TYPE OF MANUFACTURING >

-
Discrete (Rirac)

↑ Repetitive (Lap

Process /Quatrinh)
dilp(ai)

① Discrete

Batches of different materials time.

3②
-
over

-
Tangible products. Repetive
-

Manufactured in invidual units.

③ Repetitive
-
same or products are produced
similar over a period oftime ,
- A specific quantity is
produced over a period time .

BASIC PRODUCTION PROCESS

Warehouse Production WH Production Warehouse

Request >
-
Authorize >
- Issue raw >
-
create
>
-
Receive finished
production production material product goods

ORGANIZATIONAL DATA Client BOM

↓

Company code ·
Indentify the components needed to make the material
↓ ·
A component can have its own BOM to creates a multi-
Plant level BOM .

↓ BOM used Material Planning (KHratl

in
·

storage location Production (san xnt)

Procurement (Muasam)
MASTER DATA Bill of materials (BOM) Product costing (Tinhgiathanh)
Work center

Product to the entire BOM .

Routing Header Applies
·

Material master + ) Status >

- active

Production resource tools (PRT) ↓ inactive

+ ) Base quantity :
typically 1 unit

: R Productionis
+ Usage

costing
...
+) Plant : each plant can have
a different BOM

+)
Validaty date
:
range

·
Items apply to the specific item in the BOM

+) Item category >

- stockitem (tonkho)

I
) Material must have
-

+ a

number material master

t)
Quantity non-stock item

variable-sized item

document item
 WORK CENTER WORK CENTER DATA

· Basic data- > name

,
decription
X responsible for
person
maintaining master data

task list
usage
(which routings can use

·
capacities this work center)
·
schedulings
Cost center
·

·
HR assignment

PRODUCT ROUTING step necessary to produce a material

·
operation (Vanhanh)
Sequence (Trinhty)
·

(Tienchuan)
/ standard
Alternative the(Thay
[ Parallel (Song song)
· Work center
·
Times (setup , machine, labor)

COMPONENT ASSIGNMENT

Specifies
·
the relationship between a BOM and a
routing .

·
Assigns components (material) in a BOM either

to routing to specific operation within routing

a or a
.
(If not >
-

assigned to the first operation)

units
PRODUCTION CAPABILITY
·
A measure
of how
many of a material a plant These do xem 1 wha may co the sy
can produce within a given timeline . dio buhien dri NVL trong Khoong
S

Hgian what dinh

· A data source for production planning .

MATERIAL MASTER

discussed
views basicdata seg
·
previous

related
sales related

accounting related
· Additional view needed for production >
-
work scheduling-plant specific
(ke'hoach lam vis choting plant)
More relevant in material planning MRP-ke' hoach yeu canvatti
.
·
PRT -
Production Resource Tools
·
Movable objects required for production rat the dichuyen can this chosy
>
-
shared
among different
work centers
givia ca plant (nha may
·
Documents (instructions)
· Materials (calibration tool) Tai
· lin- Hong dan
·
Equipment (machine that is not in a ·
Vatlien-long en tinchnn
fixed location) · Thitbi-gon tric'dinh
· Miscellaneous · Linktinh

PRODUCTION PROCESS

Plannedorderconvertproductionordera ser
With -order
operations
level

level

material ? What material produced ?

What ?
How many ? ·
How many
·

When ?
When
(101)
·

When will they be produced ?

What resources are to be used ?

·
How much is it expected to cost ?

I
or
Material , FI , Co
created
·

can be

manually Xirlydink lig Material master update

[ Thiph
(quantity value)
&

· Production order update

·

(quantity , date, costing

Chiphi WORK-IN-PROGRESS DETERMINATION

-

(dodang)
Overhead Caculation · WIP inventory
· Indirect- > supervisor , manager, salaries Receipt
utilities (tien ich) ·

#inh kij gitri

lai trong atrinhsX
/
con >
-
GL
-

Accummulated in cost center. Not essential essential

posted
·

caculated &
·

Periodically allocated to production orders > short production

-

based on predetermined rules materials not high high

(Phan b #K cho cas lenh
L
sx dia tren can GBIX aircraft week , month , year

quy dink true)

settlement planned -
actual cost ;· varriance
·
planned >
-
GR step settled
 Elements of the Request Production Step

Data in Planned Order

Element of the Authorize Production Step

> outcome
-

Data in P
a roduction Order

cost estimates in a production Order

·
planned cost Chiphidu Kien
:

dia tren ,
so'long thank pham
vic tinh chiphi NVL vanhan cong

-
Muctin

Target cost Chiphikehoach

· :

chosLthic tel
· Actual cost Chiphi'thuc te
:

cho SL thic +e

structure of Pr Order
.

