CH 8 Study Guide

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Apr 3, 2024

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Ch5: Fulfillment Process A sales area is a unique combination of which of the following elements? Sales organization; Distribution channel ; Division All of the following are examples of a shipping point except: storage rack In the fulfillment process, a plant is: e. A facility from which the company delivers products and services to its customers Material master data are grouped into views. Which of the following views are used in fulfillment? Basic data; Sales organization data; Sales plant data Pre-sales activity includes all of the following except: Customer purchase orders The shipping step concludes with: Goods issue The three segments into which the data in the customer master are divided are: Financial accounting data; Sales area data; General data What are the partner functions that customers can play in the fulfillment process? Sold-to party; Bill-to party; Ship-to party; Payer Which action triggers sales order processing in the fulfillment process? Receipt of a customer purchase order Which master data do companies use to determine the prices of their products? Pricing conditions Which of the following are the typical distribution channels ? Online; Wholesale; Retail Which of the following key organizational elements are unique to the fulfillment process? Sales area; Shipping point; Credit control area Which one of the following combinations of organizational elements is included in the definition of a sales area? Sales organization, distribution channel, division A company code is divided into several sales organizations, each of which is responsible for the sale and distribution of goods and services for a particular geographical area. True A customer info record is an intersection of customer data and sales data. False A distribution channel is the means by which a company delivers its goods and services to its customers. True A sales organization is responsible for negotiating terms and conditions of sales for a particular market. True An inquiry is a request for information regarding a potential order that the customer places with the company. True Customer master data include data needed to conduct business with customers and to execute transactions that are related specifically to the fulfillment process. True Distribution channels can be used to differentiate between wholesale, retail, and Internet sales strategies. True

Chap 6: Production Process A planned order is a formal request that indicates: How many units of a material are needed, What materials are needed, When the materials are needed All of the following can serve as a work center except : Answer: A shipping dock Examples of production resource tools are: Fixtures, Engineering drawings, Calibration instruments If a company has adopted the make-to-stock strategy, what is the trigger for the production of goods ? Need to increase inventory Master data relevant to the production process are: Work centers, Material master, Bills of material When the finished goods have been produced, the SAP ERP system allows a user to record which of the following? Confirmation Which of the following are key organizational data relevant to the production process? Storage location; Plant Which of the following are statuses that can apply to a BOM? Active, Inactive Which of the following can be included in processing time? Machine time, Labor time Which of the following identifies the list of materials needed to produce one or more units of a finished good? Bill of materials Which of the following is not a step in the production process? Billing Which one of the following best describes a work center? A location where value-added work needed to produce a material is carried out Which one of the following is NOT a type of organizational data relevant to the production process? Credit control area A bill of materials identifies the finished goods that are to be shipped to a specific customer. False A work center is a location where materials are placed immediately before they are shipped. False Production resource tools are movable resources that are shared among different work centers. True Typically a production order does not include any references to the BOM, routing, or work centers. False 1.Describe repetitive and discrete manufacturing. What are the major differences between them? Discrete and repetitive manufacturing involve the production of tangible materials such as cars, computers, and bicycles. Each unit produced is a “discrete” unit, meaning it is distinct from other units and it can be counted. Repetitive manufacturing: Same or similar products are produced over a period of time/ A specified quantity is produced over a period of time Discrete: Batches of different materials over time, often alternating between materials on a production line. 2.What are the major manufacturing strategies? Briefly explain each. If the company has adopted a make-to-order strategy , then the receipt of a customer order (fulfillment process) will trigger the need to produce the materials./ If the company has adopted a make-to-stock strategy , then production is triggered by the material planning process, which is concerned with ensuring that sufficient quantities of materials are always available. 3. What are the master data for production process? Bill of materials (BOM): Identifies the components needed to make the material; A component can have its own BOM to creates a multi-level BOM; BOMs are used in: Material planning; Production; Procurement; Product costing Work center : is a location where value-added work needed to produce a material is carried out. Basic data section: Name, description/Person responsible for maintaining master data/Task list usage (which routings can use this work center); Capacities: available capacity/formula key; Scheduling: scheduling basis/formula key; Cost center: cost center/ activity types/ formula key; HR assignment: people, positions, qualifications Product routing: Steps necessary to produce a material. the product routing specifies the sequence (Standard, Alternate, Parallel) in which these operations must be carried out, the work center where they are to be performed, and the time (Setup, machine, labor) needed to complete them Material master: Previously discussed views: Basic data, purchasing related, Sales related, Accounting related

