ERP MRP, Procurement & Inventory Modules 3

Question 1

What is the 'planning horizon' in MRP?

Accepted Answer

The farthest future date for which MRP generates planned orders

Answer

The planning horizon is the total time span into the future that MRP covers when generating planned orders and material requirements.

Question 2

A three-way match in accounts payable compares which three documents?

Accepted Answer

Purchase Order, Goods Receipt, and Vendor Invoice

Answer

The three-way match validates that the PO, goods receipt, and vendor invoice agree on quantities, prices, and terms before approving payment.

Question 3

In inventory valuation, which costing method assigns the most recent purchase cost to items sold?

Accepted Answer

LIFO (Last In, First Out)

Answer

LIFO assumes the last items purchased are the first sold, so cost of goods sold reflects the most recent purchase prices.

Question 4

What does 'available-to-promise (ATP)' functionality in an ERP system tell you?

Accepted Answer

The quantity of a product that can be committed to a new customer order based on supply and demand

Answer

ATP calculates uncommitted inventory plus planned receipts minus existing demand to determine what quantity can be promised for new orders.

Question 5

Which inventory control technique classifies items into three tiers based on annual consumption value?

Accepted Answer

ABC analysis

Answer

ABC analysis categorizes inventory so that A-items (high value) receive tighter controls, while C-items (low value) are managed with less oversight.

(ERP) Enterprise Resource Planning Certified Practice Test