MRP Material Requirements Planning Fundamentals 5 — Questions and Answers
Question 1: A buyer notices that MRP has generated planned orders for a purchased item even though sufficient on-hand stock exists. The most likely cause is:
- An incorrect low-level code assignment
- Inaccurate inventory records overstating on-hand quantities (Correct answer)
- The lot-sizing rule requiring a minimum order quantity
- An expired supplier contract reducing available supply
Correct answer: Inaccurate inventory records overstating on-hand quantities
If inventory records are inaccurate and overstate on-hand stock, the physical stock may actually be lower, causing unplanned shortages that MRP did not anticipate.
Question 2: Which metric directly measures the accuracy of inventory records critical to MRP performance?
- Inventory turnover ratio
- Inventory Record Accuracy (IRA) (Correct answer)
- Fill rate percentage
- Days of supply on hand
Correct answer: Inventory Record Accuracy (IRA)
Inventory Record Accuracy (IRA) measures what percentage of item records match the physical count, and high IRA (typically ≥95%) is essential for valid MRP output.
Question 3: What is the purpose of 'time buckets' in a traditional MRP planning grid?
- To group suppliers by delivery frequency
- To define the time periods (days, weeks) across which requirements and receipts are planned (Correct answer)
- To categorize inventory by ABC classification
- To allocate machine capacity across shifts
Correct answer: To define the time periods (days, weeks) across which requirements and receipts are planned
Time buckets are the discrete planning periods (commonly weeks) displayed across an MRP planning record, showing requirements, receipts, and on-hand balances over the horizon.
Question 4: When the same component appears at multiple levels of a BOM, the correct approach in MRP is to:
- Plan it separately at each BOM level it appears
- Consolidate all demand at its lowest-level code before planning (Correct answer)
- Create a phantom assembly to simplify its planning
- Assign it to the highest BOM level for ordering purposes
Correct answer: Consolidate all demand at its lowest-level code before planning
Low-level coding consolidates all demand for a common part at its lowest BOM level so MRP nets and plans it once rather than creating duplicate orders.
Question 5: Which scenario best illustrates the concept of 'offsetting' in MRP?
- Subtracting on-hand inventory from gross requirements
- Scheduling a planned order release earlier than the need date by the item's lead time (Correct answer)
- Reducing order quantity when a quantity discount is available
- Transferring demand from a slow-moving item to a substitute
Correct answer: Scheduling a planned order release earlier than the need date by the item's lead time
Offsetting means the system backs off the planned order release date from the requirement date by the item's lead time to ensure timely arrival.
Question 6: A planner is reviewing an MRP exception message to 'cancel' a scheduled receipt. This message indicates that:
- The order quantity is too small to cover projected demand
- The open order is no longer needed because demand has been reduced or eliminated (Correct answer)
- A quality hold has been placed on the incoming shipment
- The supplier has requested a change to the delivery date
Correct answer: The open order is no longer needed because demand has been reduced or eliminated
A cancel exception message means that projected inventory is sufficient without the order, so the open order is now excess and should be cancelled to avoid overstocking.
Question 7: In the context of MRP, 'bucketed' versus 'bucketless' systems differ primarily in that bucketless systems:
- Do not use lead time offsetting to schedule orders
- Plan requirements by specific date rather than grouping them into weekly or daily time buckets (Correct answer)
- Eliminate the need for a Bill of Materials
- Only support independent demand items
Correct answer: Plan requirements by specific date rather than grouping them into weekly or daily time buckets
Bucketless MRP assigns requirements and order dates to specific calendar dates rather than aggregating them into weekly or daily time buckets, providing greater scheduling precision.
MRP Material Requirements Planning Fundamentals 5
A buyer notices that MRP has generated planned orders for a purchased item even though sufficient on-hand stock exists.
The most likely cause is: