ERP Business Processes 4 — Questions and Answers
Question 1: Which ERP business process is triggered when a manufacturer identifies a shortage of components needed to fulfill a production order?
- Material Requirements Planning (MRP) run (Correct answer)
- Demand transfer to Sales and Distribution
- Goods issue from finished goods warehouse
- Customer credit check in Order Management
Correct answer: Material Requirements Planning (MRP) run
MRP analyzes production requirements against stock levels and generates procurement or production proposals to cover shortfalls.
Question 2: In an ERP system, 'workflow' automation in business processes primarily helps organizations by:
- Routing tasks to the right people and enforcing approval hierarchies automatically (Correct answer)
- Scheduling database maintenance jobs overnight
- Generating customer invoices in batch mode
- Compressing data to reduce storage requirements
Correct answer: Routing tasks to the right people and enforcing approval hierarchies automatically
ERP workflow automation routes tasks, documents, and approvals to designated users based on predefined rules, ensuring process consistency.
Question 3: What distinguishes a 'make-to-order' (MTO) production strategy from 'make-to-stock' (MTS) in an ERP context?
- MTO production is triggered by a specific customer order, while MTS produces to forecasted demand (Correct answer)
- MTO uses fewer raw materials than MTS production runs
- MTO requires no bill of materials, unlike MTS
- MTO is only used for service industries, not manufacturing
Correct answer: MTO production is triggered by a specific customer order, while MTS produces to forecasted demand
In MTO, each production order is tied to a specific customer sales order, while MTS produces inventory in anticipation of demand.
Question 4: A 'chart of accounts' in an ERP system serves as:
- A structured list of general ledger accounts used to record all financial transactions (Correct answer)
- A summary of customer account balances
- A directory of vendor payment terms and bank details
- A mapping of cost centers to business units
Correct answer: A structured list of general ledger accounts used to record all financial transactions
The chart of accounts defines all G/L accounts available for posting financial transactions within a company code.
Question 5: In ERP human resources processes, what is 'organizational management' responsible for?
- Defining the company's reporting structure, positions, and job roles in the system (Correct answer)
- Processing payroll and tax deductions for employees
- Managing employee travel expense reimbursements
- Tracking employee training completion records
Correct answer: Defining the company's reporting structure, positions, and job roles in the system
Organizational management in ERP HR defines the hierarchy of organizational units, positions, and reporting relationships.
Question 6: Which ERP process concept describes the end-to-end flow from identifying a business need to purchasing goods and paying the supplier?
- Procure-to-Pay (P2P) (Correct answer)
- Order-to-Cash (O2C)
- Hire-to-Retire (H2R)
- Idea-to-Market (I2M)
Correct answer: Procure-to-Pay (P2P)
Procure-to-Pay encompasses the full purchasing cycle from requisition creation through supplier payment.
Question 7: When implementing ERP, 'data migration' refers to:
- Transferring master data and transactional history from legacy systems into the new ERP (Correct answer)
- Moving ERP servers to a cloud data center
- Exporting ERP reports to spreadsheet format for analysis
- Copying configuration settings from a test system to production
Correct answer: Transferring master data and transactional history from legacy systems into the new ERP
Data migration involves extracting, transforming, and loading existing business data from old systems into the ERP before go-live.
ERP Business Processes 4
Which ERP business process is triggered when a manufacturer identifies a shortage of components needed to fulfill a production order?