O
ORDER RELEASE (Ralenh)
·
On creation order status is created (CRTD) /- automatic
-
manual
trang thai don hang dro to
· Must be release (REL) to : >
-

goods movement not possible

-
> Confirmations not possible
Documents cannot be printed
Settlement (Quyettoan)
Ketchnyen

-
Cothet tien
.

cacbrect theo .

-
In giving
- Gias tiep
-
vDL

·
Release as different levels >
-
header : all

operations :
specific

↓ operationsstatusiR partial released)

GOODS ISSUE

·
Movement type 261
·
Impact-> Material ,
FI ,
(O

G/L accounts updated

Inventory updated
Reservation - (reduced
Cost - (actual cost in order)
 Confirmation Step

Good Receipt

online lists # production

Reporting
> -

specific reporting options

Work lists stock/requirement lists

>
-

Analytics
 Chapter 7 INVENTORY AND WAREHOUSE
MANAGEMENT PROCESS
·
Lien quan den lin tru va dichnyen vat lieu trong 1tchtc
>
-
Goods receipt
Goods issue

stock transfer
transfer posting

Warehouse management-quy trinh chophep car cong ty quan ly

·

nguyen rat lien mot zach hie qua

·
Inventory
-

Linkages -
warehouse

INVENTORY MANAGEMENT

·
Focus is on the extension of the goods movement .

·
Goods movement-> > information needed to excute

general ledger accounts affected

·
key organization : Storage Location

·
Most relevant masterdata :
>
-
master data
Plant/data storage
material master view

GOODS RECEIPT
GOODS ISSUE
↑
Movement of
inventory (increase)
materials into Decrease inventory +
· ·

Can take
·

place during the production process ·

In fullfillment process indicates
,

[shipmentofishishedgooda
result in creation of material production
3
Can
·
>
-

Y FI documents + IM-WM process

·
can post good receipts without reference to an order. · In Production process : reflects
>
-
Initial receipt of
inventory lo can refer den 1 don dathing) the issuing of raw materials or

(Bien nhan ban dan) semifinished goods to a pr

. o
.

>
-

Unplanned receipt (ngoi Kehoach) · can be unplanned

·
Materials may be withdraw
TRANSFER ROUTING for internal consumption .
(thu hoi detiendung ni b)
[status stock
in
·

change
type of materials
stock status unrestricted STOCK TRANSFER

i
· Four common use

Can be used in other

·
inquality inspection ·
used to physically move materials
situations that do not blocked within enterprise : 1 org >
-
location

necessarily involve L in
transit · 3 options (org level)
·

a physical movement

[
storage locations within one plant
Co what thiet toong ratly' > NVL)
-
·
S options (regardless org .
level) plants in one company code
one-step procedure plants in different company codes
two-step procedure
stock transport order (Sto)
Storage Location-to-Storage Location Transfer
· A transfer between 2 storage location in

the same plant

Reasons why >
temporary staging area
-
·

quality inspection
·
a one-step or a two-step can be used

>
-

one-step procedure
materials > any stock status
(in any stock status -

Creceiving locations)
supplying locations)

two-step procedure : only when restricted

(supplying location)
· Not affect valuation (same valuation)
anhuong
# No financial impatient chungti)-
·
Split valuation (inh giaggiongnhan)
>
-
Financial impact
Financial document

Multiple material accounts

plant-to-plant Transfer
·
Movement materials : between 2 plants
in the same company code
·
One-step/two-step procedure
different is the stock status at the

receiving plant
·
Typicallyrestricted status can be used
·
Material documents are created
·
Financial impact (FI document)

company code-to-company code

·
Two plants in different company code
·
Two-step/Two-step
· Two FI documents are created for each comp
.
> One
-
line item > material
-
account

one line item > -

clearing account created

to accommodate such a transfer
(thank toan butru)

STOCK TRANSPORT ORDERS ·

without delivery
·
plant - to
plant limit # purchasing + Inventory management
>
-

transport orders are solution

stock 1) STO directly or refer to other document (PR)
:

Sioprocess : 1 plant purchase material +) Two-step

·

1 plant sell +) Material document created > record movement

-

·
can involve
procurement fullfillment, IM
:
,
+) Goods
receipt recorded Sto
) maybe created
stype > without delivery + 1 or 2 FI
-
·

with delivery +
) Financial impact
with delivery and billing +
) GL accounts : material + clearing
· with delivery
1) Delivery document is created >
-

picking
prior to goods issue packing
(trin Khixnathang)
+ ) Treated like sales order
+)
One-step /Two-step
one-step : 1 material document created
If [ the materials are placed in

unrestricted use at
receiving plant
material movement
two-step :
[ financial impact
~ stO without delivery

