Package Title: Test bank

Course Title: Material Planning Process

A BOM always identifies the components needed to make one unit of the finished
product.
Answer: False

Difficulty: Medium
Section: Various

A BOM is used only in the materials planning process.

Answer: False

Difficulty: Easy
Section: Various

A company has two options for procuring materials: make or buy. Which MRP data view
of the material master will the ERP system consider for this decision?

a. MRP 1
b. MRP 2
c. MRP 3
d. MRP 4
e. None of the above
Answer: b

A company would be most likely to apply consumption-based planning for which of the
following products?

a. Car
b. Brake
c. Engine
d. Printer
e. Pen
Answer: e

A processing key is a control parameter that determines how the materials in the MRP list
will be organized.
Answer: False

Difficulty: Easy
Section: Dependent Requirement Determination
A product group groups products with similar planning characteristics, such as similar
types.
Answer: True

Difficulty: Easy
Section: Product Groups

A purchase requisition is

a. A confirmation for purchasing materials.

b. Proof of delivery.
c. A document issued by a vendor.
d. A request to purchase materials.
e. A confirmation of an inbound delivery.
Answer: d

After planning the master schedule items, MRP creates dependent requirements for the
components of those items.
Answer: True

Difficulty: Medium
Section: Materials Requirements Planning

After the SOP process has generated the production plan,

a. SOP executes the plan.

b. The plan is conveyed to MRP for execution.
c. The plan is transferred to demand management.
d. SOP uses the plan to generate execution plan.
e. The plan is saved as a production version.
Answer: c

Consider the following scenario, then choose which one of the options below corresponds
to the level of CIRs and PIRs after consumption.

Before consumption:

Procurement proposal for CIRs: 50

Procurement proposal for PIRs: 50

a. CIRs: 50, PIRs: 0

b. CIRs: 50, PIRs: 50
c. CIRs: 0, PIRs: 0
d. CIRs: 0, PIRs: 50
e. CIRs: 100, PIRs: 100
Answer: a

Consumption-based planning assumes that future consumption will follow the same
patterns as current consumption.
Answer: False

Difficulty: Easy
Section: MRP Type

Consumption-based planning calculates the requirements for a material based on current

consumption data.
Answer: False

Difficulty: Easy
Section: MRP Type

Consumption-based planning derives dependent demand based on independent

requirements and exploding the BOM.
Answer: False

Difficulty: Easy
Section: Consumption Mode

Exploding the BOM refers to

a. Creating the BOM hierarchy showing all the levels of the BOM.
b. Calculating and planning requirements for materials at all levels of the BOM.
c. Executing the BOM for materials at the top level of the BOM.
d. Choosing the planning strategy for the BOM.
e. Generating multiple BOMs for materials in the same material group.
Answer: b

For externally procured materials, the planned delivery time and the GR processing time
are used to determine procurement time.
Answer: True

Difficulty: Medium
Section: Scheduling Times

Given the following information, use the net requirement calculation to calculate the
available stock.
MRP type is consumption-based planning.

Plant stock = 100

Receipts = 20
Issues = 10
Safety stock = 30

a. 120
b. 130
c. 80
d. 70
e. 110
Answer: a

Given the following information, use the net requirement calculation to calculate the
available stock.

MRP type is MPS.

Plant stock = 100

Receipts = 20
Issues = 10
Safety stock = 30

a. 120
b. 130
c. 80
d. 70
e. 110
Answer: c

Given the information below, calculate disaggregated quantities for touring bikes
(TOUR) and off-road bikes (ORBK).

Total production = 100

TOUR proportion factor = 35

ORBK proportion factor = 65

a. TOUR = 35, ORBK = 65

b. TOUR = 65, ORBK = 35
c. TOUR = 0, ORBK = 65
d. TOUR = 35, ORBK = 0
e. TOUR = 50, ORBK = 50
Answer: a

Identify the SAP ERP terms for net requirements planning and planning with final
assembly.

a. Strategy 10
b. Strategy 20
c. Strategy 30
d. Strategy 40
e. Strategy 50
Answer: a, d

Difficulty: Easy
Section: Strategy Group

Identify which of the following are processing keys:

a. Schedule lines
b. Regenerative planning
c. Net change planning
d. Purchase requisition planning
e. Planning mode
Answer: b, c

