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

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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 (Vollmann, Berry, and Whybark, Manufacturing Planning production plan and Control Systems, Chapter 6). D) Setting the MPS at the component level

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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 (Vollmann, Berry, and Whybark, Manufacturing Planning D) Costed work center standards and Control Systems, Chapter 6).

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

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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

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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 variation in the normal distribution The standard deviation The absolute deviation None of the above

The correct answer is B) 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 D) None of the above

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 correct answer is B) 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."

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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

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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

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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 ? The final assembly schedule is the actual build schedule 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

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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) ,

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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 D) None of the above purchase or make the part.

10-4 Delivery lead time can be best defined as : A) The time elapsed between receipt of the 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 D) None of the above

The correct answer is D) 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 The correct answer is C) 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

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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 D) None of the above The correct answer is B) It is common in long lead time products such as airplanes, to have large backlogs which manufacturing works to.

11-4 Demand management following functions?

encompasses

which

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. Forecasting II. Order entry III. Master Production Scheduling A) B) C) D) 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

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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

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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) 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) , , , I and II I and III II and III I, II, and III The correct answer is 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

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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 (Vollmann, Berry, and Whybark, Manufacturing Planning and Control Systems, Chapter 7).

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

The correct answer is B) 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) I only II only Both I and II Neither I nor II

A) accurate as the numbers are numbers. Forecasts which try to future tend to be less accurate.

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

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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) Available-to-promise logic Measurement of forecast error Consuming the forecast Time fencing

15-4

The correct answer is B) 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

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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) Earliest operation due date Least slack rule Latest part due date Shortest operation time 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 Control Systems, Chapter 5).

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) I and II I and III II and III I, II, and III

The correct answer is C) 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.

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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).

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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 projected on hand inventory balance The uncommitted portion of the inventory The leadtime necessary to produce Either cumulative or per period data

The correct answer is A) 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) 20 30 40 50 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.

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. (Vollmann, Berry, and Whybark, Manufacturing Planning and Control Systems, Chapter 4).

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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) , ,

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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 D) None of the above 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

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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) , ,

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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 B) , D) ,

A) , C) , ,

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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) , The correct answer is D) All of the above are included, plus production planning, shop floor control activities, and financial systems.

23-2 Which of the following are included in a closed loop MRP system ? 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) Spare service parts Maintenance requirements for equipment Finished-good demand at the retailed location Components of a finished good

D)

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

The correct answer is A)

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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

The correct answer is C)

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 D) None of the above

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 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

The correct answer is B) 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.

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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 correct answer is A) 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

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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 correct answer is B) The median is the MIDDLE value where half the values are above and half the values are below the median.

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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 B) , D) , ,

A) , C) , ,

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

The correct answer is D) 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

The correct answer is A)

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

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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 D) I, 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.

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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

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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

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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

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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.

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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 The correct answer is D) 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 (Vollmann, Berry, Whybark, Manufacturing Planning and Avail-to-Promise Control Systems, Chapter 6). 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

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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

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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 B) , D) ,

A) C) , ,

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

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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) ,

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Problem

Solution The correct answer is C) The standard deviation is equal to 1.25 MAD. MAD is a simpler formula to use in calculating the safety stock.

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

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

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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

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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 The correct answer is A) 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.

39-2 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 D) None of the above

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) , , The correct answer is C)

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

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Problem

Solution The correct answer is B) 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.

40-1 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

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 D) None of the above

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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 B) , D) ,

A) , C) , ,

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 D) None of the above

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

The correct answer is A) 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.

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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 The correct answer is C) 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 The correct answer is A)

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 D) None of the above

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

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Problem

Solution The correct answer is A) 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.

43-1 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 D) None of the above

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

The correct answer is C)

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. (Vollmann, Berry, Whybark, Manufacturing Planning and Control Systems, Chapter 8).

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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) ,

The correct answer is A)

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 D) None of the above

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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 The correct answer is B) A backorder is an unfilled customer order which will be shipped at a later date.

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

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. D) I, II, III, and IV 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.

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Problem

Solution The correct answer is C) A bill of resources displays the required capacity and key resources needed to manufacture one unit of a product or family.

