of rules. Sometimes
companies will use the earliest part due date. Shortest
operation time ignores the due dates and focuses on
getting the most jobs through the factory by taking the
one with the shortest operation time.
(Vollmann, Berry, Whybark, Manufacturing and Planning
Earliest operation due date

Least slack rule
Latest part due date
Shortest operation time
16-3 Listed below is the history of demand for a product. The correct answer is D)
Forecast for May
Actual May
Actual June
Actual July
Actual August
.
.
100
150
155
140
153
The calculation of the new forecast would be:

100
105
110
113
+
+
+
+
.1(150-100)
.1(155-105)
.1(140-110)
.1(153-113)
=
=
=
=
105
110
113
117
then
then
then
(end
(end of May)
(end of June)
(end of July)
of August)
Using single exponential smoothing with an alpha of .10,

what would the smoothed average be at the end of
August ?
A) 111
B) 113
C) 115
D) 117
16-4 Which a sales order that exceeds the demand filter limits is The correct answer is B)
received, the most appropriate action is to
A)
B)
C)
D)
Issue a partial shipment

Verify the order with the customer
Revise the master production schedule
Change the demand filter limit
16-5 Which of the following should be forecast ?
I. Components of a finished good

II. Service parts
III. Finished goods to be shipped from a warehouse
A)
B)
C)
D)
Independent demand should be forecast and dependent

demand, such as component parts, should be calculated.
Service parts and goods shipped from a warehouse are
examples of independent demand items.
I and II
I and III
II and III
I, II, and III
- 16 -
Problem
Solution
17-1 Rough cut capacity planning helps to identify all of the The correct answer is B)
following EXCEPT :
Rough cut capacity planning provides mid to long range
A) Material and personnel shortages
capacity planning. Capacity requirements planning provides
B) Work center capacity based on the load
detailed work center planning. Rough cut capacity planning
C) Leadtime constraints
will also identify material shortages for key materials and
D) Mid to long range capacity issues
labor shortages for key skills. Remember, rough cut
capacity planning is a high level planning process for key
resources which may constrain the execution of the
manufacturing plan.
17-2 Master schedule changes inside the firm zone must be The correct answer is C)
managed. These changes should be authorized by :
Changes to the schedule for orders inside the firm zone
A) Plant manager
will have major cost and schedule ramifications and should
B) Master scheduler
be managed with approval by a senior manager. This
C) Senior manager
could be the President, or the V.P. of Manufacturing or
D) Manufacturing supervisor
Sales. Whatever the authority, the approval process should
not be so cumbersome as to keep changes from ever
taking place.
17-3 Which of the following statements is one about a master The correct answer is C)
production schedule ?
A)
B)
C)
D)
It
It
It
It
is the same as a forecast

is an estimate of demand
is a manufacturing plan
uses monthly planning periods
17-4 In statistics terms, one standard deviation equals The correct answer is B)
approximately how many mean absolute deviations ?
One standard deviation equals 1.25 MAD.
A) 1.10
B) 1.25
C) 1.50
D) 1.75
17-5 A master production schedule should be loaded to a The correct answer is A)

level no greater than :
The master production schedule should be loaded to a
A) Can be realistically attained
level which can be realistically produced based on the
B) The sales forecast for the week
capacity available. Historical levels of production may not
C) The customer orders already received
be realistic depending on the changes which have taken
D) Has been produced historically
place in a factory.
(Orlicky, Material Requirements Planning, Chapter 11).
- 17 -
Problem
Solution
18-1 The resource plan is typically stated in all of the The correct answer is B)
following terms EXCEPT
A)
B)
C)
D)
Pounds
Item numbers
Labor hours
Machine hours
18-2 The projected available balance represents :

A)
B)
C)
D)
The correct answer is A)
The projected on hand inventory balance

The uncommitted portion of the inventory
The leadtime necessary to produce
Either cumulative or per period data
The projected available balance (PAB) is the inventory

balance projected into the future. Answer B) is the
available to promise.
18-3 Based on the following demands the range would be : The correct answer is D)
Period
Period
Period
Period
A)
B)
C)
D)
1
2
3
4
100
140
120
90
The range is the spread in a series of observations; from

highest to lowest. In this example 140 - 90 = 50.
20
30
40
50
18-4 In designing a forecasting system, which of the following The correct answer is B)
is the primary considerations ?
A) The sample must be representative
B) The purpose of the forecast must be adequately
defined
C) The data must be derived from the correct sources
D) The form of the data must be suitable for compilation
18-5 Which of the following statements best describes how the The correct answer is B)
production plan relates to the resource plan ?
A resource plan provides the level of planning which
A) They operate independently
involves new capital expansion, buildings, machinery,
B) The resource plan constrains the production
warehouse space, etc. The resource plan provides the
plan
information necessary to understand when the production
C) The resource plan drives the production plan
plan cannot be met due to some resource constraint. At
D) The resource plan can only succeed with a
that point, management can take action to eliminate the
level production plan
constraint. Resource planning encompasses long, range,
aggregate planning.
- 18 -
Problem
Solution
19-1 All of the following may contribute to an unrealistic The correct answer is C)
master production schedule except :
Sales forecasts are generally inaccurate and are often
A) Inaccurate leadtimes
used as an excuse for manufacturing performance.
B) Incorrect yield estimates
However, the master production schedule is developed to
C) Inaccurate sales forecasts
equal the production plan which senior management has
D) Incorrect capacities
agreed to. If the master production schedule is developed
realistically to an agreed to sales forecast, then the
inaccurate forecast does not contribute to an unrealistic
MPS. Factors such as inaccurate leadtimes, inaccurate
yields, and manufacturing optimism regarding capacity will
contribute to the MPS being unrealistic.
19-2 Based on the following information, what is the mean The correct answer is C)
absolute deviation (MAD) ?
MAD = the sum of the absolute values of the
Forecast
Actual
deviation/numbers of occurances or
Period
Demand
Demand
1
100
200
MAD = |(100-200)+(150-100)+(150-200)+(200-150)
2
150
100
+(200-200)|/5
3
150
200
MAD = 250/5
4
200
150
MAD = 50
5
200
200
A) 30
B) 40
C) 50
D) 60
19-3 All of the following may contribute to an unrealistic The correct answer is B)
master production schedule EXCEPT
A)
B)
C)
D)
Inaccurate lead times

Inaccurate sales forecasts
Incorrect yield estimate
Manufacturing department optimism
19-4 Which of the following statements regarding a business The correct answer is A)
plan are true ?
While the business plan and the production plan would be
I. A business plan is usually stated in dollars
stated in different terms, they still should agree. Capacity
II. A business plan and the production plan should agree would be checked in resource terms, not at the work
III. A business plan considers the capacity of each work center detail.
center
A)
B)
C)
D)
I and II
I and III
II and III
I, II and III
19-5 In a master scheduling environment with products that The correct answer is C)
have
many
low-level
components,
a
few
subassemblies, and a large number of final
configurations, good practices would include which of the
following ?
. Setting the MPS at the subassembly level
. Using the planning bill technique
. Setting the final assembly schedule from the
production plan
A)
B)
C) ,
D) , ,
- 19 -
Problem
Solution
20-1 All of the following are sources of demand which should be The correct answer is C)
considered in production planning EXCEPT
A)
B)
C)
D)
Customer order backlog

Service part requirement
Firm planned orders
Interplant demands
20-2 Technique used to assess, the capacity implications of a The correct answer is C)
master production schedule include which of the following
?
. Critical ratio analysis
. Key work center load analysis
. Product load profile
A)
C) ,
B)
D) , ,
20-3 Safety stocks exist for which of the following reasons ? The correct answer is C)
A) To allow less expensive purchases by buying
more
B) To allow for transportation time
C) To provide protection against the
uncertainties of supply and demand
Safety stock exists to protect against unknown future

demand and the uncertainties of supply.
20-4 A forecasting system is required for which of the The correct answer is B)
following elements of total demand of an item ?
. Independent demand
. Dependent demand
. Replacement-part demand
A)
C) ,
B) ,
D) , ,
20-5 If the master production schedule is overstated, which of The correct answer is C)
the following will occur ?
The more unrealistic the Master Production Schedule
A) The factory will produce more
becomes, the more invalid the priorities will become. If
B) The backlog will be realistic
overstated, the backlog will grow until such time as the
C) Priorities will not be valid
plant cannot possibly overcome the problem.
D) Raw material costs will improve
- 20 -
Problem
Solution
21-1 All of the following techniques are useful in increasing The correct answer is C)
plant capacity EXCEPT
A) Forming productivity groups
B) Line balancing
C) Emphasizing throughput at bottleneck work centers
D) Increasing the queue time for critical work
centers
21-2 A company publishes their customer backlog as 4 weeks. The correct answer is D)
Which of the following best defines customer backlog ?
THe APICS Dictionary, Ninth Edition defines customer
A) Overdue shipments
backlog as "all the customer orders received but not yet
B) Orders received but not acknowledged
shipped." Some industries, such as aerospace, operate
C) Orders shipped but not received by the
with a consistent level of backlog.
customer
D) Orders received but not yet shipped
21-3 The minimum planning horizon for master scheduling The correct answer is A)
should be ?
A) The cumulative lead time
B) At least six months plus material lead time
C) The combined lead time plus a safety lead time of
one month
D) 52 weekly time buckets
21-4 Which of the following best describes the term customer The correct answer is B)
backlog ?
The definition of customer order backlog is those orders
A) Orders promised after the customer wants them which have been received but not yet shipped. The
B) Orders received but not yet shipped
backlog should constantly be monitored against the
C) Orders shipped but not yet billed
competition to ensure the backlog is not the result of poor
D) Orders received but not entered into system
processes. This would allow a competitor to win business
based on leadtime.
21-5 Exponential smoothing techniques are desirable in a The correct answer is C)

production and inventory control environment for which of
the following reasons ?
. Low cost
. Long-range accuracy
. Flexibility of application
A)
C) ,
B)
D) , ,
- 21 -
Problem
Solution
22-1 The product your company manufactures is due for a The correct answer is A)
design change at the end of the model year. Which of
the following factors should be considered in planning the When models change, there are many factors to consider
production for the current model ?
to ensure inventory unique to the old model is used up.
At the same time, the components for the new model
I. The accuracy of the forecast for the remainder of the need to be planned to ensure a smooth transition to the
current model year
new model. The accuracy of the forecast must be
II..The cost of obtaining parts if demand exceeds the considered to make sure parts are neither overordered nor
forecast
underordered. If the production phase out of the old model
III..The probability of having leftover parts when the is not well planned, there is a danger of having leftover
.model year ends
parts or a need to order small lots to support the
IV..The marketing plans for the new model design
remaining production. Marketing plans, which identify the
sales channels, demographics, etc. for which the new
A) I, II, and III
model is targeted would not be considered when planning
B) I, II, and IV
the production. The sales plans would be developed from
C) I, III, and IV
the marketing plans and would support the forecast by
D) II, III, and IV
which production would be planned.
22-2 Which of the following statements are true regarding The correct answer is D)
production planning ?
All of the statements are true with regard to the
I. It is senior management's responsibilty
production plan.
II. The master scheduler should "disaggregate"
the production plan to the master schedule
III. It focuses corporate production goals
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
22-4 Based on the following data, what is the mean absolute The correct answer is C)
deviation?
MAD = the sum of the absolute values of the deviations
Forecast
Actual
divided by the number of occurrences.
Period
Demand
Demand
1
200
150
MAD=[(200-150)+(200-100)+(200-250)+(200-300)]/4
2
200
100
MAD= 300/4
3
200
250
MAD= 75
4
200
300
A)
0
B) 50
C) 75
D) 100
22-5 Which of the following are among the three components The correct answer is C)
of master planning ?
.
.
.
.
Production and resource planing

Forecasting
Demand Management
Master scheduling
A) ,
C) , ,
B) ,
D) ,
- 22 -
Problem
Solution
23-1 Which of the following statements correctly describe the The correct answer is D)
relationship of forecasting and order service ?
. Order service deals with uncertain customer orders.
. Forecasts are used only for what cannot be planned
or calculated.
. The forecast alone is used for production and
resource planning.
. Demand management integrates uncertain forecasts
with certain order service.
A) ,
C) , ,
B) , ,
D) ,
23-2 Which of the following are included in a closed

loop MRP system ?
All of the above are included, plus production planning,

shop floor control activities, and financial systems.
I. Master Production Scheduling

II. Capacity Requirement Planning
III. Purchasing
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
23-3 All of the following items should be forecast EXCEPT The correct answer is
A)
B)
C)
D)
D)
Spare service parts

Maintenance requirements for equipment
Finished-good demand at the retailed location
Components of a finished good
23-4 In measuring forecast deviations, MAD is generally The correct answer is C)

favored over the use of standard deviation for all of the
following reasons except :
Standard deviation is a more precise measure of forecast
deviation. However, MAD is easier to compute using
A) Standard deviation is more difficult to calculate absolute variations and can be updated conveniently in the
B) MAD can be updated easily by using exponential exponential smoothing formula. Precision is not the
smoothing
overriding factor when forecasting.
C) MAD is a more precise measure
D) MAD is the expected forecast error for the next
period
23-5 A forecast consists of which two numbers ?