Difficulty: Medium
Section: Determine Procurement Proposal

If materials are to be procured externally, then, in the determine procurement proposal

step, MRP

a. Can create purchase requisitions.

b. Will always generate planned orders.
c. Will determine the quantity of material to procure.
d. Can create planned orders.
e. Can create schedule lines.
Answer: a, d, e

Difficulty: Medium
Section: Determine Procurement Proposal
In a scenario when the need for brakes depends on the need to produce cars,
consumption-based planning will be an appropriate strategy to use.
Answer: False

Difficulty: Medium
Section: MRP Type

In make-to-stock strategy the production of the finished goods and any needed
semifinished goods is triggered by a sales order.
Answer: False

Difficulty: Easy
Section: Strategy Group

In SAP ERP production planning strategy, net requirements planning (Strategy 10),
procurement proposals are based on

a. CIRs and components that are already in stock.

b. PIRs, with regard to CIRs.
c. PIRs, without regard to CIRs.
d. CIRs, but components are not in stock.
e. PIRs, but the components are not in stock.
Answer: c

In the determine procurement proposal step, for materials with the procurement type of
internal, MRP will:

a. Generate purchase requisitions.

b. Provide three options.
c. Prompt the MRP controller to select the appropriate production version.
d. Transfer this step to MPS.
e. Always generate planned orders.
Answer: e

In time-phased planning, materials are ordered when the stock level reaches a
predetermined level known as the reorder point.
Answer: False

Difficulty: Medium
Section: MRP Type

In-house production is the most common procurement type for raw materials.
Answer: False
Difficulty: Easy
Section: Procurement Type

Lack of overall planning may result in excess inventory and lost sales.
Answer: True

Difficulty: Easy
Section: Learning Objectives

Lot size dependent times remain the same regardless of the amount of the material being
procured.
Answer: False

Difficulty: Easy
Section: Scheduling Times

Master production scheduling is specialized form of

a. MRP.
b. Demand planning.
c. SOP.
d. Production planning.
e. Operations scheduling.
Answer: a

Material planning is concerned with answering which basic questions?

a. Which planning version should the company choose?

b. What materials are required?
c. What is the shortest time required for completing the planning?
d. When are the materials required?
e. How many materials are required?
Answer: b, d, e

Difficulty: Easy
Section: Learning Objectives

Material planning is one of the most complex processes within an organization.

Answer: True

Difficulty: Easy
Section: Learning Objectives
MPS creates planned orders for the MPS items and dependent requirements for all items
in the BOM.
Answer: False

Difficulty: Easy
Section: Materials Requirements Planning

MPS is a mandatory step in the planning process and is usually followed by MRP.
Answer: False

Difficulty: Easy
Section: MRP Type

MPS is generally appropriate for high-value items only.

Answer: True

Difficulty: Easy
Section: Materials Requirements Planning

MRP data are specific to each plant.

Answer: True

Difficulty: Easy
Section: Master Data

MRP is defined at the plant level.

Answer: True

Difficulty: Easy
Section: Material Master

MRP type specifies

a. Whether the material is produced in house or is obtained externally.

b. How material quantities for planning will be calculated.
c. The production control technique used in planning.
d. The available time periods the ERP system can use for scheduling.
e. The strategy for BOM selection.
Answer: c

MRP type specifies the production control technique used in planning.

Answer: True
Difficulty: Easy
Section: MRP Type

MRP uses requirements to generate the final procurement proposals

Answer: True

Difficulty: Easy
Section: Learning Objectives

Multiple BOMs can be created for a single material in which of the following situations?

a. The same material is produced in different plants.

b. The material is produced in the same lot sizes.
c. The material is produced in different lot sizes.
d. A bike model is upgraded with a new tire.
e. The company applies a make-to-order production planning strategy to fulfill a
customer order for a material.
Answer: a, c, d

Difficulty: Medium
Section: BOM Selection Method

Net requirements calculation is one of the steps in MRP.

Answer: True

Difficulty: Easy
Section: Materials Requirements Planning

Period lot-sizing procedures combine the requirements from multiple time periods, such
as days or weeks, into one lot.
Answer: True

Difficulty: Easy
Section: Lot Size Key

Planned orders are requests to produce materials.