·
with delivery and billing
STO includes delivery document (shipping step
[
+

> billing step (fullfillment process)

at
sending plant
invoice verification step from
procurement process (receive plant)
+) Purchase price
based on pricing conditions
E
sto

in for records
+
) Supplying plant creates a delivery document

authorizing the shipment

+) Goods issue is posted (sending plant)
Goods receipt is posted (receiving plant)

WAREHOUSE MANAGEMENT

organizational data in WM
·
key org . data : Warehouse ·
Warehouse-storage location rules
↓ link at least 1 SLoc
1
WH

associated with 1 >

-
WH link to sloc across multiple plants
or multiple combinations of plant sloc-1 warehouse
- and Sloc Not all sloc must be linked to a WH
↓
provide linkage IM and WM

- storage type
↓ storage section/picking area
L

O divide into smaller areas storage bin

in a hirarchical manner
Storage type
·

) based
+
on >
-
characteristics of the space
materials

activity
how materials are stored/
on material specification
1) The assignment of sloc to a WH Links IM-WM

+) Interim storage /
-

represent the physical

- ·
Picking area
Lim tritam thi
t based on removing materials
I
picking
·
Storage Section fast-moving +) grouped based
picking stategies
on

↑ slow-moving specific employee who authorized

similar character
-
istics
heavy I
L
a delivery >
-
allocated multiple
to

light picking areas to // picking

L small parallel
Each storage type at least one
storage section storage bins : smallest unit of space in we
-
· ·
a

+7 can
vary in size

MATERIAL MASTER +) unique address

organization level Warehouse +
) can stores in different materials

[
·

plant (quants)
storage type
·
Warehouse management view

Basic data I relevant to all process

-

L Data

Data
used in defining stock placement

regarding
and removal strategies
the storage bins
I
xas dink chien like loai b

hang tonkho
Noi him tri NUL dripr
where the materials will be stored
I luntries
Some
·
data are redefined for WM
· Bin-related data
·
placement and removal stategies

Processes in WM

lut
· Plan WH

# Transfer rea >

-

automatically when goods movements

L
.

> manually -
faciliate internal movement of material
1) Posting change notice-change status

+) Source rea
, material doe

[ delivery doe
production order
+) No FI impact

Tranfer Requirement

Execute WMovement
common warehouse movements
picking (thu
[ posting changes(cat)
·

putting away

·
Transfer order
excute WMovement
·
Transfer
order> directly
-

transfer rea .
/posting change
manually -

consists -
a header

L one/more line items

· No finacial impact
Transfer order
 lOMoARcPSD|10415039

1. Which one of the following is NOT a type of organizational data relevant to the production
process?
a. Company code
b. Credit control area
c. Client
d. Storage location
e. Plant

Answer: b

Difficulty: Difficult
Section Reference: Introduction

2. In process industries like chemicals and beverages, the bill of materials is also known as a(n)
a. Formula / Receipe (Cingthc)
b. List of chemicals
c. Bill of chemicals
d. Equation
e. Material list

Answer: a

Difficulty: Moderate
Section Reference: Master Data - Bill of Material

3. Which one of the following best describes a work center?

a. A location where materials are placed right before they are shipped
b. Another term used to describe an office building
c. A location where value-added work needed to produce a material is carried out
d. A shipping dock

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e. A storage shelf in a warehouse

Answer: c

Difficulty: Difficult
Section Reference: Master Data - Work Center

4. All of the following can serve as a work center except

a. A group of machines
b. A group of people responsible for completing operations
c. A production line
d. A work area
e. A shipping dock

Answer: e

Difficulty: Moderate
Section Reference: Master Data - Work Center

5. What term describes two simultaneous series of operations needed to build components for a
finished product?
a. Parallel sequences
b. Alternate sequences
c. Same sequence
d. Line sequence
e. Production sequence

Answer: a

Difficulty: Moderate
Section Reference: Master Data - Product Routing

6. Which one of the following best defines material staging?

a. Component materials are moved into storage
b. Component materials are received from the vendor
c. Component materials are moved from storage and prepared for use
d. Defective returned goods are broken down into several components for refurbishment
e. Finished materials are moved back into a storage area

Answer: c

Difficulty: Difficult
Section Reference: Master Data - Product Routing

7. What term identifies the list of materials needed to produce one or more units of a finished good?
a. Routing
b. Source materials

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c. Component listing
d. Bill of components
e. Bill of materials

