Which of the Following Statements About a Material Requirements Planning

question 34

Multiple Choice

Which of the following statements about a material requirements planning (MRP) system is true?

• A) The MRP system can be used to forecast sales.
• B) An MRP system cannot be used in JIT programs.
• C) The MRP system is most often used to uncover needs or problem areas within an organization's various functional departments.
• D) AN MRP system cannot be used to develop a production schedule or to reduce costs.
• E) None of the above.

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Definitions:

Fair Market Value

The price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Minimum Lease Payments

Minimum lease payments are the lowest amount that a lessee is obligated to pay over the lease term, including fixed payments, variable rent, guarantees, and residual value assurances.

Incremental Borrowing Rate

The interest rate a company would have to pay if it borrows funds on the day of the lease transaction, used in lease accounting.

Lessor's Implicit Rate

The interest rate in a lease that yields the same net investment in the lease as the present value of the minimum lease payments and any unguaranteed residual value.