Operations & Supply Chain Management MCQ

Operations & Supply Chain Management

Q. "Quality is defined by the customer" is :

a) An unrealistic definition of quality

b) A user-based definition of quality

c) A manufacturing-based definition of quality

d) A product-based definition of quality

Prashant B. Kalaskar

Q. “ Zero defects in manufacturing …”

a) is a relevant goal only in electronic assembly

b) is readily achievable in all areas

c) is the goal of TQM

d) is an unobtainable and misleading idea

Q. A ____________ encompasses all activities associated

with the flow and transformation of goods from the raw

material stage, through to the end user, as well as the

associated information flows.

a) production line

b) supply chain

c) marketing channel

d) warehouse

Q. Which one of the following is not a typical question

dealt with by an operations managers?

a) How much capacity will be needed in the months

ahead?

b) What is a satisfactory location for a new facility?

c) How to motivate employees?

d) All are typical of operations decisions.

Q. Which of the following are not key attributes of supply

chain management?

a) inventory control

b) leveraging technology

c) customer power

d) all are key attributes

Q. Positive, long-term relationships between supply chain

participants refer to:

a) Coo-petition

b) Tailored Logistics

c) Partnerships

d) Supply Chain Management

Q. Which of the following statements is true of LEAN?

a) Lean principles focus on advanced statistical methods

b) Lean principles are separate body of knowledge

c) Lean principles have been developed over a lengthy

period of time.

d) Lean principles include reducing waste.

Q. According to the manufacturing-based definition of

quality

a) “Quality is the degree of excellence at an acceptable price

and the control of variability at an acceptable cost"

b) Quality depends on how well the product fits patterns of

consumer preferences

c) Even though quality cannot be defined, you know what it is

d) Quality is the degree to which a specific product conforms to

standards

Q. Cooperative supply chain relationships developed to

enhance the overall business performance of both

parties is a definition of:

a) Third-party logistics

b) Supply chain collaboration

c) Dovetailing

d) Relationship marketing

Q. Total Quality Management emphasizes

a) The responsibility of the Quality Control staff to identify

and solve all quality-related problems

b) A commitment to quality that goes beyond internal

company issues to suppliers and customers

c) A system where strong managers are the only decision

makers

d) A process where mostly statisticians get involved

Q. "Kaizen" is a Japanese term meaning

a) A Foolproof Mechanism

b) Just-in-time (JIT)

c) A Fishbone Diagram

d) Continuous Improvement

Q. Among the tools of TQM, the tool ordinarily used to aid

in understanding the sequence of events through which

a product travels is a…

a) Pareto chart

b) Flow chart

c) Check Sheet

d) Taguchi Map

Q. Which one of the following would not generally be

considered as an aspect of operations management?

• Work methods

• Secure financial resources

• Maintain quality

• Product or service design

Q. The inputs to a transformation process include all of the

following except

a) Material

b) People

c) Information

d) Assembly

Q. Which came last in the development of manufacturing

techniques?

a) Lean production.

b) Division of labor.

c) Mass production.

d) Interchangeable parts.

Q. When suppliers, distributors, and customers partner

with each other to improve the performance of the

entire system, they are participating in a ________

a) Channel Of Distribution

b) Value Delivery Network

c) Supply Chain

d) Supply And Demand Chain

Q. Which of the following is not an area of responsibility

for a logistics manager?

a) Inventory

b) Purchasing

c) Warehousing

d) Marketing

Q. To reduce inventory management costs, many companies use a

system called ________, which involves carrying only small

inventories of parts or merchandise, often only enough for a

few days of operation.

• Reduction-inventory Management

• Supply Chain Management

• Economic Order Quantity

• Just-in-time Logistics

Q. A Supply Chain which includes the Distribution of

finished products and services

a) Outbound Logistics

b) Inbound Logistics

c) Supply of Goods

d) Transportation

Q. In a SC, Material flows in one direction while

_________from in both direction

a) Process

b) Information

c) Product

d) Semi-finished Goods

Q. What name is often given to the Japanese “total quality

approach‟ to removing anything that does not add

value to the final product?

• Jobbing processes

• Lean production processes

• Continuous processes.

• Batch processes.

Q. A supply chain is a sequence of firms that perform

activities required:

a) to find products that are similar

b) to facilitate wholesalers inventory selections

c) to create synergy in their training programs

d) to create and deliver goods to consumers

Q. Today, a growing number of firms now outsource some

or all of their logistics to ________ intermediaries

a) Competitors

b) Third Party Logistics (3PL) Providers

c) Channel Members

d) Cross-functional Teams

Q. What are the two basic types of production systems?

a) Automated and manual

b) Intermittent and non-intermittent (Continuous) process

c) Normal and continuous process

d) Continuous process and batch

Q. What type of process would a paper mill be most likely

to use?

a) Continuous flow

b) Project

c) Job shop

d) Flow shop

Q. Which of the following is true?

a) Value is always lower than price.

b) Value is what consumers are prepared to pay.

c) Cost is always lower than price.

d) Price is always lower than value.

Q. Efficiency is defined by

a) Actual output divided by design capacity.

b) Capacity divided by utilization.

c) Effective capacity divided by actual output.

d) Actual output divided by effective capacity.