A)
B)
C)
D)
The
The
The
The
projection and the error

projection and the outliers
projection and the forecast
error and the variance
- 23 -
Problem
Solution
24-1 In using a DRP system, aggregate forecasts are often The correct answer is B)
used. These aggregate forecasts are then broken down
into detailed forecasts by distribution center. When this As aggregate forecasts are broken down into more and
happens, which of the following will most likely occur ? more detail, the relative errors will increase. The user must
be careful not to adjust the detailed forecasts in such a
A) The forecast will become more accurate
way that bias enters the forecast. This would cause the
B) Relative errors will increase
aggregate forecast to vary widely.
C) Inventory levels at the centers will increase
D) Inventory accuracy will decline
24-2 Which of the following is not a "general method" of The correct answer is C)
forecasting ?
A)
B)
C)
D)
Qualitative
Intrinsic
Extraneous
Quantitative
24-3 What should the level of accuracy be in a forecast
A) Each industry requires a different level of accuracy The level of accuracy depends on the impact the forecast
B) The error rate should be 5% or less
has on the business. The higher the level of accuracy of
C) Accuracy needed depends on the impact of the
the forecast, the more it costs.
forecast error
24-4
Lot size = 20
Safety Stock = 0
Leadtime = 2
Period
1
2
3
4
5
6
-------------------------------------------Forecast
10
10
10
20
20
20
Orders
PAB
ATP
MPS
ON HAND = 30
The projected balance drops below zero in periods 4, 5,

and 6 with lots scheduled for periods 2, 3, and 4, as the
release date would be two periods earlier.
Based on the time phased record above, schedule

releases should occur in which periods?
A)
B)
C)
D)
Periods
Periods
Periods
Periods
1,
2,
3,
4,
2,
3,
4,
5,
3
4
5
6
- 24 -
Problem
Solution
25-1 All of the following techniques are useful for increasing The correct answer is D)
capacity except:
Increasing the queue time at critical work centers will do
A) Form teams to increase output
nothing to change the capacity level at the work center. In
B) Balance lines more effectively
fact, the increased queue will most likely cause capacity to
C) Increase throughput at bottlenecks
decrease due to increased clutter at the work center.
D) Increase queue time at critical work centers
25-2 Which of the following will generally give a more forecast The correct answer is D)
?
A) Shorter periods
B) Smaller geographic units
C) Detailed product levels
D) Nearer time periods
25-3 In an MRP system, service parts are handled by which The correct answer is B)
of the following :
Service parts are added to the part's gross requirements
I. As independent demand added to the parts
so they would be an independent demand item. This
gross requirements
would require them to be forecasted.
II. As dependent demand added to the parts
gross requirements
III. Forecasted like an independent demand item
A)
B)
C)
D)
25-4
I and II
I and III
II and III
I, II, and III
May
June
July
August
ACTUAL SALES FORECAST

130
100
.
90
120
100 .
140
.
110 .
130

The absolute sum of the forecast errors is 120: when
divided by the number of occurrences, equals 30. The
cumulative deviation is -60, however.
Based on the above information, which of the following

statements are true regarding the deviation ?
I. The mean absolute deviation is 30
II. The cumulative deviation is 120
A) I
B) II
C) Both I and II
D) Neither I nor II
25-5 Which of the following actions should the Master The correct answer is C)
Scheduler take if the ATP line shows a negative balance
?
While changes to the master schedule should be avoided,
a negative ATP is a real problem because it is using
A) Wait to see if the customer orders are real
customer orders to make the calculation. This would
B) Compare the orders to the forecast to see if
indicate that the orders themselves can't be delivered as
they were planned by the sales department
promised. This would probably warrant a change in the
C) Change the master schedule to overcome the
schedule, as well as calling the customer to see if order
negative
dates can be changed.
D) Tell customers you can't promise product
- 25 -
Problem
Solution
26-1 Which of the following are objectives of production The correct answer is C)
planning ?
The four objectives of production planning are:
I. Ensure top management involvement
II. Measure actual work center output versus plan
1) To integrate business planning to detailed
III. Establish the level of manufacturing output
operation planning activities
IV. Integrate manufacturing with other business activities 2) To ensure top management involvement
3) To communicate the production plan
A) I, II, and III
4) To drive the Master Schedule
B) I, II, and IV
C) I, III, and IV
Measuring actual versus plan output is a production
D) II, III, and IV
control activity.
26-2 Company A has a multilevel distribution network. Where The correct answer is D)
would the top level record in the DRP system best
reside ?
The top level DRP record should be at the point closest
to the customer. If the information can be best gathered
A) At the manufacturing plant
at the customer site, then this would be the best place.
B) At the distribution center closest to the
Many companies are now managing the inventory at the
manufacturing plant
customer location.
C) At the distribution center closest to the
customer
D) At the customer site
26-3 Which of the following problems can be corrected at the The correct answer is B)
rough-cut capacity planning level ?
Rough cut capacity planning checks the capacity at critical
I. Overloads at critical work centers
work centers (or the plant), not at each work center.
II. Excess capacity at any work center
Capacity requirements planning provides the load by work
III. Excess load versus plant capacity
center.
A)
B)
C)
D)
I
I and III
II and III
I, II, and III
26-4 Which of the following changes would push the forecast The correct answer is C)
horizon further into the future ?
. Use of quaters, rather than months, as the length of
the period.
. The use of more forecasting periods.
. Involvement with a longer lead-time resource.
A) ,
C) , ,
B) ,
D)
26-5 The median can be defined as the :
A) Average of a group of values

B) Middle value of a group of values
C) Most common or frequent value of a
group of values
D) Sum of the deviations divided by the number
of values
The median is the MIDDLE value where half the values

are above and half the values are below the median.
- 26 -
Problem
Solution
27-1 Which of the following characteristics are associated with The correct answer is C)
long-range forecast ?
.
.
.
.
External data
Greater use of qualitative techniques
Recurring or periodic nature
Few forecasts of products or families
A) ,
C) , ,
B) ,
D) , ,
27-2 A resource plan is used to :

A)
B)
C)
D)
Develop the load by product family

Establish build schedules by product
Plan the use of energy in a company
Develop long range plans for equipment,
faciliites, and capital
Resource planning is used for the long range planning of

facilities, equipment, and capital. The calculations are made
based on the capacity and load of key resources (i.e., a
plant or warehouse). These calculations are done based
on the forecast.
27-3 What is generally considered to be "true" demand ?

A)
B)
C)
D)
Original quantity and requested shipping date

Original quantity and actual shipping date
Adjusted quantity and requested shipping date
Adjusted quantity and actual shipping date
27-4 Which of the following are reasons for maintaining safety The correct answer is D)
stock in finished goods inventory ?
All of the above are good reasons for maintaining safety
I. It covers errors in forecast
stock at the end item level.
II..The MPS plan may not be achieved even if
realistic
III..The inventory will buffer production from sales
variations
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
27-5 Each of the following is a correct response to the The correct answer is A)
indicated data-quality problem EXCEPT ?
A)
B)
C)
D)
Accept and plan around data omissions

Filter and adjust the model for abnormal demand
Get original data or substitute for a data omission
Accept normal variation
- 27 -
Problem
Solution
28-1 For the time horizon beyond the cumulative leadtime, any The correct answer is C)
change to the Master Schedule can be made except :
Beyond the cumulative leadtime for a product, the only
A) Those caused by poor inventory accuracy
problem to the MPS would be impacts on capacity. If
B) Those caused by bill of material changes
large orders were booked which caused significant capacity
C) Those having a major impact on capacity
constraints, the master scheduler would need to be
D) Those caused by poor quality
informed.
28-2 Which of the following statements correctly describes the The correct answer is D)
characteristics of a general method of forecasting ?
. Qualitative methods are based on the historical
pattern of a time series.
. Quantitative methods are a computational projection
of a numeric relationship.
. Intrinsic methods are based on intuitive or judgmental
evaluation.
. Extrinsic methods are based on external patterns.
A) , ,
C)
B) ,
D) ,
28-3 When evaluating the production plan, top management The correct answer is B)
would consider which of the following ?
The production plan is top management's handle on the
I. Inventory build
business and is not a detailed plan. Therefore, work
II. Production level by month
center capacity would not be evaluated. The inventory
III. Work center capacity
build, the production level by month, and the possible
IV. Potential outsourcing plans
outsourcing plans certainly would be evaluated by top
management in running the business.
A) I, II, and III
B) I, II, and IV
C) II, III, and IV
28-4 A given part had the 4 monthly forecast errors listed The correct answer is C)
below. What is the mean absolute deviation ?
The mean absolute deviation is calculated by dividing the
Jan Feb Mar Apr
sum of the absolute error by the number of observations.
Forecast Error
-100 +200 -200 +500
In this example, the absolute sum of the forecast errors is
1000 divided by the number of observations which is 4 or
A) 100
1000/4 = 250.
B) 200
C) 250
D) 400
28-5 Which of the following functions would NOT be included The correct answer is C)
as demand management ?
Demand management is the function of recognizing all
A) Forecasting
demands for goods and services to support the
B) Order promising
marketplace (APICS Dictionary, Ninth Edition). This function
C) Requisition approval
includes forecasting, order entry, order promising,
D) Interplant orders
determining branch warehouse requirements, interplant
orders, and service parts rerquirements.
- 28 -
Problem
Solution
29-1 The purpose of holding inventory in distribution centers is The correct answer is A)
to :
The reason to keep inventory in distribution centers is to
A) Improve customer service by keeping stock
improve customer service by keeping inventory close to
near the customers
the customers. Although transportation and warehousing
B) Reduce transportation and warehousing costs
costs rise, responsiveness to the customer is a necessity
C) Minimize inventory investment
in many businesses.
D) Increase inventory turns through the network
29-2 Which of the following best decribes a seasonal demand The correct answer is B)
index ?
A seasonal demand index estimates how much demand
A) Alpha factor is greater than .5
during a season will be above or below the average
B) Ratio of demand above or below the average
demand for the product. For example, if a product sells
C) Beta factor to calculate seasonality
1200 units per year, the average monthly volume will be
D) Weights the most recent month's demand
100 per month. If however, the month of July is part of
highest
the slow season, the index may be .6 or 60 units.
December may be at the height of the season and require
an index of 1.3, meaning that 130 units will be sold during
December.
29-3 Qualitative forecasting methods are used for which of the The correct answer is C)
following types of problems ?
. To adjust quantitative forecasts
. To evaluate highly repetitive, stable data
. To assess new markets, processes, or technologies
A)
C) ,
B) , ,
D) ,
29-4 A company uses actual customer orders to reduce the The correct answer is C)
forecast. This process is known as:
Forecast consumption uses actual customer orders to
A) Capable to promise
reduce the forecasted shipments. Rules are established to
B) Available to promise
determine what to do with the over/under consumption.
C) Forecast consumption
These rules provide direction for the master scheduler to
D) Demand balancing
adjust the schedule for the over/under amounts.
29-5 If the master production schedule becomes overloaded The correct answer is C)
due to equipment problems, all of the following could be
used as techniques to resolve the overload EXCEPT : It would be beneficial if customers could be contacted to
LENGTHEN order leadtime, not shorten it, until the
A) Overtime
problem is resolved.
B) Additional shifts on Saturday
C) Reduce the leadtime to process orders faster
D) Subcontract some work
- 29 -
Problem
Solution
30-1 What is the new forecast using exponential smoothing The correct answer is A)
given the following data:
The calculation:
Old Forecast = 100
Fcst/new = Fcst/old + alpha (Demand-fcst/old)
Alpha = .10
= 100 + .10 (120-100)
Demand = 120
= 100 + .10 (20)
= 102
A) 102
B) 105
C) 106
D) 108
30-2 Which of the following would be most useful in The correct answer is A)
determining the production planning horizon ?
The production plan time horizon would be influenced by
A) Capacity acquisition time frame
several factors, including the cumulative leadtime of the
B) Order backlog
manufacturing process, the business plan cycle, and the
C) Delivery leadtime
time it requires to acquire more capacity. The production
D) Customer sales cycle
plan should be far enough in the future to project the
need for more capacity. This will keep a company from
being surprised and allow adequate time for plannning.
30-3 All of the following are decompositions of data EXCEPT The correct answer is A)
A)
B)
C)
D)
Qualitative
Trend
Seasonal
Nonannual cycle
30-4 Which of the following stages are part of the product life The correct answer is D)
cycle ?
All of those mentioned are part of the product life cycle.
I. Introduction
The stage of growth acceptance after introduction is also
II. Maturity
part of the cycle.
III. Decline
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
30-5 A panel of experts are assembled and asked to fill out The correct answer is B)
questionnaires about your business. The questionnaires
are then used to produce another set of questionnaires The panel consensus method uses a series of
which are then distributed to the panel again. Which questionnaires until a convergence of expert opinion is
forecasting method is being used ?
reached.
A)
B)
C)
D)
Consensus of opinions
Panel consensus
Historic analogy
Additive trend
- 30 -
Problem
Solution
31-1 In a distribution resource planning system, the ability to The correct answer is D)
check physical distribution resources exists. These
resources would include :
Distribution resource planning allows a resource
check on critical resources in distribution, similar to
I. Tractor and trailer capacity
manufacturing resource planning in manufacturing. These
II. Warehouse storage space
critical resources could be physical assets, such as
III. Finances
warehouse space, trailer capacity, or finances to ensure
the proper capital is available to meet the plan.
A) I and II
B) I and III
C) II and III
D) I, II, and III
31-2 Extrinsic forecasting models include all of the following The correct answer is B)
excep t:
The historical analysis is a forecast based on internal
A) Econometric models
factors.
B) Historical analysis
C) Analysis of leading indicators
D) Competitors actions
31-3 Which of the following would best describe "in transit" The correct answer is C)
inventory ?
In transit inventory can be best defined as material moving
A) Parts moving from one operation to another
between geographic locations. This would include plant to
in the same plant
distribution centers or movement between warehouses.
B) Parts being put away in a warehouse
C) Parts moving from a plant to a distribution
center
D) Parts moving through a cell in manufacturing
31-4 Which of the following techniques are useful in increasing The correct answer is A)
the capacity ?
Expanding the capacity can be done in many ways.
Productivity teams can be formed to address throughput,
I. Form teams to address throughput
and they should address the throughput at the bottleneck
II..Expand the bottleneck work centers to increase
work centers first. Additionally, overtime can be worked or
throughput
III..Increase the queues to provide work centers with subcontractors can be hired. Incresing the queues will not
increase the capacity but will only serve to exascerbate
enough work
the problem. In fact, increasing the amount of work which
is on the floor will actually decrease the throughput.
A) I and II
B) I and III
C) II and III
D) I, II, and III
31-5 Which of the following represents functional goals in a The correct answer is B)
business?
All of the answers support the functional goals in a
I. Sales want no missed deliveries and a
business except Engineering, which would like more
broad product line
development time.
II..Engineering wants a shorter product development time
III..Finance wants to minimize investment in
equipment and inventory
IV.Manufacturing wants long production runs
to minimize unit costs
A) I, II, and III
C) I, II, and IV
B) I, III, and IV
D) II, III, and IV
- 31 -
Problem
Solution
32-1 The responsiveness of moving average forecast to a The correct answer is C)

