MRP, Procurement & Inventory Modules Flashcards

In MRP, what does the term 'time bucket' refer to?

Answer: The unit of time used to organize planning periods in the MRP schedule

A time bucket is the planning period unit (day, week, or month) used to organize MRP demand and supply calculations.

Which procurement document is typically issued to a vendor after a purchase order is accepted, confirming shipment details?

Answer: Advance Shipment Notice (ASN)

An ASN is sent by the vendor before delivery to notify the buyer of shipment details such as contents, quantities, and expected arrival.

What is 'phantom assembly' in MRP?

Answer: A subassembly that exists only in the BOM and is never stocked as a discrete item

A phantom assembly is a BOM level that represents a transient subassembly passed through directly to the parent without being stocked.

Under a consignment inventory arrangement, when does title (ownership) of inventory typically transfer to the buyer?

Answer: When the buyer consumes or sells the goods

In consignment arrangements, the supplier retains ownership until the buyer uses or sells the goods, at which point title transfers.

What is the primary purpose of a 'blanket purchase order' in procurement?

Answer: To establish a long-term agreement for recurring purchases at pre-negotiated terms

A blanket PO covers multiple deliveries of the same item over a period at agreed pricing, reducing administrative overhead.

In inventory management, what does 'cycle counting' replace or supplement?

Answer: Annual physical inventory counts

Cycle counting replaces or supplements disruptive annual physical counts by continuously counting small subsets of inventory on a rotating schedule.

Which MRP input is used to account for production inefficiencies and yield losses when calculating component requirements?

Answer: Scrap factor (yield percentage)

The scrap or yield factor inflates component requirements to compensate for expected losses during the manufacturing process.