Answer: e

Difficulty: Moderate
Section Reference: Master Data - Bill of Materials

8. At what level are material requirements planning (MRP) and work scheduling data defined?
a. Client level
b. Plant level
c. Company code level
d. Sales area level
e. Production level

Answer: b

Difficulty: Moderate
Section Reference: Master Data - Material Master

9. Which of the following is not a step in the production process?

a. Production authorization
b. Goods issue
c. Request production
d. Billing
e. Order release

Answer: d

Difficulty: Moderate
Section Reference: Process

10. If a company has adopted the make-to-stock strategy, what is the trigger for the production of
goods?
a. Need to increase inventory
b. Customer order
c. Request for quotation
d. Customer inquiry
e. Billing document

Answer: a

Difficulty: Moderate
Section Reference: Introduction

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11. Which of the following does a routing identify on a production order?

a. The materials or components to be used in production
b. The location where operations are to be performed
c. The capacity requirements of the production order
d. The location of raw materials in the warehouse
e. The operations needed to produce a material

Answer: e

Difficulty: Difficult
Section Reference: Process - Authorization Production

12. What step in the production process is used to enter data in to the SAP ERP system when the
operations needed to produce a materials are completed?
a. Production note
b. Confirmation
c. Order complete
d. Production record
e. Production outcome

Answer: b

Difficulty: Difficult
Section Reference: Process - Confirmations

13. The creation of a production order results in several outcomes including all of the following
except
a. Scheduling
b. Availability checks
c. Purchase requisitions
d. Preliminary costing
e. Confirmation

Answer: e

Difficulty: Moderate
Section Reference: Process - Moderate

14. What operation in the routing is sometimes necessary to prepare materials for use in production?
a. Backflushing
b. Confirmation
c. Material staging
d. Recall
e. Reservation

Answer: c

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Difficulty: Difficult
Section Reference: Master Data - Product Routing

15. Which of the following is not an outcome of a goods issue to a production order?
00
a. The material master is updated to reflect the reduction in the quantity and value of the
materials issued
O
b. Actual costs associated with material consumption are calculated
c. - -
Material reservations are updated
d. A goods receipt is automatically recorded
e. An FI document is created to record financial accounting data
CO
Answer: d

Difficulty: Difficult
Section Reference: Process - Goods Issue

16. When the finished goods have been produced the SAP ERP system allows a user to record which
of the following?
a. Confirmation
b. Goods issue
c. Order release
d. Goods receipt
e. Authorize production

Answer: a

Difficulty: Easy
Section Reference: Process

17. Which of the following is an important report in the production process?

a. Work list
b. Stock requirement list
c. Online list
d. BOM
e. None of the above

Answer: b

Difficulty: Easy
Section Reference: Reporting

Question type: True or False

18. A bill of materials identifies the finished goods that are to be shipped to a specific customer.

Answer: False

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32. Material staging is a technique that is used to automatically record the goods issue when an order
is confirmed

Answer: False

Difficulty: Difficult
Section Reference: Master Data - Product Routing

m
33. Periodic processing is also known as period-end closing

Answer: True

Difficulty: Moderate
Section Reference: Process - Periodic Processing

34. Overhead allocation, work in process determination, and order settlement are all included in
periodic processing

Answer: True

Difficulty: Moderate
Section Reference: Process - Periodic Processing

35. A technically complete status for a production order means that even though the main material is
complete, other production processes may be needed to complete smaller components of the
material

Answer: False

Difficulty: Moderate
Section Reference: Process - Authorize Production

Package Title: Test bank

C7: Inventory and Warehouse Management Processes

Question type: Multiple- Choice

1. Which of the following statements about the goods receipt step are NOT true?

a. It results in a decrease in inventory.

b. It can occur during the procurement process.
c. It can result in the creation of material and financial accounting documents.
d. Materials are placed in an appropriate storage location with an appropriate status.
e. It can occur during the production process.

Answer: a

Difficulty: Medium
Section: Goods Receipt

2. The key organizational level associated with inventory management is

a. Plant.
b. Company code.

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c. Storage section.
d. Storage area.
e. Storage location.

Answer: e

Difficulty: Easy
Section: Inventory Management

3. When do unplanned receipts occur?

a. When an invoice has been canceled

b. When material is transferred to another location
c. When a reference document does not exist
d. When a stock transfer is created
e. When the capacity of a storage location is exceeded

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Answer: c

Difficulty: Medium
Section: Goods Receipt

4. In the production process, a goods issue reflects

a. Moving raw materials or semifinished goods from a work center to storage bins.
b. Shipping finished goods or trading goods to a customer to fill a sales order.
c. Issuing finished goods to a production order.
d. Shipping finished goods to a customer against a goods issue request.
e. Issuing raw materials or semifinished goods to a production order.