step or ramp change would be improved if
A) The number of periods were increased
B) The weight of the most recent observation were
decreased
C) The number of periods were decreased
D) The weight of the earliest observations were
increased
32-2 Which of the following best explains the use of a The correct answer is C)
tracking signal ?
A tracking signal is used to monitor the forecast quality. It
A) Signals that a specific job is behind
does this by calculating the sum of the variations of the
schedule
forecast and the actual values and divides this result by
B) Signals that capacity is exceeded
the MAD of the variations.
C) Signals that a forecast is no longer valid
D) Signals that the MPS is overloaded
32-3 When using exponential smoothing, which of the following The correct answer is B)
is a good decision in selecting a smoothing constant ?
A) Select a high with stable data
B) Select a low if there is a great deal of
randomness in the data
C) Select = 1 to forecast your data with no error
D) Select = 0.5 to weight past observation strongly
32-4 The frequency of revisions to a forecast should be : The correct answer is D)

A)
B)
C)
D)
Once per quarter

Once per month
Once per week
Depends on the business
The frequency of revision really depends on the business

and how accurate the forecast is.
32-5 Which of the following correctly identifies the type of The correct answer is A)
forecasting method with the movement of the data ?
A) The simple moving average is a good technique
to level data.
B) The additive trend method is good for seasonal data.
C) Regression is most appropriate for seasonal data.
D) Indexing would be used with level data.
- 32 -
Problem
Solution
33-1 Which of the following best defines the impact on the The correct answer is A)
company of having an overloaded master schedule ?
While the cost per unit produced could go down in a cost
I. Delivery performance will erode
accounting sense, the actual costs will reduce the profit
II. Work in process will grow
due to the inefficiency of work-in-process, longer
III. Cost per unit will go down due to high utilization leadtimes, and possibly lost business.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
33-2 All of the following involve extrinsic factors EXCEPT The correct answer is A)
A)
B)
C)
D)
Company advertising
Competitive actions
Weather
National or international events
33-3 Item : 2000

Leadtime: 0
Lot Size: 50
On-hand: 50
Safety Stock: 0
Available-to-promise logic is used to be able to accurately
------------------------------------------------ promise customers when their order will be deliverable.
Period
1
2
3
4
5
Inventory on hand of 50 is consumed by orders for 60 in
------------------------------------------------ periods 1 and 2. The -10 in period 2 is covered by the
Forecast
. 30
30
30
30
30
production of 50 in period 2, leaving 40 available. Of this
Customer Orders
40
20
. 5
40, 15 can be promised, leaving 25 available to promise.
Proj Avail Balance
Avail-to-Promise
MPS
50
50
Based on the above MPS table, if the company
promises to ship 15 units to a customer in period 3,
what is the available-to-promise in period 3 ?
A)
B)
C)
D)
10
15
20
25
units
units
units
units
33-4 A company has two plants; one is a final assembly plant The correct answer is B)
and the other produces subassemblies which supplies the
assembly plant. How is the interplant demand carried in The interplant demand, while not a customer
the subassembly plant ?
order, would be handled in a manner similar to a
customer order in the MPS. That is, the interplant demand
A) Safety stock absorbs the demand
would be a gross requirement for the supplying plant.
B) Similar to a customer order in the master
schedule
C) As components in MRP
D) As a purchase order on the assembly plant
- 33 -
Problem
Solution
34-1 Pyramid forecasting is a forecasting techniques which The correct answer is A)

A) Aggregate and disaggregate data
B) Uses simulation to find the best forecasting method.
C) Operates on the basis that the recent past is the
best indicator of the near future.
D) Is useful in product life cycle forecasting
34-2 The process known as forecast consumption is important The correct answer is A)
to master production scheduling because it :
The forecast consumption reduces the forecast by the
A) Monitors actual demand versus the forecast
actual demand as it occurs. This allows the master
B) Keeps bias from creeping into the forecast
scheduler to monitor the actual orders versus the forecast.
C) Helps to eliminate poor data
This also ensures the demand is not doubled with forecast
D) Provides supporting data to top management
demand and actual demand.
34-3 Which of the following types of demand would be The correct answer is B)
included in Distribution Requirements Planning ?
Independent demand would be included in a DRP plan.
I. Warehouse demand
Warehouse demand and finished goods demand would be
II. Raw material demand
included. Raw materials would not.
III. Interplant demand of finished goods
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
34-4 Forecast system design requires all of the following The correct answer is D)
EXCEPT
A) Defining designed intrinsic or extrinsic relationships
B) Establishing flags or limits to monitor systems
performances
C) Evaluation of various models for cost
D) Computing forecast error on a weekly basis
34-5 The Master Production Schedule is generally used for The correct answer is C)
which of the following :
The MPS is not used to drive the DRP plan. Rather,
I. Driving the distribution requirements plan
input from demands at the warehouse level become input
II. Establishing a rough-cut capacity plan
to MPS.
III. Input to the MRP system
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
- 34 -
Problem
Solution
35-1 Which of the following forecasting techniques fits the The correct answer is C)
indicated life cycle stage ?
A) Multiple regression forecasts are primarily used for
start-up efforts
B) Judgemental forecasts are primarily used for
steady-state efforts
C) Historical analogy is best used for start-up
efforts
D) Simple moving averages are best used for start-up
efforts
35-2 Which of the following would be a symptom of a The correct answer is B)

mismanaged master schedule ?
When the capacity plan is overloaded or front loaded, a
I. The capacity plan is level loaded
mismanaged master production schedule could be the
II. The on-time delivery rate is less than 90%
cause. When on-time delivery is less than 90% or
III. Leadtimes in the factory are excessively short
excessively short leadtimes exist in the factory, then a
IV. Past due shop orders occasionally occur
mismanaged schedule could be the cause. Past due shop
orders can occur occasionally even when the schedule is
A) I and II
well managed.
B) II and III
C) II and IV
D) III and IV
35-3 Which measures of forecasting error represent the The correct answer is B)
tendency of the forecast to be either above or below the
actual observation ?
.
.
.
.
Bias
Mean absolute deviation
Standard deviation
Tracking signals
A)
C) , ,
B) ,
D) ,
35-4 All of the following are techniques used to assess the The correct answer is A)
capacity impact of a master production schedule except:
Critical ratio is a priority sequencing rule to tell if a job is
A) Critical ratio analysis
on time. The rule is based on the formula: Time remaining
B) Critical work center load
divided by Work remaining. If the ratio is 1.0 the job is on
C) Product load profile
time. A ratio of less than 1.0 indicates the job is behind
D) Rough-cut capacity plan
schedule. If the ratio is greater than 1.0, the job is ahead
of schedule. Critical ratio is not used to validate capacity.
35-5 All of the following are based for forecast method The correct answer is C)
selection EXCEPT
A) Accuracy
C) Customer order policy
B) Cost
D) Order lead times
- 35 -
Problem
Solution
36-1 All of the following forecasting techniques are intrinsic The correct answer is C)
except :
Leading indicators are an external measure which may
A) Moving average
predict a trend in the business.
B) Exponential smoothing
C) Leading indicators
D) Trend analysis
36-2 Long-range forecasts are associated with which of the The correct answer is C)
following techniques?
Long-range forecasts generally do not use recurring or
I. .A small number of products or families
periodic data. They frequently use external data to
II. Recurring or periodic data
determine trends in the data. Qualitative techniques are
III. Qualitative techniques are used more frequently than frequently used in place of "hard" data. A small number
short range forecasts
of products or families are forecasted because aggregate
IV. External data
data tends to be more accurate.
Also, long range
forecasts tend to be used for more macro decisions so
A) I and II
detailed accuracy is not as important.
B) I and III
C) I, III, and IV
D) II, III, and IV
36-3 If the load on the factory continually exceeds the The correct answer is B)
available capacity, which of the following actions should
be taken ?
If the master production schedule is continually overloaded,
then the only option is to revise the master production
A) Re-prioritize the large customers' jobs
schedule to reflect realistic production levels. While this
B) Change the master production schedule
may lengthen the leadtimes to the cusomers, it will also
mean on time production for customers. Additional capacity
C) Lengthen the leadtimes quoted to the
may need to be obtained to alleviate the overload and
customers
keep leadtimes competitive.
D) Regenerate the capacity plan
36-4 Which of the following applies to the alpha factor used in The correct answer is A)
the exponential smoothing forecast formula ?
Larger values of alpha provide for a more responsive
I. Larger values of alpha give more weight to recent forecast based on more recent demands.
demands
II. Smaller values of alpha utilize older data more
III. Larger values provide a less responsive forecast
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
36-5 Which measures of forecast error represent the distance The correct answer is D)
of the error around the actual ?
. Bias
. Mean absolute deviation
. Standard deviation
. Tracking signals
A) , ,
C)
B) ,
D) ,
- 36 -
Problem
Solution
37-1 Which of the following statements is valid ?

