When Using MRP and Kanban Together

question 61

Multiple Choice

When using MRP and kanban together:

• A) the control capabilities of MRP are used instead of those from kanban.
• B) the planning capabilities of kanban are used instead of those from MRP.
• C) the demand rate should be variable in order to derive the greatest benefit from the MRP portion of the system.
• D) the number of kanbans is recalculated from the MRP system's order changes throughout the horizon.

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Definitions:

NPV

Net Present Value; a calculation used to determine the value of an investment by considering the present value of its expected future cash flows minus the initial investment cost.

Contribution Margin

The amount by which a product's sales price exceeds its total variable costs, indicating how much contribution the product makes towards fixed costs and profits.

Variable Cost

Costs that vary directly with the level of output or production activity, such as raw materials or hourly labor.

Cash Break-even

The point at which a company does not make a profit or loss from operations, calculated by covering all cash operating expenses with the revenue generated.