MRP Data Analysis & System Implementation 2 — Questions and Answers
Question 1: When analyzing MRP output, a planner notices that planned orders are being generated for items already in stock above safety stock levels. What is the most likely cause?
- Incorrect lead times in the item master
- The safety stock level is set higher than the on-hand quantity (Correct answer)
- Lot sizing rules are creating excess demand
- The BOM is missing a component
Correct answer: The safety stock level is set higher than the on-hand quantity
When safety stock exceeds on-hand inventory, MRP interprets the gap as a net requirement and generates planned orders to replenish up to the safety stock level.
Question 2: A company wants to evaluate the accuracy of its MRP system after implementation. Which metric directly measures how well the system predicted actual demand?
- Inventory turnover ratio
- Mean absolute percentage error (MAPE) of demand forecasts (Correct answer)
- On-time delivery rate to customers
- Manufacturing cycle time
Correct answer: Mean absolute percentage error (MAPE) of demand forecasts
MAPE measures the average percentage deviation between forecasted and actual demand, directly assessing MRP forecast accuracy.
Question 3: During MRP system implementation, which data element must be verified for every purchased item to ensure accurate planned order release dates?
- Standard cost
- Vendor lead time (Correct answer)
- Item weight and dimensions
- ABC classification
Correct answer: Vendor lead time
Vendor lead time offsets planned order releases backward from the need date so materials arrive in time; inaccurate lead times directly cause late or premature orders.
Question 4: An MRP analyst is reviewing pegging data. What does pegging allow the analyst to determine?
- The total cost of a manufactured item
- The source demand driving a specific planned order (Correct answer)
- The optimal reorder point for an item
- The vendor with the shortest lead time
Correct answer: The source demand driving a specific planned order
Pegging traces a planned order upward through the BOM to identify which parent demand or sales order created the requirement.
Question 5: Which type of data cleansing activity is most critical before going live with an MRP system?
- Archiving old financial records
- Reconciling on-hand inventory balances to physical counts (Correct answer)
- Deleting inactive customer accounts
- Updating employee training records
Correct answer: Reconciling on-hand inventory balances to physical counts
Inaccurate on-hand balances directly corrupt MRP net requirement calculations, so physical inventory reconciliation is essential before go-live.
Question 6: A company uses period order quantity (POQ) as its lot sizing rule. If the POQ interval is 4 weeks and net requirements are 50, 0, 30, and 20 units over those weeks, what is the planned order quantity?
- 50 units
- 80 units
- 100 units (Correct answer)
- 30 units
Correct answer: 100 units
POQ aggregates all net requirements within the specified interval (50+0+30+20=100), placing one order to cover the entire period.
Question 7: When implementing MRP, a project team discovers that 30% of BOMs have not been updated in over two years. What is the recommended corrective action before system go-live?
- Proceed with go-live and update BOMs post-implementation
- Conduct a BOM audit and update all structures to reflect current production processes (Correct answer)
- Exclude affected items from the MRP run temporarily
- Increase safety stock to compensate for BOM inaccuracies
Correct answer: Conduct a BOM audit and update all structures to reflect current production processes
Outdated BOMs cause MRP to plan for wrong components or quantities, so a pre-go-live audit and correction is essential for system integrity.
MRP Data Analysis & System Implementation 2
When analyzing MRP output, a planner notices that planned orders are being generated for items already in stock above safety stock levels.
What is the most likely cause?