Answer: e

Difficulty: Medium
Section: Goods Issue

5. Which of the following scenarios requires material-to-material posting?

a. Changing the material status from consignment to warehouse stock

b. Changing the material number of a material
c. Changing the material’s storage location
d. Changing the status of materials in stock
e. Changing the type of materials in stock

Answer: b

Difficulty: Easy
Section: Transfer Postings

6. Which one of the following is NOT an example of using transfer postings?

a. Changing the material status from consignment to warehouse stock

b. Changing the material number of a material
c. Changing the material’s storage location
d. Changing the status of materials in stock
e. Changing the type of materials in stock

Answer: c

Difficulty: Easy
Section: Transfer Postings

7. What is a stock transfer used for?

a. To change the status or type of materials in stock

b. To show material movements when a material is received in the warehouse from the vendor’s
location
c. To indicate that a material-to-material change has been posted

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d. To physically move materials from a storage location to the client’s warehouse

e. To physically move materials within the enterprise from one organizational level or
location to another

Answer: e

Difficulty: Easy
Section: Stock Transfers

8. Which of the following options is appropriate when two locations are physically close to each
other and there is no significant time lag between issue and receipt?

a. One-step procedure
b. Two-step procedure
c. Three-step procedure
d. Stock transport order
e. None of the above

Answer: a

Difficulty: Difficult
Section: Stock Transfers

9. A storage location-to-storage location transfer involves which of the following?

a. A stock transfer among several storage locations of two plants

b. A stock transfer between two storage locations of two plants
c. A stock transfer among several storage locations within the same plant
d. A stock transfer between two storage locations within the same plant
e. A stock transfer between or among at least two storage locations within one or more plants

Answer: d

Difficulty: Easy
Section: Storage location-to-storage location transfer

10. In plant-to-plant transfer, an FI document

a. Is created in both one-step and two-step movements.

b. Is created in two-step movements only.
c. Is created in one-step movements only.
d. Is not created.

Answer: a

Difficulty: Easy
Section: Plant-to-plant transfer

11. Which of the following represents the hierarchy of a warehouse?

a. Warehouse, storage section, storage type, storage bin

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b. Warehouse, storage bin, storage section, storage type

c. Warehouse, storage type, storage section, storage bin
d. Warehouse, storage section, storage bin, storage type
e. Warehouse, storage type, storage bin, storage section

Answer: c

Difficulty: Medium
Section: Storage Type

12. Shelf storage, pallet storage, and rack storage are examples of

a. Storage bins.
b. Warehouses.
c. Storage sections.
d. Storage types.
e. None of the above

Answer: d

Difficulty: Medium
Section: Storage Type

13. A storage type is a division of a warehouse based on the characteristics of the

a. Weight, width, and type

b. Dimensions and profitability.
c. Space, materials, and activity.
d. Price, space, and type.
e. Usage, price, and dimensions.

Answer: c

Difficulty: Medium
Section: Storage Type

14. Fast-moving, slow-moving, heavy, light, large, and small are examples of

a. Storage bins.
b. Warehouses.
c. Storage sections.
d. Storage types.
e. None of the above.

Answer: c

Difficulty: Medium
Section: Storage Section

15. A picking area groups which of the following elements?

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a. Shelves and pallets

b. Storage bins, based on similar picking strategies
c. Materials with similar transportation type
d. Materials with similar usage
e. Materials of the same material type

Answer: b

Difficulty: Medium
Section: Picking area

16. If a company stores a material in a storage location that is associated with a warehouse, then it
must include additional data

a. In the storage location stock view of the material master for that material.
b. In the basic data view of the material master for that material.
c. In the general plant data/storage view of the material master for that material.
d. In the warehouse management view of the material master for that material.
e. No data need to be added.

Answer: d

Difficulty: Medium
Section: Material master

17. Shelves, stacks, and aisles are examples of

a. Storage locations.
b. Coordinate systems for addresses.
c. Storage sections.
d. Storage identifiers.
e. Storage areas.

Answer: b

Difficulty: Easy
Section: Storage bins

18. Which of the following represents the document used to plan the movement of materials into and
out of bins in a warehouse?

a. Transfer list
b. Transfer request
c. Transfer plan
d. Transfer order
e. Transfer requirement

Answer: b

Difficulty: Medium
Section: Plan Warehouse movement

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19. Which of the following is a request to change the status of the material?

a. Posting change notice

b. Notice for change
c. Material change list
d. Status request list
e. Change request

Answer: a

Difficulty: Easy
Section: Tasks

20. When creating a transfer order, you find that a particular material has to be moved from multiple
source bins. Which of the following statements follows from this scenario?

a. The transfer order will have multiple line items for the material.
b. More than one transfer order needs to be created.
c. The material will be written in one line item.
d. An internal order request will be created to move the material into one source bin.
e. This scenario is impossible.