A)
B)
C)
D)
MAD = 1.25 standard deviation

Standard deviation = alpha (MAD)
Standard deviation = 1.25 MAD
MAD = Standard deviation/n

The standard deviation is equal to 1.25 MAD. MAD is a
simpler formula to use in calculating the safety stock.
37-2 The load on the plant is constantly exceeding the The correct answer is D)
capacity. What action should be taken to alleviate the
situation ?
When the master schedule is overloaded consistently, the
only solution is to reschedule jobs. In order to reschedule,
A) Only manufacture the most important jobs
the right people (those who got the scheduler into the
B) Increase the inventory level
problem) must help to alleviate the overload. Policies must
C) Complete the easy jobs
then be established to ensure the problem does not
D) Change the master schedule
repeat. The most important people to participate in the
reschedule are the sales and marketing people, who can
provide insight into which orders to reschedule and can
contact customers regarding the changes.
37-3 Planning bills are referred to as psuedo bills. This The correct answer is B)
reference occurs because they :
Pseudo bills are planning bills of material which facilitate
A) Are modular bills of materials
planning by assigning percentages to the options for a
B) Represent bill structures of parts that
product. They are for products which are not being built.
cannot be built
For example, a car can be ordered with a manual
C) Are manufacturing bills used in final
transmission or an automatic transmission. The manual
assembly
transmission may be ordered only 10% of the time while
D) Facilitate capacity planning
the automatic is ordered 90%. The bill of materials would
be as follows:
Transmission
|
|
-----------------------.
|
.
|
Manual .10
Automatic .90
As the transmissions are planned for 10,000, the manual
transmissions would be planned at 1,000 while the
automatic transmissions would equal 9,000.
Based on the following information, what should safety The correct answer is C)
37-4 stock be to achieve a 95% customer service level?
(Round to nearest whole number)
The absolute sum of the forecast errors equals
250/5 periods = a MAD of 50. The MAD value for 95% =
Actual
Forecast
2.06 so 50 x 2.06 = 103.
Period
Demand
Demand
1
200
100
2
300
250
3
250
200
4
200
250
5
250
250
A) 50
C) 103
B) 76
D) 112
- 37 -
Problem
Solution
38-1 Which of the following are components of Master The correct answer is C)
Planning?
There are four activities which are included as part of
I. Production and resource planning
Master Planning: forecasting (II), order service, production
II. Forecasting
and resources planning (I), and master scheduling (IV).
III. Demand management
Demand management (III) is a component of Master
IV. Master scheduling
Planning and includes order service and forecasting.
A)
B)
C)
D)
I and II
I and IV
I, II, III, and IV
II and III
38-2 Which of the following need to be considered in The correct answer is D)

determining the detail required for capacity planning?
All of the answers should be considered in
I. Quality of the information versus the cost of acquiring it determining whether a detailed capacity plan is necessary
II. Length of time to change capacity
or whether a rough cut capacity plan will suffice.
III. Training period for new employees
A)
B)
C)
D)
I and II
I and III
II
I, II, and III
38-3 A company has changed its customer service policy from The correct answer is C)
90 percent to 95 percent. Which of the following will
occur?
An increase in customer service policies will increase the
inventory level. This results from needing more inventory to
I. Inventory will decrease
ship customer orders from stock 95% of the time. This will
II. Customer satisfaction will increase
have the positive customer satisfaction impact but the
III. Warehousing costs will increase
additional inventory will require more warehousing and
material handling to accomodate the extra inventory.
A) I and II
B) I and III
C) II and III
D) I, II, and III
38-4 Which of the following statements are true regarding The correct answer is C)
time-phased order point?
Time-phased order point uses MRP logic for independent
I. Lot sizing is eliminated
demand items. As a result, lot sizes are needed to
II. It is more effective than re-order point
determine the right quantity to order. Since MRP logic is
III. Uses MRP logic for independent demand
used, time-phased order point can be used for gross
requirements which are created from a forecast.
A) I and II
B) I and III
C) II and III
D) I, II, and III
38-5 Each of the following statements describes the Z value The correct answer is C)
EXCEPT
A) It represents a continuous number of standard
deviations
B) It relates distance to probability
C) It shows the amount of skew in the data
D) It relates to the mean absolute deviation
- 38 -
Problem
Solution
39-1 Which of the following will result from the level strategy The correct answer is C)
of production planning?
Using the level strategy, the production rate remains stable
I. Production occurs at exactly the same rate as the and fluctuations in demand will be absorbed in inventory.
sales forecast for each period
II. Inventory will generally build
III. The labor force and capacity usage remains stable
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
39-2 Rough-cut capacity planning is used because :
A) It provides an early warning for schedule

problems
B) It provides a capacity requirements plan
C) It is completed before the initial master
schedule
Rough-cut capacity planning is completed at a macro level

after MPS is completed but not committed to. It provides
a check that the MPS is realistic. Rough-cut capacity
planning represents the high level resource load on a
critical work center.
39-3 Which of the following statements regarding a forecast The correct answer is B)
are true ?
Forecasts tend to be more accurate as the numbers are
I. Aggregate forecasts are more accurate than for a aggregated. For example, it is easier to predict a total
single item
sales number for a company than the individual units
II. The further into the future a forecast is, the more supporting the sales. Therefore, forecasts are good for
accurate it becomes
business planning but companies must be able to quickly
III. Forecasts are good as planning tools only
adjust for the actual demand variations which occur.
Forecasts are also more accurate the closer term they
A) I and II
are.
B) I and III
C) II and III
D) I, II, and III
39-4 Forecast system management likely involves
. Comparison of the forecast with the actual value.

. Random evaluation of forecast performance.
. A Pareto-based evaluation of the cost of forecast
error.
. Tracking signals to "flag" out-of-tolerance situations.
A) ,
C) , ,
B) ,
D) , ,
39-5 Which of the following would be considered long term The correct answer is A)
capacity decisions ?
Working overtime would be considered a short-term
I. Build a new plant
solution to a capacity constraint.
II. Buy new machines
III. Work overtime
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
- 39 -
Problem
Solution
40-1 Available-to-promise is the :
A) Inventory on hand not ordered

B) Uncommitted portion of the inventory and
planned production
C) Unallocated portion of the gross requirements
D) Inventory for preferred customers
Available-to-promise is the uncommitted portion of the

inventory and the planned production maintained in the
master schedule. It is done to support the promising of
orders for customers.
40-2 Forecasting is commonly used in which of the following The correct answer is C)
situations ?
. Inventory control
. Final assembly scheduling
. Customer communication policy management
. Capacity management
A) ,
C) ,
B) ,
D) ,
40-3 A resource plan can be stated in all of the following The correct answer is D)
terms except :
Resource planning is capacity planning at the business
plan level. As such, the plan is designed to ensure long
A) Labor hours
range capacity will be available. The resource plan uses
B) Machine hours
high level units of measure such as labor hours, machine
C) Weight
hours, or any other homogeneous unit to combine all
D) Part numbers
items. Detailed part numbers would not be used.
40-4 Which of the following would generally be considered a The correct answer is A)
critical resource?
Special alloy components could be critical particularly if
I. Special components made from composites
using rare materials. In a company with a high debt load,
II. Financing in a highly leveraged company
financing could be difficult or very expensive. Additionally,
III. Common raw materials
the skilled labor needed in key operations would also be
IV. Skilled labor for key operations
critical.
A)
B)
C)
D)
I, II, and IV
I, II, and III
II, III, and IV
I, II, III, and IV
40-5 Which of the following best describes the use of a The correct answer is A)
tracking signal in forecasting ?
Forecast errors, if the proper forecast method is being
A) Large positive or negative numbers indicate
used, should trend toward zero. If the forecast is
the forecast for the item is not proper
becoming highly inaccurate, the tracking signal would show
B) Tracking signals should be ignored except
large positive or negative numbers.
for high frequency
C) Tracking signal indicates the trend in the
forecast
- 40 -
Problem
Solution
41-1 Given the following information, the mean absolute The correct answer is A)
deviation is :
The formula for MAD equals the sum of the absolute
Sum of the Absolute Errors = 200
errors divided by the number of errors. In the above
.
Number of Errors = 400
example 200/400 = .5
A)
B)
C)
D)
0.5
1
2
4
41-2 The components of master planning that are parts of The correct answer is A)
demand management are
.
.
.
.
Forecasting
Order service
Production and resource planning
Master scheduling
A) ,
C) , ,
B) ,
D) ,
41-3 A forecast which uses single smoothing with a trend The correct answer is A)
correction is called :
Second order smoothing provides a point from which the
A) Second order smoothing
trend can be measured in addition to the exponential
B) Additive trend
smoothing.
C) Horizontal seasonal
41-4 Each of the following is an interaction of demand The correct answer is B)

managemnt EXCEPT
A) The forecast is consumed by customer orders
B) The demand fence permits changes to production
capacity
C) The planning fence constraints changes to the
production schedule.
D) The demand fence is based on order or production
lead time
41-5 Capacity utilization is calculated as :

A) Actual output divided
B) Actual output divided
C) Actual output divided
capacity
D) Actual output divided
by design capacity
by effective capacity
by demonstrated
by standard labor hours
Actual output is the rate of output achieved while design

capacity is the maximum output attainable. Effective
capacity is the maximum output attainable with limitations
such as mechanical problems, changeovers, product mix,
etc. Utilization is calculated by dividing actual output by
design capacity.
- 41 -
Problem
Solution
42-1 Master production schedule stability can be achieved by The correct answer is C)
all of the following except:
Master production schedule stability can be achieved using
A) Firming planned orders
several methods, including the firm planned orders which
B) Freezing the schedule inside the demand fence
would require the scheduler to act to make changes;
C) Using the greater of orders or forecast
requiring senior level approval for changes so cost impacts
D) Requiring upper level approvals for changes
are understood; and freezing the schedule inside the
demand fence so no changes can occur. Using the
greater of forecasts or orders will cause more instability,
and may in fact cause overstatement in the MPS.
1
2
3
4
5
42-2 Period
-----------------------------------------Forecast
10 10 10 20 20
Beginning with 20 on hand in period 1, the available
Orders
.
0
0
0
0
0
inventory would be -10 in period 3 plus the production of
PAB
30 scheduled in that period would provide for 20 to be
MPS
.
30
available in period 3.
On hand
20
Based on the above MPS record, what is the projected
available balance in period 3 ?
A) 0
C) 20
B) 10
D) 30
42-3 Just-in-Time methods

. Suggest the smooth flow of inventory in the
production process
. Encourage suppliers to operate separately from
demanders
. Are based on the inventory-push principle
A)
C) ,
B) ,
D)
42-4 The technique of creating a bill of material based on the The correct answer is B)
common components of a product is a(n) :
Modular bills are used to group like components together
A) Option definition
to simplify the planning for complex products with many
B) Modular bill
options.
C) Phantom bill
42-5 The rough-cut capacity plan will differ from the resource The correct answer is B)
plan in which of the following ways?
Rough-cut capacity plans are more detailed than resource
I. The rough-cut capacity plan is less detailed than the plans and consider more production resources. Rough-cut
. resource plan
plans are disaggregated to days or weeks while resource
II. The rough-cut capacity plan considers more
plans are in months or quarters.
. production resources
III. Leadtimes are offset in the rough-cut capacity plans
IV. Rough-cut plans are displayed in months or quarters
A) I and II
C) II and IV
B) II and III
D) III and IV
- 42 -
Problem
Solution
43-1 To screen for outliers, a forecast system would :

A) Identify exceptional demand based on a
parameter
B) Generate the forecast without using the
outliers
C) Create data using the trend automatically

The forecast system can provide the forecaster with
exceptional demand "outliers" so the effect of the outliers
can be dampened by the forecaster. This keeps the
forecast from being skewed. Some software does this
automatically.
43-2 The final assembly schedule is
A) Generally used in make-to-stock and make-to-order

environments
B) Constrained by the production plan
C) Based on customer orders for end items
D) Most effective when used at the lowest level of the
bill of materials
43-3 A company with a cumulative leadtime of 13 weeks to The correct answer is D)

manufacture has a planning horizon of 11 weeks. Which
of the following will occur ?
A planning horizon is defined in the ninth edition of the
APICS Dictionary as "the amount of time a plan extends
I. Order releases for suppliers could be inside the
into the future." The planning horizon should extend as a
leadtime
minimum to cover the longest cumulative leadtime, plus
II. Constant expediting will occur
time for lot sizing low level components and to make
III. Manufacturing inefficiencies will be created
capacity changes. If the plan is short, releases to suppliers
will occur without adequate leadtime for the suppliers to
A) I and II
manufacture and ship the product to arrive on time.
B) I and III
C) II and III
D) I, II, and III
43-4 In a make-to-order environment, which of the following The correct answer is C)
is the least important reason for managing the customers
order through the all phases of company activities ? The primary function in a make-to-order environment is to
manage the customer orders to meet customer delivery
A) Meeting customer delivery dates
dates. In doing this, the leadtimes must be managed. If
B) Determining the impact of engineering changes
the customer delivery dates are met through the
C) Maintaining a sufficient backlog
management of leadtimes, then customer satisfaction will
D) Managing leadtimes and customer satisfaction
be high. Because engineering changes can dramtically
impact the leadtime, these changes need to be controlled
and communicated to the customer, if the delivery date
will be delayed. The least important is to manage the
backlog. Backlog occurs when orders are greater than the
capacity to produce. If the orders are meeting the
customer delivery dates, then the backlog will take care of
itself.
- 43 -
Problem
Solution
44-1 Companies which master schedule at the end item level The correct answer is A)
are :
Companies that schedule at the end item level are usually
A) Make-to-stock
make-to-stock companies; that is, they are shipping from
B) Make-to-order
stock to the customer. Examples of make-to-stock
C) Assemble-to-order
companies would be consumer products companies such
D) Engineer-to-order
as Hershey Foods, Kodak, etc. The inventory needed is
calculated statistically based on the customer service levels
desired for each class of inventory.
44-2 In master scheduling, hedging refers to a practice with The correct answer is A)
. Uses safety lead times to protect against late
deliveries
. Provides safety inventory in case option mixes are
different than forecast
. Provides safety inventory in case volume is greater
than forecast
. Provides safety inventory in case volume is greater
than forecast
A) , ,
C) ,
B) ,
D)
44-3 Which of the following pieces of information must be The correct answer is D)
available in order to prepare a realistic MPS ?
All of the information must be available to build a realistic
I. Knowledge of all production requirements
MPS.
II. Available capacity
III. Load profile of each MPS item
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
44-4 Pegging assists the master scheduler by
. Identifying for a given item the source requirement

. Identifying where safety stock or capacity should be
placed
. Identifying bottlenecked work centers
A)
C) ,
B)
D) ,
44-5 Why is Distribution Resource Planning considered a The correct answer is A)

"push" inventory management system ?
Inventory is managed throughout the distribution
A) Inventory is "pushed" to feed warehouses
network from a centralized location. It is "pushed" to
from a central location
where it is needed based on demand so the inventory in
B) Inventory is "pushed" to field warehouses
the whole network is managed.
when they reach their reorder points
C) Push systems allow decentralized control
of inventory
- 44 -
Problem
Solution
45-1 Which of the following statements regarding forecasts is The correct answer is C)
correct ?
Forecasts for a product family are generally more
I. Forecasts for a single product will be more accurate accurate, as are forecasts for repetitive events, as a
than for the product's family forecast
historical base can be used. Also, forecasts for near term
II. A forecast for a repetitive event will be more accurate events will generally be more accurate.
Forecasts
than for a single event
become less accurate further into the future.
III. Forecast of near term events are more accurate than
long term events
A) I and II
C) II and III
B) I and III
D) I, II, and III
45-2 Which of the following best defines a backorder?

