ERP Materials 2

Question 1

Which ERP module functionality triggers an automatic purchase requisition when inventory falls below the reorder point?

Accepted Answer

MRP (Material Requirements Planning)

Answer

MRP monitors stock levels and automatically generates purchase requisitions when inventory drops below the defined reorder point.

Question 2

In ERP materials management, what does the term 'goods receipt' refer to?

Accepted Answer

Recording the physical arrival of purchased materials into the warehouse

Answer

A goods receipt is the formal ERP transaction that records purchased materials arriving at the warehouse and updates inventory accordingly.

Question 3

What is a 'blanket purchase order' in ERP procurement?

Accepted Answer

A long-term agreement allowing multiple deliveries up to a set quantity or value

Answer

A blanket PO is a long-term contract with a vendor that permits multiple partial deliveries against a pre-agreed total quantity or spend.

Question 4

Which costing method assigns the cost of the most recently purchased inventory to goods sold first?

Accepted Answer

LIFO

Answer

LIFO (Last-In, First-Out) assumes the most recently purchased items are the first to be consumed or sold.

Question 5

In ERP, what is the purpose of a 'material ledger'?

Accepted Answer

Recording actual costs for materials and enabling actual costing at period end

Answer

The material ledger captures all price and quantity variances during the period and allows calculation of actual material costs at period close.

ERP - Management Practice Test