COPY: ERP Systems: Production & Materials Management
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Questions and Answers

What is a key benefit of integrating ERP systems with activity-based costing systems?

  • It eliminates the requirement for process controls.
  • It simplifies the budgeting process without any formal measures.
  • It improves the accuracy and availability of activity cost driver information. (correct)
  • It reduces the need for direct costs calculation.

How do ERP systems contribute to production planning and materials management?

  • By eliminating the need for JIT systems.
  • By linking production planning directly to organizational sales forecasts.
  • By facilitating communication along the supply chain. (correct)
  • By focusing solely on financial metrics.

What role does activity-based budgeting play in the context of ERP systems?

  • It does not require the collection of nonfinancial measures.
  • It anticipates demand and estimates practical capacity. (correct)
  • It focuses exclusively on financial indicators.
  • It relies only on historical data for planning.

Which of the following is NOT a feature of SAP’s R/3 system related to materials management?

<p>Facilitates uncoordinated inventory tracking. (B)</p> Signup and view all the answers

What is a challenge that activity-based costing systems face according to the content?

<p>Identifying accurate activity cost drivers can be difficult. (A)</p> Signup and view all the answers

Which characteristic of ERP systems contributes to improved process integrity?

<p>They collect nonfinancial measures as drivers through a formal process. (B)</p> Signup and view all the answers

What does activity-based costing allow businesses to do regarding direct costs?

<p>Attribute direct costs to specific products based on accurate drivers. (C)</p> Signup and view all the answers

What aspect of traditional production systems is regarded as a limitation?

<p>Their lack of integration within the organization. (A)</p> Signup and view all the answers

What is the primary goal of a manufacturing execution system (MES)?

<p>To provide production-focused real-time feedback (C)</p> Signup and view all the answers

What is a disadvantage of traditional production systems addressed by ERP systems?

<p>Inaccurate forecasting leading to excess inventory (D)</p> Signup and view all the answers

Which of the following processes is NOT part of Material Resource Planning (MRP)?

<p>Developing marketing strategies (A)</p> Signup and view all the answers

Which component does the Materials Management System NOT directly support?

<p>Human resources scheduling (B)</p> Signup and view all the answers

What is a major benefit of Just-in-Time (JIT) systems?

<p>Eliminating storage costs (C)</p> Signup and view all the answers

What does capacity planning primarily evaluate?

<p>Production goals against production capacity (C)</p> Signup and view all the answers

Which factor is essential for accurate production planning?

<p>Sales forecasts (B)</p> Signup and view all the answers

What does the acronym APS stand for in the context of materials management?

<p>Advanced Planning and Scheduling (B)</p> Signup and view all the answers

How does ERP enhance materials management efficiency?

<p>By integrating various databases and eliminating bottlenecks (C)</p> Signup and view all the answers

Which of these is NOT a function of the production planning system?

<p>Predicting market trends (C)</p> Signup and view all the answers

What role does collaborative demand management play in ERP systems?

<p>Aligning production plans with actual customer demand (D)</p> Signup and view all the answers

Which is a challenge faced by Atlantic Manufacturing as mentioned?

<p>Timeliness of change specifications (D)</p> Signup and view all the answers

In the context of ERP, what does demand management fundamentally address?

<p>Determining quantities and timings for production (D)</p> Signup and view all the answers

What aspect is prioritized in accurate production scheduling?

<p>Allocating specific facilities related to production (D)</p> Signup and view all the answers

Activity-based costing systems always rely on financial measures for accuracy.

<p>False (B)</p> Signup and view all the answers

ERP systems improve the reliability of cost driver information by integrating multiple systems.

<p>True (A)</p> Signup and view all the answers

The number of pallet moves is considered an indirect cost driver in materials handling.

<p>False (B)</p> Signup and view all the answers

Activity-based budgeting is solely focused on historical data from previous processes.

<p>False (B)</p> Signup and view all the answers

Traditional production systems typically provide a high level of integration within an organization.

<p>False (B)</p> Signup and view all the answers

ERP systems do not enhance communications along the supply chain.

<p>False (B)</p> Signup and view all the answers

Nonfinancial measures used as drivers in ERP systems are collected through a formal process.

<p>True (A)</p> Signup and view all the answers

Direct costs in activity-based costing can be calculated as part of overhead costs.

<p>False (B)</p> Signup and view all the answers

SAP’s R/3 system integrates production planning solely without links to material management.

<p>False (B)</p> Signup and view all the answers

The primary goal of activity-based budgeting is to reduce labor costs at any expense.

<p>False (B)</p> Signup and view all the answers

The primary objective of Just-in-Time systems is to maintain excess inventory levels.

<p>False (B)</p> Signup and view all the answers

The main advantage of integrating ERP systems is to increase lead times during production.

<p>False (B)</p> Signup and view all the answers

Material Resource Planning (MRP) utilizes estimated production goals to dictate when materials should be ordered.

<p>False (B)</p> Signup and view all the answers

In the 1960s through the 1980s, production systems were primarily focused on low-volume production of many products.

<p>False (B)</p> Signup and view all the answers

One of the problems with traditional production systems is the lack of integration between sales and production divisions.