A) Product which has been allocated, but not
charged to a manufacturing order
B) An unfilled customer order or commitment
C) The last order on a shipment
D) The pickup of freight on a return trip

A backorder is an unfilled customer order which will be
shipped at a later date.
45-3 Which of the following factors are utilized in a DRP The correct answer is B)
system ?
Distribution Requirements Planning is the function of
I. Transit time between warehouses
determining the need to replenish inventory at branch
II. On hand inventory at each location
warehouses. It does this by using the netting logic similar
III. Economic order quantity calculation
to MRP to plan inventory at each location based on the
IV. Forecast of demand by warehouse
leadtimes to move product to each location. The forecast
and customer orders would generate the gross
A) I, II, and III
requirements and the inventory is netted at each
B) I, II, and IV
warehouse location. Economic order quantity calculations
C) II, III, and IV
would not be part of the DRP system.
45-4 For make-to-stock companies, a 100% service level The correct answer is B)
implies huge inventory levels. In make-to-order
companies, immediate delivery would imply :
In order for a make-to-order company to make immediate
delivery, there needs to be substantial idle capacity. This
A) Significant expediting
would allow them to take every order and immediately
B) Substantial idle capacity
manufacture the product. It would require no engineering
C) Supplier leadtimes of zero
changes and a significant level of inventory to respond
D) Few engineering changes
quickly.
45-5 The major advantage of a two level MPS process is : The correct answer is B)
A) Simplified MPS process
B) Products are planned as the market place
demands
C) The second level protects against errors at
the first level
D) Accuracy is improved
A two-level MPS approach allows assemble-to-order firms

to plan products based on percentages to be sold without
forecasting all possible end item configurations. This
allows the planning to mirror the market place demand.
- 45 -
Problem
Solution
46-1 A bill of resources is :
A) A display of past capacity requirements based

on released orders
B) A list of the cumulative standard hours per
unit
C) A listing of required capacity and key
resources needed to manufacture one unit
D) A chart of the final assembly completions
and planned order completions by date
A bill of resources displays the required capacity and key

resources needed to manufacture one unit of a product or
family.
46-2 In a Just-in-time environment, the Master Production The correct answer is B)

Schedule should be :
In a just-in-time environment, the MPS would be
A) End items; units per week
stated in a rate as units per day.
B) End items; units per day
C) End items, units per month
D) End items; units bi-weekly
46-3 A firm planning order is
A) A firm requirement and a planned scheduling

quantity/date
B) A planned requirement and a firm scheduling
quantity/date
C) A computer scheduled order
D) A released order
46-4 Of all the problems which can occur with forecasting, The correct answer is C)
the most critical problem for management is :
According to Vollmann, Berry, and Whybark, in Chapter 16
A) Forecast error
of Manufacturing Planning and Control Systems, the most
B) Unpredictable trend
critical problem for management is to control bias. "It is
C) Controlling bias
often easier to live with large errors (large MAD) if that's
D) Short-term variations
what it takes to reduce bias." Bias is the consistent
deviation of the forecast in one direction. If the forecast is
not corrected and the bias continues, then the foundation
for the business plan will be weak.
46-5 The bill of resource represents

.
.
.
.
A major part of material requirements planning

The amount of resource required to produce an item
Setup times and per-lot times
The total time per units by key work centers
A) ,
C) , ,
B) ,
D) , ,
- 46 -
Problem
Solution
47-1 A company with a cumulative longest lead time of 13 The correct answer is D)
weeks to manufacture has a planning horizon of 11
weeks. Which of the following will occur ?
When the planning horizon is too short, orders will be
released without enough leadtime visibility. This will cause
I. Order releases for the vendor will be inside the lead a number of problems, including those listed above, to
time
develop as the organization tries to make up the time.
II. Constant expediting will occur
III. Manufacturing inefficiencies will occur
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
47-2 Outside the demand time fence, the master scheduler The correct answer is C)
consumes the forecast by
A) Measuring forecast errors
B) Using actual orders when actual orders are less than
forecasts
C) Using forecasts when actual orders are less than
forecasts
D) Computing the available-to-promise
47-3 A company has a one machine work center which The correct answer is B)
operates one shift per day for 12 hours, 5 days per
week. It is operating at an 80% efficiency and with The calculated capacity based in the information provided
average utilization of 90%. What is the weekly capacity, would be:
to the nearest hour, for this work center ?
12 hours per day X 5 days = 60 hours available
per week
A) 36
60 hours x 80% x 90% = 43.20 hours capacity
B) 43
C) 50
D) 57
47-4 The master scheduler should adjust the load profile by The correct answer is D)
.
.
.
.
Adjusting requirements to different time periods

Shifting resources among work centers
Changing the planning and capacity time fences
Outsourcing production or selling capacity
A) ,
C) , ,
B) ,
D) , ,
47-5 All of the following benefits result from master scheduling The correct answer is B)
EXCEPT :
The master production schedule integrates the plans from
A) Plans and commits resources to satisfy
each function, commits resources to satisfy customer
customers
demands, drives the detailed capacity and material
B) Drives the coordinated production plan
requirement plans, creates accountability within the
C) Manages inventory and backlog to appropriate
company, and manages the inventory and backlog level. It
levels
does not drive the production plan.
D) Ensures the integration of the business
plans from each function
- 47 -
Problem
Solution
48-1 The master production schedule is an input to MRP The correct answer is B)
because of which of the following attributes ?
Because MPS is a time phased schedule for end items,
I. It provides a rough cut capacity plan
MRP receives the quantity and due date for processing in
II. It is a time phased schedule of production items the same format.
A)
B)
C)
D)
I
II
Both I and II
Neither I nor II
48-2 "Planning" methods of product structuring are useful The correct answer is B)
because
. The number of end items planned is increased
. The production forecast is less accurate than the
end-item forecast
. Order entry is facilitated through customer-defined
modules
A)
C) ,
B)
D), ,
48-3 Which of the following are inputs to the Sales and The correct answer is D)
Operations Planning process ?
The Sales and Operations Planning process requires
I. Anticipated demand
inputs of all the above from the representative functions.
II. Capacities
This allows the company plans to be coordinated at the
III. New product design
highest levels before the manufacturing to execute those
IV. Financial resources required
plans begins.
A)
B)
C)
D)
I, II and III
I, III, and IV
II, III, and IV
I, II, III, and IV
48-4 Which of the following are key elements in defining The correct answer is A)
available-to-promise ?
Available-to-promise (ATP) is used with assemble-to-order
I. It is uncommitted future inventory or capacity
and make-to-order companies to commit the uncommitted
II. It is calculated from the MPS
portion of a company's inventory or planned production.
III. It is used for customer order promising
IV. It is used in make-to-stock and assemble-to-order
companies
A)
B)
C)
D)
I, II, and III

I, II, and IV
II, III, and IV
I, II, III, and IV
48-5 Master production schedule decisions directly evaluate The correct answer is C)
A) Long-range resource and capacity availability
B) The final assembly schedule
C) Necessity and feasibility of requirements and
resource availability
D) The production activity control
- 48 -
Problem
Solution
49-1 A company manufactures products which have many low The correct answer is C)
level components, a few subassemblies, and a large
number of final configurations. Good master scheduling This company would be an assemble-to-order company
which makes many final configurations from a few
practices would include :
subassemblies and many components. They would not
typically master schedule end items. The MPS unit would
A) Establishing the final assembly schedule from
be a planning bill and have the components as a set of
the production plan
common parts and options. The option usages would be
B) Setting the MPS at the final configuration
based on percentage estimates.
C) Using the planning bill technique
49-2 Which of the following trade-offs would be considered by The correct answer is B)
top management when evaluating the production plan ?
Top management would consider inventory levels and
I. Co-operative production agreements
co-operative production agreements. However, top
II. Machine scheduling
management would not be involved in machine scheduling.
III. Inventory levels
A)
B)
C)
D)
49-3
I and II
I and III
II and III
I, II, and III
PERIOD
1
2
3
4
ACTUAL DEMAND
FORECAST
120
100
120
120
100
130
110
140

Forecast bias = the sum of the (actual demand - forecast
demand)/the number of occurrences; or for the above
-40/4 = -10.
Based on the above data, the forecast bias is :

A)
B)
C)
D)
-10
-20
-30
-40
49-4 The projected available balance represents

A)
B)
C)
D)
The uncommitted portion of inventory

Either cumulative or per-period data
An inventory balance projected into the future
Production lead time
49-5 Which of the following statements is correct regarding the The correct answer is B)
production-sales-inventory report ?
The production-sales-inventory report can be shown in
A) It is only presented in table format
graph form (making A incorrect); production leadtimes are
B) It represents either cumulative or per
not shown (making C incorrect) and it can show
period data
cumulative production variances (making D incorrect). The
C) It shows production leadtimes
PSI report can represent either cumulative or per period
D) It does not show cumulative production
data.
variances
- 49 -
Problem
Solution
50-1 Which of the following statements are true regarding The correct answer is B)
super bills ?
Super bills are at the top level of the product structure
I. It is at the top level of the product structure
and aggregate lower level components into modules.
II. It groups components based on work centers
III. It aggregates components into modules
IV. It groups small parts into kits
A)
B)
C)
D)
I and II
I and III
II and III
III and IV
50-2 Which of the following statements are true regarding the The correct answer is D)
Final Assembly Schedule?
All of the statements are true regarding the final assembly
I. It is a statement of the exact set of end products to schedule.
be built
II. It controls the manufacturing from fabricated products
to shipable products
III. It schedules the purchase of components not under
MPS control which are needed for final assembly
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
50-3

The final assembly schedule normally corresponds to the
master production schedule in which production
environment ?
. Make-to-order
. Make-to-stock
. Assembly-to-order
A)
C) ,
B)
D) ,
50-4 A part had the four monthly forecast errors listed below. The correct answer is C)
What is the mean absolute deviation?
Jan Feb Mar Apr
The mean absolute deviation is calculated by dividing the
Forecast Error -100 +200 -200 +500
sum of the absolute error by the number of observations.
In this question, the sum of the absolute errors is:
A) 100
100 + 200 + 200 + 500 = 1000.
B) 200
Divide 1000 by the number of observations (4) to equal
C) 250
250.
D) 400
50-5 Which of the following problems can be found and The correct answer is C)
corrected at the rough-cut capacity level ?
Rough-cut capacity deals with capacity at critical work
A) Excessive queues at suppliers
centers, and at a high level. Detailed capacity
B) Overloads at a work center
requirements planning would deal with capacity at any
C) Load in excess of plant capacity
given work center. Therefore, rough-cut capacity planning
D) Underloads at any work center
would identify loads in excess of plant capacity early in
the planning process. This would allow for correction.
- 50 -
Problem
Solution
51-1 A manufacturing company wants to cut its backlog from The correct answer is C)
six months to three months. If the annual demand is 240
units, the production plan for this year should be for how The company can produce 20 units per month. The
many units of production ?
current backlog is 6 months or 120. They want to reduce
the backlog to 3 months or 60. In order to reduce the
A) 180
backlog to 60 they will need to produce 60 more than the
B) 240
annual demand of 240 or 300 units.
C) 300
D) 360
51-2 Which of the following statements regarding Distribution The correct answer is B)
Requirements Planning is true ?
Product is "pushed" from a central supply to distribution
I. It is a time phased order point system
centers. Assessment of inventory position is made for the
II. Product is pulled by the distribution centers
whole network by distribution planners. So even though
III. Lead times are the time to move product from central distribution reqirements feed to the central supply, planners
supply to distribution centers
assess the inventory position and push product to
warehouses.
A) I and II
B) I and III
C) II and III
D) I, II, and III
51-3 The modular bill is a planning bill of materials which The correct answer is A)
A)
B)
C)
D)
Is managed the way the product is sold

