MRP, Procurement & Inventory Modules Flashcards
7 cards from real ERP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 MRP, Procurement & Inventory Modules flashcards as text
Which costing method maintains a predetermined cost for materials regardless of actual purchase price fluctuations?
Answer: Standard costing
Standard costing sets a fixed cost per unit in advance; variances between standard and actual costs are tracked separately for analysis.
In MRP, 'pegging' refers to the ability to:
Answer: Trace a component requirement back to the specific parent demand that created it
Pegging links lower-level component requirements upward through the BOM to the specific sales order or forecast that drove the demand.
What is 'lot-for-lot' (L4L) lot sizing in MRP?
Answer: Ordering exactly the net requirement quantity for each planning period, no more and no less
Lot-for-lot produces or purchases exactly what is needed each period, minimizing carrying costs but potentially increasing ordering or setup costs.
A purchase requisition differs from a purchase order in that a purchase requisition:
Answer: Is an internal request to the procurement department to initiate a purchase
A purchase requisition is an internal document requesting that procurement create a PO; it has no legal standing with the vendor.
In inventory management, 'dead stock' is best described as:
Answer: Items that are obsolete, no longer needed, and unlikely to be used or sold
Dead stock refers to inventory that has no foreseeable demand and continues to consume storage space and capital without contributing value.
What does 'safety lead time' add to the MRP calculation?
Answer: Additional time buffer to account for supplier delivery variability
Safety lead time causes MRP to schedule planned receipts earlier than technically needed, creating a time buffer against late supplier deliveries.
In an ERP system, 'goods issue' in the context of manufacturing typically refers to:
Answer: Transferring raw materials from inventory to the production floor for a manufacturing order
A goods issue for a production order reduces warehouse inventory and records the material consumption associated with manufacturing.