Production and Operations Management

91. Enterprise Resource Planning (ERP) has been criticised on a number of grounds. Which of the following is not a common criticism of ERP?

  1. It doesn't allow decisions and databases from all parts of the organisation to be integrated
  2. Implementation is expensive
  3. The effect it has on businesses is disappointing
  4. It can have a disruptive effect on the organisation's operations
Correct answer: (A)
It doesn't allow decisions and databases from all parts of the organisation to be integrated

92. Demand for a given item is said to be dependent if

  1. the item has several children
  2. there is a deep bill of materials
  3. the finished products are mostly services (rather than goods)
  4. there is a clearly identifiable parent
Correct answer: (D)
there is a clearly identifiable parent

93. In MRP (Materials Requirements Planning) the Bill of Materials is:

  1. The required output from a process over time
  2. A list of required safety stock items
  3. The sum of stock-on-hand and work-in-progress
  4. The product structure showing where common parts are used
Correct answer: (D)
The product structure showing where common parts are used

94. What is measurementship?

  1. Trying to agree low objectives so as to look good later
  2. Discussing "the numbers" at every opportunity
  3. Surveying by naval architects.
  4. Collecting too much performance data
Correct answer: (A)
Trying to agree low objectives so as to look good later

95. The outputs of a MRP II system are:

  1. Sales order priorities / Bills of Materials / Material Requirement Plans
  2. Material Requirement Plans / scheduled purchase orders / capacity requirement plans
  3. Stock quantities / Bills of Materials / Master Production Schedule
  4. Capacity requirement plans / stock quantities / stock locations
Correct answer: (B)
Material Requirement Plans / scheduled purchase orders / capacity requirement plans

96. Three levels of planning. What are they?

  1. Top, middle and bottom
  2. Headquarters, divisional and local
  3. Operational, intermediate and strategic
  4. None of these
Correct answer: (C)
Operational, intermediate and strategic

97. Three inputs for every MRP system are:

  1. Sales forecast, delivery costs, capacity plan
  2. Average replenishment time, re-order point, economic order quantity
  3. Stock on hand, Master Production Schedule, Bill of Materials
  4. Bill of Materials, sales forecast, sales history
Correct answer: (C)
Stock on hand, Master Production Schedule, Bill of Materials

98. What three problems commonly hindering successful planning did we identify?

  1. An oversized planning department; poor co-operation between managers and planners; managers with little time to gather information.
  2. Procedures unsuited to change; negative organisational culture; poor interpersonal relationships.
  3. Lack of planning expertise; little top management support; misuse of planning specialists.
  4. Conflict among objectives; impossibility of measuring outcomes; confusion between means and ends.
Correct answer: (C)
Lack of planning expertise; little top management support; misuse of planning specialists.

99. What is the more formal term for what is known as 'Plan B'?

  1. A contingency plan
  2. A circumstantial plan
  3. A catastrophe plan
  4. A convergence plan
Correct answer: (A)
A contingency plan

100. What is the planning horizon?

  1. The time ahead for which there is no information.
  2. The time period within which uncertainty is very low.
  3. The maximum time for which managers can make plans.
  4. The time between making a plan and putting it into effect.
Correct answer: (D)
The time between making a plan and putting it into effect.
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