Answer: True

Difficulty: Easy
Section: Learning Objectives

Planning with final assembly takes into consideration current sales orders.
Answer: True

Difficulty: Easy
Section: Strategy Group

Product routings is one of the master data elements in material planning.

Answer: True

Difficulty: Easy
Section: Master Data

Replenishment lead time is

a. The time between placing an order and receiving the materials.

b. The amount of time the routing operations will last.
c. The length of time a working center usually operates (in hrs, in one day).
d. Another term for capacity.
e. A synonym for interoperation time.
Answer: a

Requirements in the material planning process specify

a. The master data requirements.

b. How the material planning should be executed.
c. The work center capacity.
d. Requirements for the different modes of transportation.
e. How many of the materials are needed and when they are needed.
Answer: e

Requirements that are calculated based on actual and forecasted sales are known as

a. Planned independent requirements.

b. Customer-planned independent requirements.
c. Integrated independent requirements.
d. Forecast-independent requirements.
e. Customer-independent requirements.
Answer: a

Sales and operations planning involves the creation of a(n)

a. Financial document.
b. Material movement.
c. Sales forecast.
d. Operations plan.
e. Material document.
Answer: c, d

Difficulty: Medium
Section: Process

Semifinished goods are typically purchased from vendors

Answer: False

Difficulty: Easy
Section: Procurement Type

Setup time is the time required to

a. Set up the operations used in a work center.

b. Move materials from one work center to another.
c. Process materials in production.
d. Set up the work centers used in production.
e. Move materials from one storage location to another.
Answer: d

Setup time, processing time, and interoperation time are elements of

a. In-house production time.

b. Goods issue processing time.
c. Planned delivery time.
d. Goods receipt processing time.
e. Planned shipping time.
Answer: a

SOP can be either flexible or standard.

Answer: True

Difficulty: Easy
Section: Process

Storage area is one of the organizational data elements in material planning.

Answer: False

Difficulty: Easy
Section: Learning Objectives
The BOM selection method in the material master identifies the criteria the system
should use to select the BOM.
Answer: True

Difficulty: Easy
Section: BOM Selection Method

The ERP system initially uses forward scheduling and employs backward scheduling
only if forward scheduling is unsuccessful.
Answer: False

Difficulty: Easy
Section: Materials Requirements Planning

The input to MRP is the independent requirement for the finished goods.
Answer: True

Difficulty: Medium
Section: MRP Type

The lot size calculation step in MRP is used to determine whether there is a need to
procure the material.
Answer: False

Difficulty: Easy
Section: Materials Requirements Planning

The lot size independent in-house production time is used in which of the following
scenarios?

a. The lot size is fixed.

b. Processing time is constant.
c. Processing time is very short compared to the setup and interoperation times.
d. Processing time is long in comparison to the setup and interoperation times.
e. The quantity of material to be produced varies.
Answer: a, b, c

Difficulty: Difficult
Section: Scheduling Times

The lot size key specifies the

a. Optimum lot size for a group of materials.

b. Recommended lot size for a material.
c. Procedure used to determine the capacity of a storage area.
d. Lot size groups per each material type.
e. Procedure that is used to determine the lot size.
Answer: e

The main objective of material planning is

a. To minimize the expenses for storing excess inventory.

b. To balance the demand for materials with the supply.
c. To shorten the duration of the procurement cycle.
d. To eliminate excess inventory.
e. To prevent lost sales.
Answer: b

The manner in which CIRs consume PIRs is determined by the

a. Consumption type.
b. Consumption mode.
c. Consumption strategy.
d. Planning strategy.
e. Planning type.
Answer: b

The master data elements in material planning are:

a. Material masters, product types, storage location, vendors.

b. Product routings, bills of material, material masters, product groups.
c. Product types, product routings, material masters, product groups.
d. Product routings, product types, material masters, customers.
e. Material masters, storage location, product groups, product routings.
Answer: b

The money tied up in inventory best represents

a. An opportunity cost.
b. A liquid asset.
c. A strategic policy.
d. A high risk for loss.
e. A material planning strategy.
Answer: a

