Which of the Following Statements on MRP Is TRUE

question 30

Multiple Choice

Which of the following statements on MRP is TRUE?

• A) MRP is an inventory control system that derives the gross requirements of the end items from purchase commitments with vendors.
• B) The payoffs from MRP tend to be greater when there are more BOM levels and larger lot sizes.
• C) The fixed order quantity (FOQ) eliminates remnants.
• D) When MRP systems are enhanced to include financial reporting they are called basic MRP systems, or "little mrp."

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Definitions:

Disrupted Production

Interruptions or disturbances in the normal manufacturing or production process.

Transportation Costs

Expenses associated with the movement of materials, goods, or personnel from one location to another, which can include freight, shipping, and logistics costs.

Receiving Costs

Expenses associated with accepting goods from suppliers, including inspection, storage, and document processing costs.

Shortage Costs

Costs incurred as a result of insufficient inventory, including potential lost sales, backorder handling, and decreased customer satisfaction.