Is at the top level of the product structure
Groups components based on cost
Groups small parts
51-4 Which of the following best defines "true demand" ? The correct answer is B)
A) Original quantity and actual shipping date
B) Original quantity and requested shipping
date
C) Adjusted quantity and actual shipping date
D) Adjusted quantity and requested shipping
date
True demand results from the original quantity and

requested shipping date. By using this data, stockouts and
late deliveries will not distort the data.
51-5 Which of the following are correct statements about The correct answer is D)
production environments ?
. The make-to-stock environment has a wide product
line
. The make-to-order environment has a short
customer delivery time
. The make-to-stock environment has low customer
interface
. The make-to-order environment uses a unique bill of
materials for each order.
A) ,
C) , ,
B) , ,
D) ,
- 51 -
Problem
Solution
52-1 Planned orders from the warehouse translate to which of The correct answer is C)
the following in the factory ?
Planned orders from the warehouse in a DRP system
A) Planned orders in the MRP system
become gross requirements in the Master Production
B) Scheduled receipts
Schedule at the factory. The logic is similar to the MRP
C) Gross requirements in the MPS
logic.
D) Inventory in the MPS
52-2 The master scheduler can use pegging to identify:

A)
B)
C)
D)
Where safety stock is needed

Work center constraints
The source of requirements for a given item
Leadtimes which are in error
52-3 Which item should be master schedule ?

A)
B)
C)
D)

Pegging provides upward linkage of components to end
requirements. It assists the master scheduler in analyzing
exception messages from MRP by identifying the source
requirement of specific problem items. Pegging does not
pertain to safety stock, constrained work centers, or to
leadtimes.
End item in a make-to-order environment

Items which use critical resources
Items with short product lead times
Items which have low costs
52-4 Which of the following will affect the efficient use of The correct answer is D)
warehouse space?
Warehouse space is usually the largest capital cost in the
I. Cube utilization
distribution network. As such, the space needs to be used
II. Rack density
effectively. This means racks need to be as dense as
III. Rack accessibility
possible, and the space in those racks needs to be
IV. Order picking process
utilized as much as possible without becoming inefficient to
operate. Additionally, the operation of the warehouse needs
A) I and II only
to be efficient, so the picking process and access to the
B) III and IV only
racks must be easy to accomplish.
C) I, II, and III
52-5 Reason to master schedule include
.
.
.
.
Stabilization of material plans

Increase expediting
Managing key resources
Reducing communication among principal staff
A)
C) , ,
B) ,
D) , ,
- 52 -
Problem
Solution
53-1 The final assembly schedule should be used to convert The correct answer is B)
the MPS into:
The MPS is the anticipated build schedule. It represents
A) An anticipated build schedule
what is planned to be manufactured. The FAS is the
B) An actual build schedule
actual build schedule for what will be assembled.
C) Available capacity to build
D) Demonstrated capacity to build
53-2 Which of the following describes a planning horizon? The correct answer is A)
A) The amount of time the master schedule
extends into the future
B) The cumulative leadtime of a part
C) The amount of time the strategic plan extends
into the future
D) The time it takes to bring new capacity on
line
The planning horizon is the amount of time the master

schedule extends into the future. The minimum length of
the planning horizon should be equal to the cumulative
leadtime of the longest leadtime part. It should go out as
far as the time it takes to bring new capacity on line.
53-3 Which of the following statements is true about the The correct answer is C)
Master Production Schedule?
The Master Production Schedule is the planned build
A) It is the actual build schedule
schedule for manufacturing. The actual build schedule will
B) It is the same as the customer orders
often change as the actual build date gets closer. The
C) It is the anticipated build schedule
Final Assembly Schedule is the actual build schedule.
D) It is the forecast of orders
53-4 After the master production schedule is completed, which The correct answer is B)
of the following converts it into detailed component
needs?
The material requirements planning system converts the
MPS into detailed component needs using the bill of
A) Shop floor control system
materials and the inventory balances.
B) Material requirements planning
C) Production planning
D) Resource planning
53-5 A company has a distribution center A, 3000 miles away The correct answer is A)
from the supplying plant and a distribution center B, 1000
miles away. If both turn inventory over with the same Center A would require more product to be in-transit to
velocity, which will require the most in-transit inventory maintain the velocity due to its distance from the source.
(assuming the inventory moves by rail or truck)?
I. Center A
II. Center B
A) I only
C) Neither I nor II
B) II only
D) Both I and II
- 53 -
Problem
Solution
54-1 The master production schedule(MPS) is related to MRP The correct answer is D)
and the production plan in that :
. The MPS drives the production plan
. The MPS disaggragates the production plan to
individual products
. The MPS is the starting point for MRP
A) ,
C)
B) , ,
D) ,
54-2 A data point which differs significantly from other data The correct answer is C)
points can be defined as a(an) :
An outlier is defined as any data point which differs
A) Skew
significantly from other data points for a similar
B) Signal
phenomenon (APICS Dictionary, Ninth Edition). For
C) Outlier
example, if the data shows a demand pattern of 20 units
D) Regression
per month but in one month there is an increase in
demand to 200, the 200 unit demand would be an outlier
and be filtered for future forecasts.
54-3 The level method

. Production exactly the sales forecast in each period
. Generally does not build up inventory
. Minimize labor turbulence and stabilizes capacity
usage
. Would likely not be used in high cost inventory
environments
A) ,
C) , ,
B) ,
D) , , ,
54-4 Which of the following should come first in the business The correct answer is B)
planning process ?
Sales and Operations planning should come first in the
business planning process. The ouput from the Sales and
A) Production planning
Operations process is the production plan. The production
B) Sales and Operations planning
plan then provides input to the master production
C) Master production schedule
schedule. The rough cut capacity plan is done to check if
D) Rough cut capacity plan
the MPS is realistic.
54-5 Which of the following are correct regarding timefences ? The correct answer is B)
I. Timefences divide the planning horizon into firm,
The three timefences are firm, slushy, and free (sometimes
slushy, and free periods
referred to as liquid). The firm planning period does not
II. During the firm period, changes can be Ready made allow for changes unless approved at the highest
III..During the free period, measurable assets have not management level due to significant cost impacts. The
. been committed
slushy period allows some minor changes and the free
IV..The slushy period will allow some changes but
period allows changes easily.
. commitments to materials have generally been made
A) I, II, and IV
C) II, III, and IV
B) I, III, and IV
- 54 -
Problem
Solution
55-1 The product-sales-inventory report

A)
B)
C)
D)
Is represented only in table form

Represents either cumulative or per-period data
Cannot show cumulative production variance
Represents production lead times
PERIOD
1
2
3
4
55-2
ACTUAL DEMAND
FORECAST The correct answer is B)
120
100
120
120
MAD = the sum of the absolute error of (actual
100
130
demand - forecast demand)/number of occurrences; or,
110
140
80/4 = 20.
Based on the above date, the mean absolute deviation

(MAD) is :
A)
B)
C)
D)
10
20
40
80
55-3 The bill of resource is
A) A listing of required capacity and key resources

needed to manufacture one unit of a selected
product, family, or group
B) A display of future capacity requirements based on
planned and released orders over a given span of
time
C) A lead-time offset chart with final assembly
completions and the planned completions to date
D) A chart representing the cumulative standard assembly
hours per unit
55-4 The process by which the actual demand and the The correct answer is D)
forecast are compared in the master schedule is known
as :
According to the APICS Dictionary, Ninth Edition,
consuming the forecast is defined as "the process of
A) Cumulative ATP
reducing the forecast by customer orders or other types of
B) A tracking signal
actual demand as they are received." A problem in
C) Demand fencing
forecast consumption is created when the actual demand
D) Consuming the forecast
is significantly different from the forecast. Decision rules
need to be created to logically determine how to handle
the over or under forecast situation.
55-5

Resource planning can be generally differentiated from
rough-cut capacity planning because resource planning
. Uses the bill of resources, not a more detailed load
profiles
. Deals with product items and components
. Does not have a lead-time offset.
A)
B) ,
C)
D) , ,
- 55 -
Problem
Solution
56-1 The use of modular bills of material allows the Master The correct answer is B)
Production Schedule to :
A modular bill of material allows the MPS to be stated in
A) Use a final assembly schedule
fewer units. This facilitates the MPS process by stating the
B) Be stated in fewer different units
MPS in the units which are sold, not in the units which
C) Not equal the production plan
are built. For example, instead of trying to MPS every car
D) Use phantom bills of material
built, the MPS is for generic parts of a car such as the
air conditioner, the tires, two doors, etc. When the
customer specifies the actual options, the car is scheduled
for assembly with the specific options defined.
56-2 The mean can be defined as the :

C) Most common or frequent value in a
group of values
of values
The mean is the AVERAGE of a group of values found

by adding all the values and dividing by the number of
values.
56-3 Which of the following would normally be considered a The correct answer is C)
critical resource ?
.
.
.
.
Short lead-time components

Financial assets
Readily available raw materials
Skilled labor for key operations
A) ,
C) ,
B) ,
D) , , , .
56-4 The production plan responsibility rests with :

A)
B)
C)
D)
Material manager
Top management
V.P. Manufacturing
V.P. Finance

Top management is responsible for the production plan as
it "drives" the entire business.
56-5 All of the following are outputs from the Sales and The correct answer is D)
Operations Planning process EXCEPT :
The Sales and Operations Planning process produces
A) Sales plan
plans for each area to execute and be accountable. The
B) Production plan
various functional organizations develop and implement the
C) Financial plan
following plans:
D) Capacity plan
Sales plan (Sales and Marketing)
Backlog projection (General Manager)
Production plan (Manufacturing)
Financial plan (Finance)
New product development plan (Engineering)
Inventory projection (General Manager)
- 56 -
Problem
Solution
57-1 What is the new forecast using exponential smoothing The correct answer is B)
given the following data :
The formula for exponential smoothing is:
Old forecast = 200
Fcst/new = Fcst/old + alpha(Demand - Fcst/old)
Alpha = .50
= 200 + .5 (250-200)
Demand = 250
= 200 + 25
= 225
A) 220
B) 225
C) 230
D) 240
57-2 The four-step resource planning process

. Applies to resource planning and rough-cut capacity
planning
. Dose not consider product structure
. Calculates resource requirements
. Determine bills of resource for products or groups
A) ,
C) , ,
B) ,
D) , ,
57-3 Performance of master planning can be measured by The correct answer is A)

The variance between the master schedule and the
I. Variance of actual production from the master
forecast is not a measure of planning performance
production schedule
because the production planning and resource planning
II..The number of MRP reschedule messages
processes intervene. The other three answers are
III..Variance of the master schedule from the
measures of master planning performance.
.forecast
IV..Variance of the master schedule from the production
.plan
A) I, II, and IV
C) I and III
B) II and III
D) III and IV
57-4 Production planning primarily sates.