The most important reporting tool in material planning is the

a. Planning result report.
b. MRP list.
c. Stock overview.
d. Stock/requirements list.
e. Strategies list.
Answer: d

The MRP controller ________

a. Is a step in the planning process in which PIRs are transferred to demand management.
b. Uses variety of reports and makes adjustments to procurement proposals, as needed.
c. Transfers CIRs into PIRs.
d. Is a planning tool that generates forecasts.
e. Monitors material availability.
Answer: b, e

Difficulty: Medium
Section: Process

The MRP controller is a program in the SOP process that is responsible for creating
procurement proposals and monitoring material availability.
Answer: False

Difficulty: Easy
Section: Process

The MRP list, unlike the stock/requirements list, highlights changes to MRP elements
that have occurred since MRP was executed.
Answer: False

Difficulty: Easy
Section: MRP List

The MRP technique calculates the requirements for a material based on

a. Historical data.
b. Current data.
c. The material's dependence on other materials.
d. Material type.
e. Replenishment lead time.
Answer: c
The operations plan is an outcome of SOP.
Answer: True

Difficulty: Easy
Section: Sales and operations planning

The organizational data elements in material planning are:

a. Plant, production version, company code.

b. Planning version, company code, client.
c. Client, company code, production version.
d. Storage section, client, storage location.
e. Client, company code, plant, storage location.
Answer: e

The planning result report aggregates quantities for MRP elements to make it easier to
view the overall picture.
Answer: True

Difficulty: Easy
Section: Planning Result Report

The planning table is best defined as

a. An independent tool used for parallel execution of the SOP process.

b. An interface for transferring data into SOP.
c. An interface used to enter all the operational plans.
d. A spreadsheet-like tool used to complete the tasks in SOP.
e. A brainstorming session for selecting the most appropriate plan.
Answer: d

The proposals that material planning generates typically are in the form of

a. A planning proposal.
b. Planned orders.
c. A material order list.
d. Purchase requisitions.
e. Purchase list.
Answer: b, d

Difficulty: Easy
Section: Learning Objectives
The purpose of the materials requirements planning step is to

a. Calculate PIR.
b. Calculate CIR.
c. Calculate net requirements.
d. Generate procurement proposals (requisitions and planned orders).
e. Calculate reorder points.
Answer: c, d

Difficulty: Medium
Section: Materials Requirements Planning

The schedule lines control parameter applies to scheduling agreements.

Answer: True

Difficulty: Medium
Section: Dependent Requirement Determination

The static lot-sizing procedure

a. Combines the requirements from multiple time periods into one lot.
b. Specifies a fixed quantity based on fixed lot size.
c. Specifies a quantity that is fixed for a specific, limited time period.
d. Specifies a fixed quantity based on either fixed lot size or lot-for-lot.
e. Combines quantities for multiple time periods into several lots.
Answer: d

The stock/requirements list displays

a. Changes in the planning situation since MRP was run.

b. MRP elements at an aggregation level.
c. All MRP elements for a material.
d. Required materials per production version.
e. All materials needed per MRP element.
Answer: c

The strategy group defines the strategy the system uses to determine whether a quantity
of material will be available on a specific day.
Answer: False

Difficulty: Easy
Section: Availability Check Group
Typically, semifinished goods and raw materials have dependent requirements.
Answer: True

Difficulty: Easy
Section: MRP Type

What does SOP stand for?

a. Sales and operations planning

b. Strategic operations planning
c. Sales operations planner
d. Systems operations products
e. Sales operations projects
Answer: a

What is SOP used for?

a. Creating an operational plan and material documents

b. Calculating the financial impact of the material movements
c. Generating and executing the operations plan
d. Tracking material movements
e. Forecasting and planning
Answer: e

When a company transfers part of the materials in stock from one distribution center to
another, this scenario is known as stock-out.
Answer: False

Difficulty: Easy
Section: Learning Objectives

When using planning without final assembly, components are made to order, and the
finished product is made to stock.
Answer: False

Difficulty: Easy
Section: Strategy Group

Whether over is required depends on the production planning strategy used for the
material.
Answer: True

Difficulty: Medium
Section: Process

Which of the following are common time estimates utilized during the planning process?

