MRP Inventory Control & Supply Chain Management 4

Question 1

A company has average inventory of $500,000 and COGS of $3,000,000. What are the days of supply (DOS)?

Accepted Answer

60 days

Answer

DOS = (Average Inventory / COGS) × 365 = ($500,000 / $3,000,000) × 365 ≈ 60.8 days.

Question 2

In MRP systems, what is the 'planning horizon'?

Accepted Answer

The time period covered by the production and procurement plan

Answer

The planning horizon is the total future time period that the MRP plan covers, typically set to encompass the longest cumulative lead time plus buffer.

Question 3

Which supply chain model uses a 'pull' system where production is triggered only by actual customer demand?

Accepted Answer

Make-to-order (MTO)

Answer

Make-to-order uses a pull system where manufacturing begins only after a confirmed customer order, avoiding finished goods inventory buildup.

Question 4

What is 'collaborative planning, forecasting, and replenishment' (CPFR) designed to achieve?

Accepted Answer

Improve supply chain performance through buyer-supplier data sharing

Answer

CPFR enables trading partners to jointly develop forecasts and replenishment plans by sharing sales data, promotional plans, and inventory information.

Question 5

A product has a 30-day average lead time with a standard deviation of 5 days, and average daily demand is 100 units. At a 95% service level (z=1.645), what is the approximate safety stock?

Accepted Answer

822 units

Answer

Safety stock = z × σ_LT × d = 1.645 × 5 × 100 = 822.5 ≈ 822 units, accounting only for lead time variability.

(MRP) MRP Certified Agents Practice Test

(MRP) MRP Certified Agents Practice Test

MRP Inventory Control & Supply Chain Management 4