Practice Test GeeksERP - Management Practice Test
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Materials 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 Materials flashcards as text

  1. In ERP materials management, what is 'ABC analysis' used for?

    Answer: Prioritizing inventory items by their consumption value to focus control efforts

    ABC analysis categorizes inventory into A (high value/low volume), B (medium), and C (low value/high volume) groups to apply differentiated management controls.

  2. What does 'safety stock' represent in an ERP inventory planning system?

    Answer: Buffer inventory held to protect against demand variability and supply delays

    Safety stock is extra inventory held beyond average demand to prevent stockouts caused by demand spikes or supplier lead time variability.

  3. Which ERP transaction is used to move materials between two storage locations within the same plant without changing ownership?

    Answer: Stock transfer posting

    A stock transfer posting moves materials between storage locations or plants within the same company without creating a financial ownership change.

  4. What is a 'consignment inventory' arrangement in ERP procurement?

    Answer: Inventory owned by the vendor until the buyer consumes or sells it

    In consignment arrangements, the vendor retains ownership of goods stored at the buyer's location, and the buyer only pays upon consumption.

  5. In the context of ERP MRP, what is a 'planned order'?

    Answer: A system-generated procurement or production proposal that can be converted or cancelled

    Planned orders are MRP-generated proposals for purchasing or manufacturing that exist only in the system until a planner converts them to firm orders.

  6. What is the purpose of a 'material master' record in ERP?

    Answer: Centralizing all data about a material used across procurement, production, and inventory

    The material master is the single source of truth for all material attributes including purchasing data, storage details, costing information, and MRP parameters.

  7. What is 'lot sizing' in ERP MRP planning?

    Answer: The rule that determines how much to order or produce when a requirement is identified

    Lot sizing rules (e.g., fixed quantity, economic order quantity, lot-for-lot) determine the procurement or production quantity MRP proposes to cover a net requirement.