INFO 620 Exam 2 Study Guide

organizational elements unique to the fulfillment process

the meaning of a distribution channel

the meaning of a plan in the fulfillment process

the meaning of a division in the fulfillment process

the meaning of a shipping point in the fulfillment process

the customer master views in the fulfillment process

the material master views in the fulfillment process

the steps in the fulfillment process

What are included in the pre-sales activity?

What is the processing time?

What is a planned order?

the meaning of a work center in the pp process

At what level are material requirements planning (MRP) and work scheduling data defined?

If a company has adopted the make-to-stock strategy, what is the trigger for the production
of goods?
the meaning of procurement type

what is consumption-based planning?

What does Exploding the BOM refer to?

The types of Lot-sizing

The list of steps in the procurement process

Identify the steps in the procurement process for which an FI document is created.

Identify the steps in the fulfillment process for which an FI document is created.
What are the GL entries when a customer invoice is generated?

Identify the step in the procurement process for which a material document is created.
Identify the step in the fulfillment process for which a material document is created.
What is the FI effect of a goods receipt posting in the external procurement process?

What is the general ledger impact of the goods issue step in the fulfillment process?
What is the CO impact in the confirmation step of the production process?

Different types of documents are created as part of transactions in the SAP ERP system
transaction, material and accounting documents.
For each type of document, provide an example to demonstrate
(1) what triggers that document type to be created
(2) the main information captured in the example you use
AAA Carpet Discount Store in North Georgia stocks carpet in its warehouse and sells it through an
adjoining showroom. The store keeps several brands and styles of carpet in stock; however, its biggest
seller is Super Shag carpet. The store wants to determine the optimal order size and total inventory
cost for this brand of carpet given an estimated annual demand of 10,000 yards of carpet, annual
carrying cost of $0.75 per yard and an ordering cost of $150.

1) What is the optimal order size if the company follows the fixed-order quantity (EOQ)
inventory model.
Answer: Q*= sqrt {2 DS/H } = sqrt {2(150)(10,000)/(0.75)}= 2,000
2) What is the number of orders per year with the optimal order size?
Answer: Number of orders = D/Q = 10,000/2,000 = 5orders
3) What is the average inventory level with the optimal order size?
Answer: Q/2 = 1,000 yards
For the AAA Discount Carpet Sore (in the Question above), we will assume that daily demand
for Super Shag carpet stocked by the store is normally distributed with an average daily demand
of 30 yards and a standard deviation of 5 yards of carpet per day. The lead time for receiving a
new order of carpet is 10 days. The costs of purchasing, carrying, and ordering do not change.
(Purchasing cost of $8 per yard, annual carrying cost of $0.75 per yard, and an ordering cost of
$150)

1) What is the standard deviation of the demand during the lead time?
Answer: std dev of DLT = sqrt(L) * sigma_d = sqrt(10) * (5) = 15.81
2) What is the safety stock if the store wants a service level of 97.5% with the probability of a
stockout equal to 2.5 %
Answer: z = 1.96

ss = 1.96 * 15.81 = 31

3) What is the approximate reorder point if the store wants a service level of 95%?
Answer:

z= 1.64

d_bar L+ ss = 300 + (1.64) (5) (sqrt(10)) = 326.1 yards ~ 327 yards

Complete the MRP Matrix

B (2)

C (1)

C (3)

E (2)

A
B
C
D
E

D (1)

E (1)

Lead Times:
Lot Size:
1 week
LFL
2 weeks
LFL
1 week
50
3 weeks
100
1 week
At least 75

On Hand:
-15
-50
--

C (2)
Demand:
180 parts of A in Week 10
25 spares of C in Week 5
30 spares of E in Week 4

Scheduled Receipts:
15 parts of C in week 7
50 parts of A in week 5

Lot sizes:
LT:
Gross Requirements
Scheduled Receipts
Ending Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases

Period
5
6

10

Lot sizes:
LT:
Gross Requirements
Scheduled Receipts
Ending Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases

Period
5
6

10

Lot sizes:
LT:
Gross Requirements
Scheduled Receipts
Ending Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases

Period
5
6

10

Lot sizes:
LT:
Gross Requirements
Scheduled Receipts
Ending Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases

Period
5
6

10

Lot sizes:
LT:
Gross Requirements
Scheduled Receipts
Ending Inventory
Net Requirements
Planned Order Receipts
Planned Order Releases

Period
5
6

10

Period

Gross Requirements
Scheduled Receipts
A
LT =
Projected on Hand (ending)=0
1
Net Requirements
Lot size = Planned Order Receipts

10

Item

LFL

180
0

50
50

50

50

50

Planned Order Releases

Gross Requirements
Scheduled Receipts
LT =
Projected on Hand (ending)=15
2
Net Requirements
Lot size = Planned Order Receipts

50

0
130
130

130

Item

260

LFL

15

15

15

15

15

15

Planned Order Releases

Gross Requirements
Scheduled Receipts
LT =
Projected on Hand (ending)=0
1
Net Requirements
Lot size = Planned Order Receipts

25

200

25
25
50

25
175
200

50

200

250

Planned Order Releases

Gross Requirements
Scheduled Receipts
LT =
Projected on Hand (ending)=50
3
Net Requirements
Lot size = Planned Order Receipts

15

0
245
245

245

Item

X50

15

245
15
45
205
250

390
45

5
345
350

350

Item

130

X100

50

50

50

50

50

Planned Order Releases

Gross Requirements
Scheduled Receipts
LT =
Projected on Hand (ending)=0
1
Net Requirements
Lot size = Planned Order Receipts

50

50

50

20
80
100

20

100

Item

30

100

490

45

20
55
75

0
470
470

75

470

>=75

Planned Order Releases

75

45
30
75