Materials Requirements Planning (MRP)

question 61

Multiple Choice

Materials requirements planning (MRP)

• A)reduces the uncertainty about when materials are needed,thereby reducing the need to carry large levels of inventory.
• B)is able to compute exactly the cost of purchasing by taking into account all costs associated with inventory carrying.
• C)requires vendors to deliver inventory to the production site exactly when needed and in the correct quantities.
• D)None of the above is correct.

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Definitions:

Efficiency Wage

A theory suggesting that higher wages may increase worker productivity and efficiency by attracting better applicants, reducing turnover, and increasing worker morale.

Contract Curve

Curve showing all efficient allocations of goods between two consumers, or of two inputs between two production functions.

Utility Possibilities Frontier

Curve showing all efficient allocations of resources measured in terms of the utility levels of two individuals.

Production Possibilities Frontier

Curve showing the combinations of two goods that can be produced with fixed quantities of inputs.