a. Production planning time

b. GR processing time
c. Planned delivery time
d. Planned receiving time
e. In-house production time
Answer: b, c, e

Difficulty: Medium
Section: Scheduling Times

Which of the following are elements of the in-house production time?

a. Interoperation
b. Planned delivery
c. Processing
d. GR
e. Setup
Answer: a, c, e

Difficulty: Medium
Section: Scheduling Times

Which of the following are key organizational elements in materials planning?

a. Company code
b. Shipping point
c. Plant
d. Storage location
e. Sales area
Answer: a, c, d

Difficulty: Easy
Section: Learning Objectives

Which of the following are master data relevant to material planning?

a. Storage location
b. Bills of material
c. Material master
d. Planning version
e. Production version
Answer: b, c

Difficulty: Easy
Section: Master Data

Which of the following are possible outcomes in MRP?

a. Operations plan
b. Purchase requisitions
c. Production plan
d. Planned orders
e. Dependent requirements
Answer: b, d, e

Difficulty: Medium
Section: General

Which of the following are production control techniques as indicated by the MRP type
in the material master?

a. Consumption-based planning
b. External control
c. Internal control
d. Sales order-based planning
e. No planning
Answer: a, e

Difficulty: Easy
Section: MRP Type

Which of the following are steps in the MRP procedure?

a. Check planning file

b. Scheduling
c. Lot size calculation
d. Bins calculation
e. Storage location inspection
Answer: a, b, c

Difficulty: Medium
Section: Materials Requirements Planning
Which of the following are tasks in SOP?

a. Monitoring exceptions
b. Creating a sales plan
c. Evaluating feasibility
d. Creating revised PIRs
e. Adjusting schedules
Answer: b, c

Difficulty: Medium
Section: General

Which of the following is most likely to trigger the MRP process?

a. A periodic planning need

b. Changes to MRP elements
c. The need for an operations plan
d. Events affecting demand
e. Events affecting supply
Answer: b

Which of the following items represent demand elements of the availability check group?

a. Purchase requisitions
b. Production orders
c. Purchase orders
d. Safety stock
e. Material reservations
Answer: d, e

Difficulty: Medium
Section: Availability Check Group

Which of the following options represents categories of consumption-based planning?

a. Materials-requirement planning, time-phased planning, reorder-point planning

b. Master production scheduling, MRP, forecast-based planning
c. MRP, forecast-based planning, master production scheduling
d. Forecast-based planning, time-phased planning, reorder-point planning
e. None of the above
Answer: d
Which of the following represent procurement types?

a. Consumption-based planning
b. External
c. Section 2
d. None
e. No planning
Answer: b, d

Difficulty: Easy
Section: Procurement Type

Which of the following represent reasons why a company should maintain a safety stock?

a. The ERP system can be configured to automatically prevent inventory from falling
below the safety stock levels.
b. To avoid stock-outs
c. Maintaining a safety stock of at least 20 pieces is mandatory in the ERP system.
d. Maintaining a safety stock will guarantee that supply meets demand.
e. To avoid lost sales
Answer: a, b, e

Difficulty: Medium
Section: MRP Type

Which of the following statements about a product group are TRUE?

a. It is used to group products with similar planning characteristics.

b. Each member of a product group is assigned a group factor.
c. Materials can be members of more than one product group for different planning
scenarios.
d. A material can belong to only one product group.
e. Each member of a product group is assigned a proportion factor.
Answer: a, c, e

Difficulty: Difficult
Section: Product Groups

Which of the following statements about consumption-based planning are NOT TRUE?

a. It includes forecast-based planning as one of its categories.

b. It calculates the requirements for a material based on historical consumption data.
c. It is relatively more complicated compared with MRP.
d. It assumes that future consumption will follow the same patterns as past consumption.
e. It takes into account dependencies between different materials.
Answer: c, e

Difficulty: Difficult
Section: MRP Type

Which of the following statements about consumption-based planning is TRUE?

a. Planning is based on historical data.

b. Planning is based on exploding the BOM.
c. Dependent demand is derived from independent demand.
d. It is used for high-value materials
e. Planning is based on MPS.
Answer: a

Which of the following statements about MRP and MPS are TRUE?