Answer: a

Difficulty: Difficult
Section: Execute warehouse movement -> Data

21. The ERP system can create transfer orders automatically, but only when

a. A destination is known.
b. The reference document is a transfer requirement
c. A warehouse movement type is specified.
d. A reference document exists.
e. Both the plant and the storage location are known.

Answer: d

Difficulty: Medium
Section: Tasks

22. Which of the following represents a possible sequence of steps in the warehouse movement
process?

a. Create a transfer request, physically move the materials, confirm the movement, retrieve the
transfer request
b. Physically move the materials, confirm the movement, create a transfer request, retrieve the
transfer request
c. Physically move the materials, generate a transfer order, confirm the movement, retrieve the
transfer order

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d. Generate a transfer order, retrieve the transfer order. confirm the movement, physically move
the materials
e. Generate a transfer order, physically move the materials, retrieve the transfer order,
confirm the movement

Answer: e

Difficulty: Difficult
Section: Confirm warehouse movement

23. In warehouse management steps associated with the procurement process, the warehouse
inventory is calculated as sum of the inventory in the following places:

a. Storage sections and storage areas

b. Warehouse bins and storage sections
c. Interim storage areas and warehouse bins
d. Storage locations and storage sections
e. Storage locations and storage areas

Answer: c

Difficulty: Medium
Section: Confirm warehouse movement

24. In a stock transfer from a plant where the storage location is warehouse managed to a plant where
it is not, which of the following activities occurs at the receiving plant?

a. A goods receipt triggers WM process steps.

b. A simple goods receipt is recorded in IM.
c. A goods issue triggers WM process steps.
d. A simple goods issue is recorded in IM.
e. None of the above

Answer: b

Difficulty: Medium
Section: Warehouse management in stock transfers

25. In a bin status report, double-clicking on a bin that contains materials

a. Produces a drilldown report showing details of the materials.

b. Opens a screen that enables you to change which bin is shown on the report.
c. Produces information about the bin location.
d. Opens a screen where storage bin information can be configured.
e. Will not display any data.

Answer: a

Difficulty: Medium
Section: Reporting

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26. Warehouse management is typically used

a. By organizations that have small quantities of materials.

b. By transportation companies.
c. By organizations that have either large quantities of materials or an expensive inventory.
d. By storage companies.
e. By organizations that demand better reporting for their inventory.

Answer: c

Difficulty: Easy
Section: Chapter summary

Question type: True or False

27. A storage location is a key organizational level associated with inventory management.

Answer: True

Difficulty: Easy
Section: Inventory Management

28. The most relevant category of master data in inventory management is the plant.

Answer: False

Difficulty: Medium
Section: Inventory Management

29. A goods receipt cannot be posted without reference to an order.

Answer: False

Difficulty: Easy
Section: Goods Receipt

30. Planned receipts occur when a reference document, such as a purchase order or a production
order, does not exist.

Answer: False

Difficulty: Easy
Section: Goods Receipt

31. A goods issue results in the creation of appropriate material, FI, and CO documents.

Answer: True

Difficulty: Easy
Section: Goods Issue

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a. To minimize the expenses for storing excess inventory.

b. To balance the demand for materials with the supply.
c. To shorten the duration of the procurement cycle.
d. To eliminate excess inventory.
e. To prevent lost sales.

Answer: b

Difficulty: Easy
Section: Learning Objectives

2. The money tied up in inventory best represents

a. An opportunity cost.
b. A liquid asset.
c. A strategic policy.
d. A high risk for loss.
e. A material planning strategy.

Answer: a

Difficulty: Easy
Section: Learning Objectives

3. A purchase requisition is

a. A confirmation for purchasing materials.

b. Proof of delivery.
c. A document issued by a vendor.
d. A request to purchase materials.
e. A confirmation of an inbound delivery.

Answer: d

Difficulty: Easy
Section: Learning Objectives

4. Requirements in the material planning process specify

a. The master data requirements.

b. How the material planning should be executed.
c. The work center capacity.
d. Requirements for the different modes of transportation.
e. How many of the materials are needed and when they are needed.

Answer: e

Difficulty: Easy

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Section: Learning Objectives

5. The organizational data elements in material planning are:

a. Plant, production version, company code.

b. Planning version, company code, client.
c. Client, company code, production version.
d. Storage section, client, storage location.
e. Client, company code, plant, storage location.

