MRP Procurement & Vendor Management 2 — Questions and Answers
Question 1: Which supplier evaluation criterion directly affects the accuracy of MRP's planned order dates?
- Supplier financial stability
- Supplier lead time reliability (Correct answer)
- Supplier geographic location
- Supplier workforce size
Correct answer: Supplier lead time reliability
Lead time reliability determines whether actual delivery aligns with MRP's planned dates; unreliable lead times cause schedule disruptions and require safety stock adjustments.
Question 2: A buyer receives an MRP planned order for 500 units of a purchased component. What is the next action in the standard MRP procurement process?
- Immediately ship the component to the shop floor
- Convert the planned order to a firm planned order or purchase requisition (Correct answer)
- Adjust the master production schedule
- Update safety stock levels
Correct answer: Convert the planned order to a firm planned order or purchase requisition
Planned orders must be converted to firm planned orders or purchase requisitions before a purchase order is issued; this is the standard MRP action message workflow.
Question 3: What is the purpose of a supplier scorecard in vendor management?
- To replace the need for purchase orders
- To systematically measure and communicate supplier performance across key metrics (Correct answer)
- To determine raw material pricing indexes
- To manage internal manufacturing quality
Correct answer: To systematically measure and communicate supplier performance across key metrics
A supplier scorecard tracks performance metrics such as on-time delivery, quality, and responsiveness, providing objective data for supplier development and sourcing decisions.
Question 4: Which concept describes the total cost of acquiring and using a purchased item, including price, transportation, quality, and administrative costs?
- Unit cost
- Standard cost
- Total cost of ownership (TCO) (Correct answer)
- Landed cost
Correct answer: Total cost of ownership (TCO)
Total cost of ownership (TCO) captures all costs associated with a purchased item beyond its unit price, enabling more accurate supplier comparison and sourcing decisions.
Question 5: In MRP procurement, what does 'order quantity' refer to for a purchased item?
- The safety stock level for the item
- The amount authorized in a single purchase order based on lot-sizing rules (Correct answer)
- The annual demand forecast
- The reorder point
Correct answer: The amount authorized in a single purchase order based on lot-sizing rules
Order quantity is the amount ordered per purchase order, determined by the lot-sizing rule (e.g., fixed order quantity, EOQ, lot-for-lot) applied to the item.
Question 6: What does 'expediting' mean in the context of MRP procurement?
- Canceling a purchase order due to demand reduction
- Accelerating a late or critical purchase order to meet a revised need date (Correct answer)
- Negotiating lower prices on high-volume orders
- Returning non-conforming goods to a supplier
Correct answer: Accelerating a late or critical purchase order to meet a revised need date
Expediting involves actively following up with a supplier to accelerate delivery of a purchase order that is at risk of being late relative to MRP's required date.
Question 7: Which document proves that received goods match what was ordered and is required before payment is authorized?
- Purchase requisition
- Goods receipt (receiving report) (Correct answer)
- Bill of lading
- Invoice
Correct answer: Goods receipt (receiving report)
A goods receipt or receiving report documents that the correct quantity and type of material was received, forming part of the three-way match required before invoice payment.
MRP Procurement & Vendor Management 2
Which supplier evaluation criterion directly affects the accuracy of MRP's planned order dates?