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

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

The correct answer is B)

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 B) , D) , ,

The correct answer is B)

A) , C) , ,

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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 B) , D) , ,

A) , C) , ,

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

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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

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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 D) Setting the MPS at the component level

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) I and II I and III II and III I, II, and III

49-3

PERIOD 1 2 3 4

ACTUAL DEMAND FORECAST 120 100 120 120 100 130 110 140

The correct answer is A) 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 The correct answer is C)

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

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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) 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) , I and II I and III II and III I, II, and III The correct answer is B)

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.

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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) ,

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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

The correct answer is C) 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.

52-3 Which item should be master schedule ? A) B) C) D) End item in a make-to-order environment Items which use critical resources Items with short product lead times Items which have low costs

The correct answer is B)

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 D) I, II, III, and IV 52-5 Reason to master schedule include . . . . Stabilization of material plans Increase expediting Managing key resources Reducing communication among principal staff B) , D) , , The correct answer is B)

A) C) , ,

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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

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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 The correct answer is B) . 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. (Vollmann, Berry, and Whybark, Manufacturing Planning and Control Systems, Chapter 7).

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 D) I, II, III, and IV

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Problem

Solution The correct answer is B)

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

55-2

PERIOD 1 2 3 4

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 The correct answer is A)

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. (Vollmann, Berry, Whybark, Manufacturing Planning and Control Systems, Chapter 14). 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) , , The correct answer is B)

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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 : A) Average of a group of values B) Middle value of a group of values C) Most common or frequent value in a group of values D) Sum of the deviations divided by the number of values

The correct answer is A) 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 B) , D) , , , .

A) , C) ,

56-4 The production plan responsibility rests with : A) B) C) D) Material manager Top management V.P. Manufacturing V.P. Finance

The correct answer is B) 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)

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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 The correct answer is C) . 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) which of the following ? 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 The correct answer is A)

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 D) None of the above

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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. (Fogarty, Blackstone and Hoffmann, Production and Inventory Management, Chapter 1). 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 D) None of the above

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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

The correct answer is C) 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 the

D) 42 The correct answer is D)

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 B) , , D) ,

A) , C) ,

59-5 Available-to-promise represents : A) B) C) D) The projected on hand inventory balance The uncommitted portion of the inventory The leadtime necessary to produce Cumulative data only

The correct answer is B) 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.

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Problem

Solution The correct answer is B) 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.

60-1 An aggregate forecast can be best defined as : 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. D) I, II, III, and IV 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 The correct answer is C)

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.

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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) I and II I and III II and III I, II, and III Forecast errors which sum to zero would indicate no bias. Forecasts which tend to be high or low are said to exhibit bias.

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

The correct answer is C)

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Problem

Solution The correct answer is A) 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.

62-1 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

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

The correct answer is C)

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. assembly leadtime is firm III. In assemble-to-order production environments, assembly leadtime is firm 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.

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Problem

Solution The correct answer is C) The mode is the MOST frequent value in a group of values.

63-1 The mode 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 in a group of values D) Sum of the deviations divided by the number 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 B) and only D) and only

A) only C) , 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

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Problem

Solution The correct answer is D) 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.

64-1 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

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) ,

The correct answer is A)

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

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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 B) , D) , ,

A) , C) , ,

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 (Vollmann, Berry, and Whybark, Manufacturing Planning and Control Systems, Chapter 6).

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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) I and II I and III I, II and III I, III and IV The master scheduler should adjust the load by shifting resources to work centers, moving requirements to different time periods, or outsourcing production.

66-2 In resource planning, a bill of resources is based on The correct answer is B) which of the following ? 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 (Vollmann, Berry, and Whybark, Manufacturing Planning and Control Systems, Chapter 4).

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.

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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 ? 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).

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.

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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. (Fogarty, Blackstone and Hoffmann, Production and Inventory Management, Chapter 1).

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.

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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 (Vollmann, Berry, and Whybark, Manufacturing Planning production plan and Control Systems, Chapter 6). D) Setting the MPS at the component level

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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 (Vollmann, Berry, and Whybark, Manufacturing Planning D) Costed work center standards and Control Systems, Chapter 6).

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 : 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.

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

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