Answer: e

Difficulty: Medium
Section: Learning Objectives

6. The master data elements in material planning are:

a. Material masters, product types, storage location, vendors.

b. Product routings, bills of material, material masters, product groups.
c. Product types, product routings, material masters, product groups.
d. Product routings, product types, material masters, customers.
e. Material masters, storage location, product groups, product routings.

Answer: b

Difficulty: Medium
Section: Master Data

7. A company has two options for procuring materials: make or buy. Which MRP data view of the
material master will the ERP system consider for this decision?

a. MRP 1
b. MRP 2
c. MRP 3
d. MRP 4
e. None of the above

Answer: b

Difficulty: Medium
Section: Master Data

8. Which of the following statements best represents what procurement type indicates?

a. How a material is produced

b. Vendor’s groups
c. All of the ways to procure a material the user will choose from when making a decision
d. Whether a material is produced in house, obtained externally, both, or none
e. How a vendor will be chosen in the procurement process

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Answer: d

Difficulty: Medium
Section: Procurement Type

9. MRP type specifies

a. Whether the material is produced in house or is obtained externally.

b. How material quantities for planning will be calculated.
c. The production control technique used in planning.
d. The available time periods the ERP system can use for scheduling.
e. The strategy for BOM selection.

Answer: c

Difficulty: Medium
Section: MRP Type

10. Replenishment lead time is

a. The time between placing an order and receiving the materials.

b. The amount of time the routing operations will last.
c. The length of time a working center usually operates (in hrs, in one day).
d. Another term for capacity.
e. A synonym for interoperation time.

Answer: a

Difficulty: Medium
Section: MRP Type

11. Which of the following statements about consumption-based planning is TRUE?

a. Planning is based on historical data.

b. Planning is based on exploding the BOM.
c. Dependent demand is derived from independent demand.
d. It is used for high-value materials
e. Planning is based on MPS.

Answer: a

Difficulty: Easy
Section: MRP Type

12. Which of the following options represents categories of consumption-based planning?

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a. Materials-requirement planning, time-phased planning, reorder-point planning

b. Master production scheduling, MRP, forecast-based planning
c. MRP, forecast-based planning, master production scheduling
d. Forecast-based planning, time-phased planning, reorder-point planning
e. None of the above

Answer: d

Difficulty: Easy
Section: MRP Type

13. A company would be most likely to apply consumption-based planning for which of the
following products?

a. Car
b. Brake
c. Engine
d. Printer
e. Pen

Answer: e

Difficulty: Medium
Section: MRP Type

14. The MRP technique calculates the requirements for a material based on

a. Historical data.
b. Current data.
c. The material’s dependence on other materials.
d. Material type.
e. Replenishment lead time.

Answer: c

Difficulty: Medium
Section: MRP Type

15. Exploding the BOM refers to

a. Creating the BOM hierarchy showing all the levels of the BOM.
b. Calculating and planning requirements for materials at all levels of the BOM.
c. Executing the BOM for materials at the top level of the BOM.
d. Choosing the planning strategy for the BOM.
e. Generating multiple BOMs for materials in the same material group.

Answer: b

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Difficulty: Medium
Section: MRP Type

16. Requirements that are calculated based on actual and forecasted sales are known as

a. Planned independent requirements.

b. Customer-planned independent requirements.
c. Integrated independent requirements.
d. Forecast-independent requirements.
e. Customer-independent requirements.

Answer: a

Difficulty: Medium
Section: MRP Type

17. The lot size key specifies the

a. Optimum lot size for a group of materials.

b. Recommended lot size for a material.
c. Procedure used to determine the capacity of a storage area.
d. Lot size groups per each material type.
e. Procedure that is used to determine the lot size.

Answer: e

Difficulty: Medium
Section: Lot Size Key

18. The static lot-sizing procedure

a. Combines the requirements from multiple time periods into one lot.
b. Specifies a fixed quantity based on fixed lot size.
c. Specifies a quantity that is fixed for a specific, limited time period.
d. Specifies a fixed quantity based on either fixed lot size or lot-for-lot.
e. Combines quantities for multiple time periods into several lots.

Answer: d

Difficulty: Difficult
Section: Lot Size Key

19. Setup time, processing time, and interoperation time are elements of

a. In-house production time.

b. Goods issue processing time.
c. Planned delivery time.

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d. Goods receipt processing time.

e. Planned shipping time.

Answer: a

Difficulty: Easy
Section: Scheduling Times

20. Setup time is the time required to

a. Set up the operations used in a work center.

b. Move materials from one work center to another.
c. Process materials in production.
d. Set up the work centers used in production.
e. Move materials from one storage location to another.