A)
B)
C)
D)
Mid-to long-range resource requirements

Volume loads by product family
Anticipated build schedules for anticipated items
Short- and mid-range capacity requirements and
adjustments
57-5 A heavy equipment manufacturer has a product line The correct answer is B)
consisting of complex assembly and multiple features.
The master production schedule would be best stated : In the case of many optioned products, the MPS should
be expressed based on common components of the
A) For final product for shipment
products. The features would be assembled based on the
B) In terms of major components
customer order.
C) On the final assembly schedule
- 57 -
Problem
Solution
58-1 A company has two plants; one is a final assembly plant The correct answer is B)
and the other produces subassemblies for the final
assembly plant. How is the interplant demand accounted The interplant demand would be included in the master
for in the subassembly plant ?
schedule in the same way as a customer order. This
would be carried as an actual order on the supplying
A) Safety stock absorbs the demand
plant.
B) Similar to a customer order in the master
schedule
C) Component demand in MRP
D) Purchase order on the final assembly plant
58-2 The term "hedging" as it refers to master production The correct answer is C)
scheduling, generally refers to :
Hedge stock is inventory used to protect against the
A) A transaction to protect against negative
uncertainty of demand and is similar to safety stock except
price fluctuations
a hedge incorporates timing.
B) The trimming of safety stock to reduce costs
C) Inventory to protect against the uncertainty
of demand
D) Establishing lead times with a safety factor
58-3 The length of a forecast horizon is primarily determined The correct answer is B)
by the :
The length of a forecast horizon is dependent on what the
A) Longest component leadtime
forecast will be used for. If the forecast is to determine
B) Purpose of the forecast
the long range capacity needs of the business, the
C) Customer leadtime demand
forecast may look out 3-5 years. The quantities would be
D) Manufacturing cycle time
at an aggregate level. If the forecast is used to generate
the annual business plan, then the horizon will be shorter
term, 12-18 months, with greater detail than the long
range forecast.
58-4 Which of the following are principles of production The correct answer is C)
planning
. Inventory must be managed in aggregate before it
can be controlled in detail
. Preparation of the production plan is the responsibility
of the master scheduler
. Disaggregation of the production plan is the
responsibility of the master scheduler
. The sum of master production schedule requirements
will not necessarily equal the production plan
. A ling-range production plan should be used to plan
facility requirements
A) ,
B) ,,
C) ,,
D) ,,
58-5 Which of the following best describes the term logistics The correct answer is B)
in the non-military sense ?
Logistics is the art and science of purchasing, producing,
A) The movement of finished goods to the
and distributing materials to ensure the products are in the
final customer
right place and in the proper quantities.
B) Obtaining and distributing products and
materials
C) Demand management and physical distribution
- 58 -
Problem
Solution
59-1 when evaluating the production plan, top management The correct answer is B)
would be likely to consider all ot the following
trade-offs EXCEPT
A)
B)
C)
D)
Inventory accumulation
Machine maintenance schedules
Quality considerations
Outsourcing or cooperative agreements
59-2 If a company increases the number of distribution The correct answer is B)

centers, which of the following will usually occur ?
An increase in the number of distribution centers will
I. Aggregate safety stock will increase
increase safety stock as each center will maintain a safety
II. Aggregate cycle time will decrease
stock. Transportation inventories will increase as more
III. Transportation inventories will increase
goods will move to the centers and between the centers.
Aggregate cycle time will also increase as the total
A) I and II
replenishment time to restock will most likely take longer.
B) I and III
C) II and III
D) I, II, and III

59-3 Period
1
2
3
4
5
------------------------------------------There are 20 on hand to start period 1 plus the
Forecast
10 10 10 20 20
production of 30 in period 1 to equal 50. For the horizon,
Orders
.
8
6
6
2
2
8 orders have been committed in period 1, 6 orders in
PAB
period 2, 6 orders in period 3, 2 orders in period 4, and 2
ATP
orders in period 5.
MPS
. 30
On hand
20
Based on the above MPS record,
non-cumulative ATP in period 1?
A) 12
B) 18
C) 26
what
is
D) 42
59-4 The chase strategy would be likely to

.
.
.
.
Have relatively high inventories

Stabilize employment and subcontracting
Have periodic capacity-change costs
Use extensive overtime during peak periods
A) ,
C) ,
B) , ,
D) ,
59-5 Available-to-promise represents :

A)
B)
C)
D)
the
The projected on hand inventory balance

The uncommitted portion of the inventory
The leadtime necessary to produce
Cumulative data only

Available-to-promise (ATP) is defined as the uncommitted
portion of the inventory. The projected available balance
(PAB) would be Answer A). Leadtimes would be
considered in the MPS offsetting while ATP is not
cumulative only.
- 59 -
Problem
Solution
60-1 An aggregate forecast can be best defined as :
A product group forecast is an aggregate forecast of

similar products in a product family. This aggregate
forecast is generally more accurate than a forecast for
each item.
A) A forecast which details each product in a

group
B) A forecast for a group of similar products
C) An industry forecast by industry code
D) An accumulation of inventory items
60-2 Which of the following functions are included as part of The correct answer is A)
demand management ?
Approving requisitions would be considered part
I. Forecasting
of the manufacturing process, not demand management.
II. Order entry
III. Approving requisitions
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
60-3 A company discovers that their forecast is overstated. As The correct answer is B)
a result, which of the following would be overestimated ?
Because the forecast is an integral part of the planning,
I. Factory load
the overestimation of the forecast will have an impact on
II. Factory capacity
the future factory load because the load would be planned
III. Component parts
based on the forecast. The resulting master production
IV. Subassembly parts
schedule will also be overestimated, which will cause the
MRP system to plan for too many component parts and
A) I, II, and III
subassemblies. The capacity, however, is calculated based
B) I, III, and IV
on the ability of the factory to produce, regardless of the
C) II, III, and IV
forecast.
60-4 The resource plane is used to
A) Develop volume loads by product family

B) Develop build schedule for selected items or families
C) Develop long-range requirements for facilities, capital,
and equipment
D) Determine short-range resource adjustments to
capacity
60-5 A master production schedule is overloaded if it is : The correct answer is B)

A)
B)
C)
D)
Equal to the forecast

Greater than the realistic capacity
Greater than has been produced in the past
More than what was originally planned
The master production schedule must be realistic in order

to properly plan production. An overloaded schedule is one
where the planned production exceeds the factory's ability
to produce it.
- 60 -
Problem
Solution
61-1 In which of the following industries is the final assembly The correct answer is B)
schedule most critical ?
Assemble to order products offer a great number
of final product configurations. As a result, final assembly
A) Food manufacturing
scheduling is most important in the automobile industry.
B) Automobile manufacturing
C) Chemical processing industry
D) Oil industry
61-2 Although the Master Production Schedule is realistic and The correct answer is D)
"frozen" within the demand time fence, MPS changes will
occur due to which of the following :
All of the above problems can cause the MPS to be
misstated. These problems would cause the MPS to be
I. Equipment failure
invalid and, as such, should be replanned.
II. Vendor quality problems
III. Manufacturing scrap
A)
B)
C)
D)
I and II
I and III
II and III
All of the above
61-3 Which of the following are objectives of production The correct answer is C)
planning ?
. Set the level of manufacturing output
. Consume the forecast with customer orders
. Compare actual work center output with planned
output
. Integrate manufacturing with sales and other
business-plan activities
A)
C) ,
B) , ,
D) ,
61-4 Forecast bias includes which of the following statements? The correct answer is A)
I. Forecasts which are consistently high
II. Forecasts which are consistently low
III. Forecast errors which sum to zero
A)
B)
C)
D)
Forecast errors which sum to zero would indicate

no bias. Forecasts which tend to be high or low are said
to exhibit bias.
I and II
I and III
II and III
I, II, and III
61-5 The planning hierarchy must operate
A) From bottom up only

B) From top down only
C) Simultaneously in both directions with feedback
between levels
D) Integratively at all levels together
- 61 -
Problem
Solution
62-1 The master production schedule is the:

A)
B)
C)
D)
Manufacturing build plan

Equivalent of a forecast
Final assembly schedule
Same as the production plan
The master production schedule is the planned build

schedule for manufacturing. It is not the same as a final
assembly schedule nor is it equivalent to a forecast. The
master production schedule uses the forecast to estimate
future demand. The production plan is input for the master
schedule.
62-2 Forecast system management likely involves
. Comparison of the forecast with the actual value.

. Random evaluation of forecast performance.
. A Pareto-based evaluation of the cost of forecast
error.
. Tracking signals to "flag" out-of-tolerance situations.
A) and only
C) , and only
B) and only
D) , and only
62-3 Listed below is the demand history for a product. If The correct answer is B)
exponential smoothing is used with an alpha factor of
.30, what would be the forecast for April ?
The formula for the exponential smoothing is:
old forecast + alpha(actual demand - old forecast) = new
Average
100 units
forecast
January
. 110 units
February
. 120 units
Feb fcst= 100 + .3(110 - 100) = 103
March
90 units
Mar fcst= 103 + .3(120 - 103) = 108.1
Apr fcst= 108.1 + .3(90 - 108) = 102.7
A) 102
B) 103
C) 104
D) 105
62-4 Which of the following statements is true regarding The correct answer is C)
master scheduling ?
In make-to-stock environments, component assembly
I. In make-to-stock production environments, component leadtime is slushy and order process and shipping
assembly leadtime is firm
leadtime is firm. In make-to-order and assemble-to-order,
II. In make-to-order production environments, final final assembly leadtime is firm.
III. In assemble-to-order production environments,
IV. In make-to-stock production environments, order
process and shipping leadtimes are free
A) I and II
B) I and III
C) II and III
D) III and IV
62-5 Which of the following best defines a normal distribution? The correct answer is D)
A)
B)
C)
D)
Data points are positively skewed

Data points are negatively skewed
No abnormal data exist
Data points are grouped close to the mean
Normal distribution means that most of the observations

are grouped close to the mean and a deviation from the
mean is as likely to be negative as positive. When
graphed, the data distribution looks like a bell shaped
curve.
- 62 -
Problem
Solution
63-1 The mode can be defined as the :

C) Most common or frequent value in a
group of values
of values
The mode is the MOST frequent value in a group of

values.
63-2 Which of the following would likely occur with a chase The correct answer is B)
strategy ?
With a chase strategy, inventories are kept level while the
production plan varies with sales. This would cause low,
I. Relatively low inventories
stable inventories and turbulent employment levels. In
II. Turbulent employment levels
addition, overtime would be required during peak periods.
III. Overtime costs would increase in peak periods
Capacity change costs would occur in the chase strategy.
IV. Capacity change costs would be zero
A)
B)
C)
D)
I, II, and IV
I, II, and III
II, III, and IV
I, III, and IV
63-3 Based on the following actual and forecasted demand, The correct answer is A)
the total forecast error is :
The forecast error is calculated by subtracting the forecast
Period
Actual
Forecast
demand from the actual demand.
1
90
100
2
140
120
3
120
140
4
110
130
A) -30
C) 50
B) 30
D) 60
63-4 Which measures of forecast error represent the tendency The correct answer is B)
of the forecast to be either above or below the actual
observation?
.
.
.
.
Bias
Mean absolute deviation
Standard deviation
Tracking signals
A) only
C) , and only
B) and only
D) and only
63-5 In an assemble-to-order environment, which of the The correct answer is B)

following statements is true regarding final assembly
scheduling ?
The master production schedule would plan the lower level
components while the final assembly schedule would
I. It is frequently stated in terms of customer orders schedule the assembly of the product based on the
II. It is used at lower levels of the product structure customer's order. It is usually based on a daily or shift
III. It is usually based on a daily or shift period of time rate.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
- 63 -
Problem
Solution
64-1 The production forecast :
A) Is generated based on production leadtimes

B) Represents the product group forecast in
two level master scheduling
C) Is primarily used with master production
scheduled items
D) Forecasts the group available-to-promise
multiplied by option percentages
The production forecast is not based on production

leadtimes and does not represent the product group
forecast. It is used with two level master scheduling and
represents the available-to-promise at the group level
multiplied by the option percentage.
64-2 Pegging assists the master scheduler by
. Identifying for a given item the source requirement

. Identifying where safety stock or capacity should be
placed
. Identifying bottlenecked work centers
A)
C) ,
B)
D) ,
64-3 All of the following are symptoms of Master Scheduling The correct answer is D)
problems EXCEPT :
Symptoms of problems with the Master Schedule include
late deliveries, disruptions on the plant floor, late deliveries
A) Late deliveries to customers
to
customers,
unplanned
overtime,
excessive
B) End of month crunch
work-in-process, constant expediting, frequent schedule
C) Resources which are used inconsistently
changes, and end of month crunch.
D) Forecasts which are always biased
Forecast bias is not caused by a problematic master
schedule.
64-4 Outside the demand time fence, the master scheduler The correct answer is C)
consumes the forecast by
A) Measuring forecast errors
B) Using actual orders when actual orders are less than
forecasts
C) Using forecasts when actual orders are less than
forecasts
D) Computing the available-to-promise
64-5 If the sum of the forecast errors is 100 for four periods, The correct answer is A)
what should the safety stock level be for a 95% service
level? (Round to nearest whole number)
The mean absolute deviation is 25(100/4), therefore the
MAD for a 95% service level is 2.06, so 25 x 2.06 = 51.5
A) 52
or 52.
B) 100
C) 141
D) 206
- 64 -
Problem
Solution
65-1 Which of the following functions should be involved with The correct answer is D)
the development of the production plan ?
The development of the production plan should be a cross
I. Marketing
functional process. Since the production plan is the main
II. Manufacturing
tool used to run the business, it is important that the
III. Finance
cross functional input occurs.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
65-2 The master scheduler should adjust the load profile by The correct answer is D)
.
.
.
.
Adjusting requirements to different time periods