Additional view needed for production: Work scheduling – plant specific/ MRP – plant specific Production resource tools (PRT): Movable objects required for production: Shared among different work centers; Documents (instructions); Materials (calibration tool); Equipment (machine that is not in a fixed location); Miscellaneous 6.Organizational data for production process? Client, company code, plant, storage location 4.Briefly describe following terms: Work center, routing, BOM, planned order, production order. Work center: is a location where value-added work needed to produce a material is carried out. The routing indicates how to produce a specified product. The BOM indicates which materials are used to manufacture that product. BOM is a hierarchical depiction of the materials needed to produce a finished good or semifinished good Planned order: The individual making the request specifies which materials are needed, how many, and when they are needed. Production order, which is created in the authorize production step, represents an actual commitment to produce a specific quantity of materials by a certain date. 5.Explain the production process from start to finish. The process begins with a request for production that is typically triggered by another process such as fulfillment, which needs to complete a customer order (make-to-order strategy), or material planning, which has determined that the company needs to increase inventory levels (make-to- stock strategy). The request is then authorized for production by the production supervisor. The next step is to release the order for production so that the materials needed to produce the bikes are issued from storage. After the finished goods have been produced, the actual production is confirmed in the system, signaling that the steps required to manufacture the materials have been completed. The materials are then moved to storage, and the system reports that they are now available for consumption by other processes (e.g., fulfillment). Chapter 8-Material Planning Process Material planning is concerned with answering which basic questions? What materials are required?/ When are the materials required?/ How many materials are required? The proposals that material planning generates typically are in the form of: Planned orders./ Purchase requisitions. Which of the following are key organizational elements in materials planning? Company code; Plant; Storage location Which of the following are master data relevant to material planning? Bills of material; Material master Which of the following are production control techniques as indicated by the MRP type in the material master? Consumption-based planning; No planning Which of the following represent reasons why a company should maintain a safety stock? To avoid stock-outs; To avoid lost sales Which of the following statements about MRP and MPS are TRUE? MRP calculates requirements for all levels of the BOM/ MPS calculates requirements only for the first-level items in the BOM. Which of the following are common time estimates utilized during the material planning process? GR processing time/ Planned delivery time/ In-house production time Which of the following are elements of the in-house production time ? Interoperation/ Processing/ Setup Which of the following statements regarding a BOM are TRUE? A BOM identifies the components needed to make the material./ A BOM component can have its own BOM./ A BOM is plant specific. The purpose of the materials requirements planning step is to: Calculate net requirements./ Generate procurement proposals (requisitions and planned orders). Which of the following are possible outcomes in MRP ? Purchase requisitions/ Planned orders/ Dependent requirements The main objective of material planning is: To balance the demand for materials with the supply. The master data elements in material planning are: Product routings, bills of material, material master, product groups. Which of the following statements best represents what procurement type indicates? Whether a material is produced in house, obtained externally, both, or none The MRP technique calculates the requirements for a material based on: The material's dependence on other materials. Requirements that are calculated based on actual and forecasted sales are known as: Planned independent requirements. Setup time is the time required to: Set up the work centers used in production. What does SOP stand for? Sales and operations planning After the SOP step in material planning has generated the production plan: The plan is transferred to demand management.

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The lot size specifies: the procedure that is used to determine the lot size A company has 2 options for procuring materials: make or buy. Which MRP data view of the material master will the ERP system consider for this decision: MRP 2 Which of the fl options represents categories of consumption-based planning? Forecast-based planning, time-based planning, reorder-point planning Material planning is one of the most complex processes within an organization. True The MRP step in the material planning processes uses requirements to generate the final procurement proposals. True Product routings is one of the master data elements in material planning. True In-house production is the most common procurement type for raw materials. False Typically, semifinished goods and raw materials have dependent requirements. True Lot size-dependent times remain the same regardless of the amount of the material being procured. False In make-to-stock strategy the production of the finished goods and any needed semifinished goods is triggered by a sales order. False What is the main objective of material planning process? To balance the demand for materials with the supply of materials. Explain material planning process from start to finish. The material planning process starts with sales and operations planning (SOP), which uses strategic revenue and sales objectives established by senior mgt to create specific operations plans. Demand mgt translates these plans into material requirements, specifying quantity and timing. Materials requirements planning (MRP) generates procurement proposals based on these requirements, triggering production or procurement that make or buy the needed materials. Ultimately the company uses these materials to execute the fulfillment process. What are the major MRP types? Briefly explain each . Consumption-based planning: Derives requirements based on historical consumption data Materials requirements planning (MRP) (2 types of requirement: independent and dependent): Derives dependent requirements based on independent requirements; BOM explosion; Can plan for all levels in the BOM Master production scheduling (MPS): Optional step, similar to MRP/ Derives dependent requirements only for the first level (component) in the BOM/ Executed first for critical finished goods Distinguish between independent and dependent demand. Independent demand: Demand is based on customer (external) demand; Finished goods, trading goods; Calculated based on actual and forecasted sales; Actual sales orders = customer independent requirement (CIR);Calculated demand = planned independent requirements (PIR) Dependent demand Demand is dependent on the demand for another material; Seimfinished goods, raw materials What is lot size? Briefly explain L4L and fixed order quantity lot sizes. A lot size is the quantity of material that is specified in the procurement proposals generated by the material planning process. The lot size key specifies the procedure that is used to determine the lot size. Static lot-sizing procedures, which specify a fixed quantity based on either a predetermined value (fixed lot size) or the exact quantity required (lot- for-lot) What is SOP? SOP is a forecasting and planning tool that businesses use to enter or generate a sales forecast, specify inventory requirements, and then generate an operations plan. SOP uses data from a variety of sources to produce a production plan. SOP can be either standard or flexible. What is MRP? The final step in the material planning process is MRP, which calculates the net requirements for materials and creates procurement proposals—to make or buy the necessary materials—that ensure that the organization will have sufficient material available to cover its requirements. MRP generates plans for materials as well as for the components and raw materials that are used to produce a material. That is, it plans for all levels of the BOM.

CH 8 Study Guide

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