Which of the Following Most Closely Describes Net Material Requirements

question 3

Multiple Choice

Which of the following most closely describes net material requirements in an MRP system?

• A) Gross requirements - planned receipts.
• B) Gross requirements - (on-hand + scheduled receipts).
• C) Gross requirements - on-hand + scheduled receipts.
• D) Gross requirements - planned order releases.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal circumstances.

Machine-Hours

Machine-hours refer to the total time that machinery is in operation, often used as a basis for allocating manufacturing overhead costs.

Unused Capacity

The portion of a company's production capability or resources that is not currently being utilized to generate revenue or output.

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and activity levels, used to allocate overhead costs to products.