Shifting resources among work centers
Changing the planning and capacity time fences
Outsourcing production or selling capacity
A) ,
C) , ,
B) ,
D) , ,
65-3 When capacity required exceeds available capacity, The correct answer is C)
actions which could be taken include which of the
following ?
It is impossible to complete orders sooner without more
capacity to do so. The only alternatives are to change
I. Complete orders sooner
schedules or obtain more capacity through subcontract or
II. Change the schedule
additional equipment.
III. Acquire additional equipment
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
65-4 Which of the following is the capability to identify, for a The correct answer is D)
given item, the sources of its gross requirements and/or
allocation ?
A.
B.
C.
D.
Bill of material.
Inventory turns.
Material plan.
Pegging.
65-5 If it is assumed that final products and lower level The correct answer is D)
assemblies are made to order and to stock, which of the
following FAS practices should be adopted ?
The master schedule horizon would have to be longer
than the final assembly schedule to accommodate the
A) Order promising should not be tied to the FAS
components and sub-assemblies which must be
B) Commitment to the FAS should be made as
manufactured to support the stock products as well as the
early as possible
FAS products. The FAS would be committed to at the
C) Shipping schedule should correspond to the
latest possible moment, so its horizon would not be long
FAS
enough to accommodate the purchase and manufacture of
D) Planning horizon of the FAS should be shorter
lower level components and sub-assemblies.
than the master production schedule
- 65 -
Problem
Solution
66-1 The master scheduler should adjust load profile by : The correct answer is D)
I. Adjusting requirements to different time periods
II. Adjusting timefences
III. Shifting resources among work centers
IV. Outsourcing production
A)
B)
C)
D)
The master scheduler should adjust the load by shifting

resources to work centers, moving requirements to different
time periods, or outsourcing production.
I and II
I and III
I, II and III
I, III and IV
66-2 In resource planning, a bill of resources is based on The correct answer is B)

The bill of resources bases the capacity measure (e.g.
labor hours) on one typical unit of product. From this, the
A) One unit of each product
product family's projected output is multiplied by the bill of
B) One unit of the typical product
resources, to extend the resources required to
C) The lot size of each product
"manufacture" the product family.
D) The lot size of the typical product
66-3 Which of the following are policies or guidelines The correct answer is A)
established to note where restrictions or changes in
opening procedures take place ?
A Time fences.
B. Planning periods.
C. Planning horizon.
D. Production downtime.
66-4 When the forecast has outliers in the data, they must be The correct answer is C)
adjusted by a process called :
Outliers are data points which randomly occur outside the
A) Exponential smoothing
normal series of data. These outliers must be adjusted or
B) Double smoothing
they will skew the data, making the future forecast less
C) Filtering
accurate. This process of adjusting is known as filtering.
D) Trending
66-5 A rush order is an order that is accepted by a supplier The correct answer is C)
with which of the following ?
A.
B.
C.
D.
Backlogs.
Back orders.
Less than the quoted lead time.
Production constraints.
- 66 -
Problem
Solution
67-1 The Panel consensus method is recognized as a form of The correct answer is B)
which of the following types of forecasting ?
The Panel consensus method uses a series of
A) Quantitative
questionnaires to achieve a convergence of expert opinion.
B) Qualitative
It does not calculate a forecast quantitatively.
C) Causal
D) Panel smoothing
67-2 Which of the following serves as the coordination tool The correct answer is D)
between the business plan and the master schedule ?
A. Capacity planning.
B. Strategic planning.
C. Production plan.
D. Sales and operations plan.
67-3 In order to forecast cash flow in a make-to-order The correct answer is D)

company, which of the following must be converted into
dollars ?
in a make-to-order environment. It represents the final
A) Carrying cost of finished goods
products which have been sold to customers. This
B) Critical work center costs
information, converted to dollars, gives an excellent
C) Standard yield percentages
measure of future cash flow.
D) Final assembly schedule
67-4 All of the following would be good measures of MPS The correct answer is B)
achievement except :
Dollars of output weekly is generally a poor measure of
A) Customer service as measured by on time
schedule performance especially in plants where a variety
delivery
of products are produced which have different values. The
B) Dollars of output per week
schedule would be better with a majority of higher priced
C) Equivalent actual units of output versus plan
products. It is preferable to measure the output in
D) Percent fill rate from inventory
equivalent units which manufacturing can relate to in
judging their performance.
67-5 Market share, customer share, and customer acquisition are The correct answer is D)
ways of measuring which of the following ?
A.
B.
C.
D.
Efficiency.
Utilization.
Sales.
Quality.
- 67 -
Problem
Solution
68-1 In a DRP environment, demand from a branch The correct answer is A)

warehouse would result in which of the following at the
central supply warehouse ?
The planned order release creating demand from a
branch warehouse would become a gross requirement at
A) Gross requirement
the central warehouse offset for transport leadtime.
B) Planned order release
C) Scheduled receipt
D) Pick release
68-2 At times, data used to forecast will be of poor quality. The correct answer is B)
Which of the following would be the correct action for
the stated data quality problem ?
Data omissions should never be accepted. The original
data should be obtained or a substitute should be entered.
I. Filter and adjust for abnormal demand
II. Accept data omissions and plan around them
III. Accept normal variations in the data
IV. Substitute for data omissions
A)
B)
C)
D)
I, II, and III

I, III, and IV
II, III, and IV
I, II, and IV
68-3 You look at a company's production plan and notice that The correct answer is D)
the production each month is the same and the
inventory is fluctuating. This is called a :
A level strategy allows the fluctuation in demand to be
absorbed in the inventory. Production is maintained at a
A) Chase strategy
flat or level rate each month.
B) Inventory strategy
C) Capacity strategy
D) Level strategy
68-4 The relationship between resource requirements planning The correct answer is A)
and rough cut capacity planning is similar to the
relationship between which of the following ?
Resource requirements planning is a high level check on
resources. This would be similar to the production plan. In
A) Production planning to master scheduling
fact, resource requirements planning is done to validate
B) Production planning and MRP
the production plan. Rough cut capacity plannning checks
C) Master production scheduling and MRP
critical work centers to validate the master production
D) MRP to input/output control
schedule.
68-5 The customer service measure, on time delivery, would The correct answer is D)
be used in a company to :
The ability of manufacturing to deliver to customers on
time is a key measurement in most companies. While the
A) Determine the forecast error
measure cannot be used alone as a measure of
B) Evaluate the performance of suppliers
manufacturing performance, it is a key measure to ensure
C) Select the least costly transportation mode
customers are satisfied. The measure clearly would not be
D) Evaluate manufacturing performance
used to determine forecast error, evaluate suppliers
(although as a supplier measure, on time delivery would
be a measure) or select the least costly mode of
transportation.
- 68 -
Problem
Solution
69-1 Outside the demand timefence, the master scheduler The correct answer is C)
consumes the forecast by :
Beyond the demand timefence, forecasts are consumed by
A) Multiplying the forecast errors by the actual
using the actual orders only if they exceed the forecast
orders
requirements.
B) Using actual orders when actual orders are
less than forecast
C) Using forecast when actual orders are less
than forecast
D) By computing the available to promise
69-2 Once a company has agreed to the production plan, it is The correct answer is C)
manufacturing's responsibility to :
Once the production plan has been agreed to by the
A) Create the capacity plan
Manufacturing, Marketing, and Finance areas, then it is
B) Change the master schedule to meet demand
Manufacturing's job to "hit the plan." A production plan
C) Meet the plan
provides the necessary guidance to all departments. This
D) Beat the plan
prevents the plan from becoming a wish list. For example,
if Marketing would like additional production to support a
promotion, the production plan would cause a discussion
regarding tradeoffs; that is, what will not be produced if
the increase in production forces required capacity to
exceed available capacity.
69-3 Which of the following types of demand would require a The correct answer is A)
forecasting system ?
Independent demand and service part demand would need
I. Independent demand
to be forecast. Dependent demand would be calculated
II. Service part demand
by MRP.
III. Dependent demand
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
69-4 Which of the following will most impact the Master The correct answer is D)
Production Schedule if inaccurate ?
The inventory balances of the MPS items, if not accurate,
A) Bill of material structures
will cause the MPS to be overstated or understated
B) Lead times of raw materials
depending on the error.
C) Operation sequencing
D) Inventory balances
69-5 In an assemble-to-order company with many final The correct answer is B)

configurations,
few
subassemblies,
and
many
components, good master scheduling practices would An assemble to order company will MPS at the
include :
subassembly level to start the production process, but will
not make the final product until a customer order arrives.
A) Establishing the master schedule at the final
By master production scheduling at the assembly level, it
configuration
allows the components to be ordered to ensure quick
B) Setting the MPS at the subassembly level
response to the customer.
C) Setting the final assembly schedule from the
production plan
- 69 -
Problem
Solution
70-1 In order to project future cash flows in a make-to-order The correct answer is A)
company, which of the following must be converted to
dollars ?
In order to project future cash flow in a make-to-order
company, you must be able to convert the planned
A) Planned component purchase orders
component purchase orders to the dollars of outflow to
B) Carrying cost of raw materials
purchase the components.
C) Carrying cost of finished goods
D) Costed work center standards
70-2 In deciding which forecasting technique to use, a The correct answer is B)

company's management must take many factors into
account. Which of the following must be considered ? The cost of producing the forecast versus the value to be
received must always be considered. If a high level of
I. The cost versus the value of the forecast
accuracy is required, this will help determine the technique
II. The order promising policy
to use. Order promising policy has no bearing on the
III. The degree of accuracy necessary
method of forecasting.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
70-3 In order to be useful in master scheduling, a forecast The correct answer is B)

should be expressed in :
For the forecast to be useful, it must be expressed in
A) Dollars of shipments
items, quantities, and dates. Dollars are not useful in
B) Units of shipments
master scheduling and would have to be converted to
C) Capacity hours
units to be useful.
D) Labor hours
70-4 The delivery cycle can be best defined as :

order and production
B) Time elapsed between product shipment and
customers receipt
C) The time elapsed between the receipt of
the customer order and the shipment of the
product
Delivery cycle time is the actual time from

receipt of the customer order to the time of product
shipment.
70-5 A company uses a random location storage system in its The correct answer is A)
warehouses. While the inventory balances are accurate,
it is plagued by picking problems. Which of the following Whether purchase orders are arriving late really
should be checked ?
has no bearing on a locator system. Until stock is placed
in a location, the system does not know it exists. A
I. Personnel could need retraining
review of training would be warranted as new people may
II. Locations should be cycle counted to verify correct not have been trained properly to pick. Also, locations in a
locations on the system
warehouse must be cycle counted similar to inventory
III. Purchase orders may be late
records to validate procedures.
A)
B)
C)
D)
I and II
I and III
II and III
I, II, and III
- 70 -

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Problem

1-3 In order to forecast cash flow in a make-to-order The correct answer is D)

2-5 In an assemble-to-order company with many final The correct answer is B)

3-2 In deciding which forecasting technique to use, a The correct answer is B)

3-3 In order to be useful in master scheduling, a forecast The correct answer is B)

3-4 The delivery cycle can be best defined as :

The correct answer is C)

B) Time series decomposition

5-3 The term "sigma" is used to refer to :

The correct answer is B)

The variation in the normal distribution

Sigma refers to the standard deviation which measures

5-5 Which of the following best defines a backorder ?

The correct answer is B)

6-1 A make-to-order manufacturing company would like to The correct answer is C)

6-4 In the manufacturing of forecast deviations, MAD is The correct answer is D)

7-4 A manufacturer in a make-to-order environment would The correct answer is A)

7-5 A master production schedule should be loaded to a The correct answer is D)

Equal to the sales forecast

8-2 In a make-to-order environment, which of the following The correct answer is D)

10-3 In a distribution requirements planning system, in-transit The correct answer is B)

10-4 Delivery lead time can be best defined as :

The correct answer is D)

A) The time elapsed between receipt of the

Delivery lead time is the actual time from the receipt of

Component lead times

The correct answer is B)

A) The manufacturing queue on the floor

11-4 Demand management

It is common in long lead time products such as

the The correct answer is A)

lot size of a typical product

14-2 Trend extrapolation is used in aggregate forecasting in The correct answer is B)

In identifying cyclical patterns

14-3 Forecast consumption can be best defined as :

The correct answer is B)

The correct answer is B)

Based on the information provided in the Tables above,

Priority sequencing rules are established to determine

Earliest operation due date

The calculation of the new forecast would be:

Using single exponential smoothing with an alpha of .10,

Issue a partial shipment

16-5 Which of the following should be forecast ?

The correct answer is C)

I. Components of a finished good

Independent demand should be forecast and dependent

is the same as a forecast

17-5 A master production schedule should be loaded to a The correct answer is A)

18-2 The projected available balance represents :

The correct answer is A)

The projected on hand inventory balance

The projected available balance (PAB) is the inventory

The range is the spread in a series of observations; from

Inaccurate lead times

Customer order backlog

Safety stock exists to protect against unknown future

21-5 Exponential smoothing techniques are desirable in a The correct answer is C)