a. MPS calculates requirements for all the levels of the BOM.

b. MRP calculates requirements only for the first-level items in the BOM.
c. Both MRP and MPS calculate requirements based on historical data only.
d. MRP calculates requirements for all levels of the BOM.
e. MPS calculates requirements only for the first-level items in the BOM.
Answer: d, e

Difficulty: Medium
Section: MRP Type

Which of the following statements about the MRP list are TRUE?

a. It displays static data.

b. It highlights changes to MRP elements.
c. It is the most important reporting tool.
d. The MRP controller is the only one authorized to generate it.
e. It displays MRP elements.
Answer: a, e

Difficulty: Medium
Section: MRP list
Question type: Multiple Choice

Which of the following statements about the MRP step in the material planning process
are TRUE?
a. MRP can be executed for one plant.
b. Planning for specific storage location in not possible with MRP.
c. MRP can be executed for multiple plants.
d. MRP can be executed within MRP areas.
e. MRP can only be executed manually by the MRP controller.
Answer: a, c, d

Difficulty: Medium
Section: Materials Requirements Planning

Which of the following statements best represents what procurement type indicates?

a. How a material is produced

b. Vendor's groups
c. All of the ways to procure a material the user will choose from when making a decision
d. Whether a material is produced in house, obtained externally, both, or none
e. How a vendor will be chosen in the procurement process
Answer: d

Which of the following statements concerning maintaining inventory at high levels are
TRUE?

a. The longer the materials remain in storage, the more money the company loses.
b. Maintaining high levels of inventory can lead to serious write-offs.
c. Maintaining high levels of inventory is a recommended material planning policy.
d. Maintaining high levels of inventory can incur insurance costs.
e. The company may lose money storing excessive inventory, but the customer's interest
must be the company's highest priority.
Answer: a, b, d

Difficulty: Medium
Section: Learning Objectives

Which of the following statements concerning MRP-based planning are TRUE?

a. Planning is based on historical data.

b. Planning is based on exploding the BOM.
c. Dependent demand is derived from independent demand.
d. It is used for low-value materials.
e. Planning is based on calculating a reorder point.
Answer: b, c
Difficulty: Medium
Section: Materials Requirements Planning

Which of the following statements concerning the material planning process are NOT
TRUE?

a. It can involve the creation of an operations plan.

b. The demand management step creates requirements for individual materials.
c. The final procurement proposals trigger either the production or procurement process.
d. The requirements step specifies the way the materials will be transported.
e. MRP uses sales objectives to generate the final procurement proposals.
Answer: d, e

Difficulty: Medium
Section: Learning Objectives

Which of the following statements concerning the outcome of the material planning
process are NOT TRUE?

a. The outcome can be multiple procurement proposals.

b. The outcome is always a single procurement proposal.
c. The outcome triggers the sales and operations planning step.
d. The outcome triggers the forecasting planning step.
e. The outcome can trigger either the production or the procurement process.
Answer: b, c, d

Difficulty: Medium
Section: Procurement Type

Which of the following statements regarding a BOM are TRUE?

a. A BOM identifies the components needed to make the material.

b. A BOM identifies the sequence of operations needed to make the materials.
c. A BOM component can have its own BOM.
d. A BOM identifies the material's routing strategy.
e. A BOM is plant specific.
Answer: a, c, e

Difficulty: Medium
Section: General

Which of the following statements regarding MRP are TRUE?

a. Planning is executed for only the first level of the material's BOM.
b. MRP can be executed for one plant only.
c. MRP can result in planned orders.
d. MRP can result in purchase orders.
e. MRP can be executed for a single level or multiple levels of the BOM.
Answer: c, e

Difficulty: Medium
Section: Materials Requirements Planning

Which of the following statements regarding the MRP views of the material master are
TRUE?

a. There are four MRP data views.

b. The system uses the MRP 4 view to select the correct BOM.
c. There are three MRP data views.
d. The system uses the MRP 3 view to determine how to procure materials (make vs.
buy).
e. The system uses the MRP 1 view to select the correct BOM.
Answer: a, b
con
Difficulty: Medium
Section: Master Data

Work scheduling data are defined at the client level.

Answer: False

Difficulty: Easy
Section: Master Data