<p>True (A)</p> Signup and view all the answers

Quality control in production systems only involves monitoring finished products and does not include incoming materials.

<p>False (B)</p> Signup and view all the answers

ERP systems enhance productivity by eliminating paperwork and bottlenecks in production processes.

<p>True (A)</p> Signup and view all the answers

Capacity planning simply estimates the amount of raw materials needed for production without considering production goals.

<p>False (B)</p> Signup and view all the answers

The main role of Material Management Systems is to solely track finished products.

<p>False (B)</p> Signup and view all the answers

Data collection systems within ERP support operational-level processes by providing real-time information.

<p>True (A)</p> Signup and view all the answers

Flashcards

ERP Systems & Activity-Based Costing

Integrating ERP systems with activity-based costing improves the accuracy and availability of activity cost driver information.

ERP & Production Planning/Materials Management

ERP systems facilitate communication along the supply chain for production planning and materials management.

Activity-Based Budgeting in ERP

Activity-based budgeting anticipates demand and estimates practical capacity within ERP systems.

SAP R/3 Materials Management - NOT

SAP’s R/3 system does NOT facilitate uncoordinated inventory tracking in materials management.

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Challenge of Activity-Based Costing

Identifying accurate activity cost drivers can be difficult in activity-based costing systems.

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ERP & Process Integrity

ERP systems improve process integrity by collecting nonfinancial measures as drivers.

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Activity-Based Costing & Direct Costs

Activity-based costing attributes direct costs to specific products based on accurate drivers.

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Traditional Production Systems - Limitation

Traditional production systems are limited by their lack of integration within the organization.

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Manufacturing Execution Systems (MES) Goal

The primary goal of an MES is to provide production-focused real-time feedback.

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Traditional Production Systems Disadvantage

Traditional production systems have a disadvantage due to inaccurate forecasting, leading to excess inventory.

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Material Resource Planning (MRP) - NOT

Developing marketing strategies is NOT part of Material Resource Planning (MRP).

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Materials Management System - NOT

Human resources scheduling is not directly supported by the Materials Management System.

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Just-in-Time (JIT) Systems Benefit

A major benefit of Just-in-Time (JIT) systems is the elimination of storage costs.

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Capacity Planning Focus

Capacity planning primarily evaluates production goals against production capacity.

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Production Planning & Accuracy

Accurate production planning depends on accurate sales forecasts.

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APS Acronym

APS stands for Advanced Planning and Scheduling in the context of materials management.

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ERP Materials Management Enhancement

ERP systems enhance materials management efficiency by integrating various databases and eliminating bottlenecks.

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Production Planning System - NOT

Predicting market trends is not a function of the production planning system.

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Collaborative Demand Management Role

Collaborative demand management in ERP systems aligns production plans with actual customer demand.

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Atlantic Manufacturing Challenge

A challenge for Atlantic Manufacturing is the timeliness of change specifications.

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Demand Management in ERP

Demand management in ERP addresses determining the quantities and timings for production.

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Accurate Production Scheduling Priority

Accurate production scheduling prioritizes allocating specific facilities related to production.

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Activity-Based Costing & Financial Measures

Activity-based costing systems do not always rely solely on financial measures for accuracy.

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ERP & Cost Driver Reliability

ERP systems improve the reliability of cost driver information by integrating multiple systems.

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Indirect Cost Driver (Materials Handling)

The number of pallet moves is considered an indirect cost driver in materials handling.

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Activity-Based Budgeting & Historical Data

Activity-based budgeting is not solely focused on historical data from previous processes.

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Traditional Production Systems Integration

Traditional production systems typically do not provide a high level of integration within an organization.

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ERP Impact on Communications

ERP systems enhance communications along the supply chain.

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ERP & Non-Financial Measures

Nonfinancial measures used as drivers in ERP systems are collected through a formal process.

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Direct Costs in ABC

Direct costs in activity-based costing are not calculated as part of overhead costs.

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SAP R/3 & Production/Materials Management

SAP’s R/3 system integrates production planning with materials management.

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Activity-Based Budgeting & Labor Costs

The primary objective of activity-based budgeting is not to reduce labor costs at any expense.

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Just-in-Time Systems & Inventory

The primary objective of Just-in-Time systems is not to maintain excess inventory levels.

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ERP Systems & Lead Times

Integrating ERP systems does not increase lead times during production.

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MRP & Production Goals

Material Resource Planning (MRP) does not use estimated production goals to dictate when materials should be ordered.

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1960s-1980s Production Focus

In the 1960s through the 1980s, production systems were not primarily focused on low-volume production of many products.

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Traditional Production Systems & Integration

One of the problems with traditional production systems is the lack of integration between sales and production divisions.

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Quality Control & Incoming Materials

Quality control in production systems includes monitoring incoming materials, not only finished products.

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ERP & Production Productivity

ERP systems enhance productivity by eliminating paperwork and bottlenecks in production processes.

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Capacity Planning & Raw Materials

Capacity planning evaluates production goals against production capacity, not just raw material needs.

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Material Management System & Finished Products

Material Management Systems do not solely track finished products; the focus is broader than just final products.

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Data Collection Systems in ERP

Data collection systems within ERP support operational-level processes by providing real-time information.

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