Answer: d

Difficulty: Medium
Section: Scheduling Times

21. In SAP ERP production planning strategy, net requirements planning (Strategy 10), procurement
proposals are based on

a. CIRs and components that are already in stock.

b. PIRs, with regard to CIRs.
c. PIRs, without regard to CIRs.
d. CIRs, but components are not in stock.
e. PIRs, but the components are not in stock.

Answer: c

Difficulty: Difficult
Section: Strategy Group

22. Consider the following scenario, then choose which one of the options below corresponds to the
level of CIRs and PIRs after consumption.

Before consumption:

Procurement proposal for CIRs: 50

Procurement proposal for PIRs: 50

a. CIRs: 50, PIRs: 0

b. CIRs: 50, PIRs: 50
c. CIRs: 0, PIRs: 0
d. CIRs: 0, PIRs: 50
e. CIRs: 100, PIRs: 100

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Answer: a

Difficulty: Medium
Section: Consumption Mode

23. The manner in which CIRs consume PIRs is determined by the

a. Consumption type.
b. Consumption mode.
c. Consumption strategy.
d. Planning strategy.
e. Planning type.

Answer: b

Difficulty: Easy
Section: Consumption Mode

24. What does SOP stand for?

a. Sales and operations planning

b. Strategic operations planning
c. Sales operations planner
d. Systems operations products
e. Sales operations projects

Answer: a

Difficulty: Easy
Section: Process

25. What is SOP used for?

a. Creating an operational plan and material documents

b. Calculating the financial impact of the material movements
c. Generating and executing the operations plan
d. Tracking material movements
e. Forecasting and planning

Answer: e

Difficulty: Medium
Section: Process

26. After the SOP process has generated the production plan,

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a. SOP executes the plan.

b. The plan is conveyed to MRP for execution.
c. The plan is transferred to demand management.
d. SOP uses the plan to generate execution plan.
e. The plan is saved as a production version.

Answer: c

Difficulty: Medium
Section: Process

27. The planning table is best defined as

a. An independent tool used for parallel execution of the SOP process.

b. An interface for transferring data into SOP.
c. An interface used to enter all the operational plans.
d. A spreadsheet-like tool used to complete the tasks in SOP.
e. A brainstorming session for selecting the most appropriate plan.

Answer: d

Difficulty: Medium
Section: Tasks

28. Given the information below, calculate disaggregated quantities for touring bikes (TOUR) and
off-road bikes (ORBK).

Total production = 100

TOUR proportion factor = 35

ORBK proportion factor = 65

a. TOUR = 35, ORBK = 65

b. TOUR = 65, ORBK = 35
c. TOUR = 0, ORBK = 65
d. TOUR = 35, ORBK = 0
e. TOUR = 50, ORBK = 50

Answer: a

Difficulty: Easy
Section: Tasks

29. Master production scheduling is specialized form of

a. MRP.

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b. Demand planning.
c. SOP.
d. Production planning.
e. Operations scheduling.

Answer: a

Difficulty: Easy
Section: Materials Requirements Planning

30. Given the following information, use the net requirement calculation to calculate the available
stock.

MRP type is consumption-based planning.

Plant stock = 100

Receipts = 20
Issues = 10
Safety stock = 30

a. 120
b. 130
c. 80
d. 70
e. 110

Answer: a

Difficulty: Medium
Section: Materials Requirements Planning

31. Given the following information, use the net requirement calculation to calculate the available
stock.

MRP type is MPS.

Plant stock = 100

Receipts = 20
Issues = 10
Safety stock = 30

a. 120
b. 130
c. 80
d. 70
e. 110

Answer: c

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Difficulty: Medium
Section: Materials Requirements Planning

32. In the determine procurement proposal step, for materials with the procurement type of internal,
MRP will:

a. Generate purchase requisitions.

b. Provide three options.
c. Prompt the MRP controller to select the appropriate production version.
d. Transfer this step to MPS.
e. Always generate planned orders.

Answer: e

Difficulty: Easy
Section: Determine procurement proposal

33. Which of the following is most likely to trigger the MRP process?

a. A periodic planning need

b. Changes to MRP elements
c. The need for an operations plan
d. Events affecting demand
e. Events affecting supply

Answer: b

Difficulty: Difficult
Section: Various

34. The most important reporting tool in material planning is the

a. Planning result report.

b. MRP list.
c. Stock overview.
d. Stock/requirements list.
e. Strategies list.

Answer: d

Difficulty: Easy
Section: Stock Requirements List

35. The stock/requirements list displays

a. Changes in the planning situation since MRP was run.

b. MRP elements at an aggregation level.
c. All MRP elements for a material.

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