MRP Data Analysis & System Implementation 3 — Questions and Answers
Question 1: In MRP analysis, what does a 'firm planned order' (FPO) allow a planner to do that a standard planned order does not?
- Automatically convert to a purchase order
- Prevent the MRP system from automatically rescheduling the order (Correct answer)
- Trigger a capacity requirements planning run
- Override vendor lead times
Correct answer: Prevent the MRP system from automatically rescheduling the order
A firm planned order is manually fixed by the planner, preventing the MRP system from changing its quantity or due date during regeneration.
Question 2: Which MRP processing method recalculates requirements only for items affected by changes since the last MRP run?
- Regenerative MRP
- Net change MRP (Correct answer)
- Full BOM explosion
- Capacity requirements planning
Correct answer: Net change MRP
Net change MRP processes only items with transactions or changes since the last run, making it faster and more efficient than a full regeneration.
Question 3: A planner is analyzing an MRP exception report showing 'reschedule in' messages. What action does this exception recommend?
- Cancel an existing open order because demand has decreased
- Move an existing order to an earlier date to meet demand sooner (Correct answer)
- Create a new planned order for a future requirement
- Increase the safety stock level for the item
Correct answer: Move an existing order to an earlier date to meet demand sooner
'Reschedule in' exceptions occur when an existing order's due date is later than when the requirement is needed, prompting the planner to expedite the order.
Question 4: Which data analysis technique is most useful for identifying the root cause of chronic MRP inaccuracies in a specific product family?
- ABC analysis by dollar value
- Pareto analysis of planning exceptions by item (Correct answer)
- Cycle counting frequency analysis
- Safety stock optimization modeling
Correct answer: Pareto analysis of planning exceptions by item
Pareto analysis identifies which items generate the most exceptions, focusing improvement efforts on the 20% of items causing 80% of MRP inaccuracies.
Question 5: During MRP implementation, a team decides to use a pilot approach rather than a 'big bang' cutover. What is the primary advantage of this strategy?
- It eliminates the need for user training
- It reduces implementation risk by testing with a subset of items or locations first (Correct answer)
- It allows the legacy system to be decommissioned immediately
- It lowers software licensing costs
Correct answer: It reduces implementation risk by testing with a subset of items or locations first
A pilot implementation limits exposure by validating system performance, data integrity, and user adoption on a smaller scope before full deployment.
Question 6: An MRP system shows available inventory going negative in week 3 for a component. What does this indicate?
- The item has excess inventory that should be disposed of
- Demand exceeds supply in that period, creating a shortage (Correct answer)
- The safety stock level has been reached
- The item is being phased out of production
Correct answer: Demand exceeds supply in that period, creating a shortage
Negative projected available balance means cumulative demand exceeds cumulative supply in that period, signaling an unmet requirement.
Question 7: Which key performance indicator best measures the effectiveness of MRP implementation in reducing inventory investment?
- Customer order fill rate
- Inventory days of supply (DOS) (Correct answer)
- Manufacturing overhead absorption rate
- Supplier on-time delivery percentage
Correct answer: Inventory days of supply (DOS)
Days of supply measures how many days current inventory levels can sustain demand, directly reflecting whether MRP is right-sizing inventory investment.
MRP Data Analysis & System Implementation 3
In MRP analysis, what does a 'firm planned order' (FPO) allow a planner to do that a standard planned order does not?