QUESTION: 89

The major advantage of subcontracting is:

Costs associated with excess capacity are avoided, and because production is leveled, there are no costs associated with changing production levels.
Cost of purchasing (item cost, purchasing, and transportation and inspection costs) may be greater than if the item were made in the plant.
Inventories can be kept to a minimum
No need to hire and train workers.

Answer(s): A

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QUESTION: 90

The information needed to develop an MPS is provided by:

The production plan
Forecasts for individual end items
Actual orders received from customers and for stock replenishment
All of these

Answer(s): D

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The MPS is a plan for manufacturing; it reflects the needs of the marketplace and the capacity of manufacturing and forms a priority plan for manufacturing to follows: The MPS forms a vital link between sales and production as follows:

It makes possible valid order promises. The MPS is a plan of what is to be produced and when. As such, it tells sales and manufacturing when goods will be available for delivery.
It is contract between marketing and manufacturing. It is an agreed- upon plan
Both of these
None of these

Answer(s): C

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QUESTION: 92

To maintain the desired level of customer service by maintaining finished-goods inventory levels or by scheduling to meet customer delivery requirements.

1. To make the best use of material, labor and equipment.
2. To maintain inventory investment at the required levels.

These are the objectives of:

MRP
MPR II
MPS
Production plan

Answer(s): C

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QUESTION: 89

QUESTION: 90

QUESTION: 91

QUESTION: 92