Q. As production systems move from projects to batch

production to mass production to continuous

production

a) Processes become more flexible

b) Customer involvement with the process increases

c) Products become more standardized

d) Demand volumes decrease

Q. A big advantage of a process layout is

• Its flexibility

• Its low cost

• The ability to employ low-skilled labour

• Its high equipment utilization

Q. Which of the following is an implication of low variety?

a) Low unit cost

b) Flexibility needed

c) High complexity

d) Matching customers specific needs

Q. Operations typically differ in terms of volume of output,

variety of output, variation in demand or the degree of

‘visibility’ (ie, customer contact) that they give to customers

of the delivery process. Please match the following element

with the most appropriate of the above dimensions. Low

unit costs are most closely matched to:-

a) Variety b) Variation c) Volume d) Visibility

Q. In a process flow chart transportation is depicted by

_________?

a) A circle

b) A square

c) A triangle

d) An arrow

Q. In a process flow chart storage of information is

depicted by ________?

a) A circle

b) A square

c) A triangle

d) An arrow

Q. A useful process improvement tool to search for the

root cause of a problem is the ___________ process?

a) 3 Whats

b) 4 Whos

c) 5 Whys

d) 6 Wheres

Q. A quality criterion which can be measured is called a

___________?

a) Quality variable

b) Quality component

c) Quality attribute

d) Quality characteristic

Q. Which of these is a quality variable for a motor car?

a) Comfort of the seating

b) Time to reach a given speed

c) Road holding ability

d) Headlights are working

Q. In a materials processing operation the design capacity

is defined as _____________?

a) The Minimum Output Per Given Time.

b) The Aggregate Annual Output.

c) The Theoretical Maximum Output in A Given Time.

d) The Most Likely Output In A Given Time.

Q. What additional factor does Overall Equipment

Effectiveness take into account which makes it more

meaningful than efficiency or utilization?

a) Flexibility

b) Speed

c) Cost

d) Quality

Q. Adjusting inputs to an operation so that outputs match

demand is known as ____________________?

a) A level capacity strategy

b) A demand management strategy

c) A chase demand strategy

d) A yield management strategy

Q. Having a 'happy hour' in a pub or restaurant is an

example of which type of capacity management?

a) A level capacity strategy

b) A demand management strategy

c) A chase demand strategy

d) A yield management strategy

Q. In the mass production era there were 4 types of

operations process; complex project, batch production,

assembly line and ____________?

a) Job shop

b) Simple project

c) Mass process

d) Continuous flow process

Q. In a materials processing operation, which of the

following process type is associated with the highest

volume and lowest variety?

a) Job shop

b) Batch process

c) Mass process

d) Continuous process

Q. In a materials processing operation, which process is

associated with the highest variety?

a) Project

b) Job shop

c) Batch process

d) Mass production

Q. A sequence of business and information links is called a

________?

a) Logistics network

b) Distribution network

c) Sales channel

d) Supply chain

Q. Supply chains link operators to suppliers in _________?

a) Layers

b) Groups

c) Tiers

d) Vertical Layer

Q. Activities which are undertaken before the final

operation are termed _______ activities.

a) Upstream

b) Primary

c) Secondary

d) Downstream

Q. In the automotive supply chain information flows in

which direction?

a) Towards the end user only

b) Towards the supplier only

c) Between the end user and the operation only

d) Both towards the end user and the supplier

Q. How do automotive companies mainly sell their new

products?

a) Over the internet

b) Through retail distributers

c) Via a trade magazine

d) Directly to customers

Q. Selecting suppliers and purchasing items is called ____?

a) Negotiation

b) Procurement

c) Contracting

d) Selection

Q. The main benefit to an operation of having multiple

sourcing is ______?

a) Consistent quality

b) Speed of delivery

c) Continuity of supply

d) Flexibility of products

Q. Which of the following is an advantage of single

sourcing?

a) Continuity of supply

b) Ability to keep prices down

c) Increased flexibility of supply

d) Lower administration cost

Q. When an organization owns its suppliers it is known as

________?

a) Downstream supplier collaboration

b) Backward vertical integration

c) Forward vertical integration

d) Upstream supplier collaboration

Q. Logistics is the term for which activities?

a) Procurement of raw materials

b) Distribution of goods to customers

c) Accounting for raw materials in transit

d) All of the above

Q. The Japanese term for waste is ____________?

a) Muri

b) Kanban

c) Muda

d) Kaizen

Q. The Japanese term “Muri” means ____________?

a) The Overburden

b) The Unevenness

c) Leveling of Production

Q. The Japanese term “Kanban” means ____________?

a) Visual Depicts

b) Visual Cards

Q. In the Japanese term “Kaizen”, “Kai” means _________?

a) Performance

b) Change

c) Improvement

d) Standards

Q. The Japanese term “Jidoka” means ____________?

a) Manual Correction

b) Automation

c) Autonomation

Q. The Japanese term “Mura” means ____________?

a) The Overburden

b) The Unevenness

Q. The Japanese term “Hiejunka” means ____________?

a) The Overburden

b) The Unevenness

Q. In Visual Management, the Orange Colour marking on

the floor indicates…

a) Materials for Inspection

b) Materials as Scrap

c) WIP Materials

d) Finished Goods

Q. In Visual Management, the Green Colour marking on the

floor indicates…

c) WIP Materials

d) Finished Goods

Q. In Visual Management, the Red Colour marking on the

floor indicates…

c) WIP Materials

d) Finished Goods

Q. Edward Deming says, Quality is the responsibility of…

a) Suppliers supplying raw materials (inputs)

b) Operators working in Operations Department

c) Engineers designing quality Design

d) Everyone working for the Organization

Q. Quality can be also defined as _____________

a) Value/Benefits (V/B)

b) Benefits/Cost (B/C)

c) Performance/Expectations (P/E)

d) Performance/Value (P/V)

• Q. Toyota Production System (TPS) developed by

_______ & _______

a) Eiji Toyoda

b) Taiichi Ohno

c) Genchi Genbutsu

d) a & b

e) a & c

f) b & c

Q. Operation Research, a Multidisciplinary approach was

evolved in WWII to 1960’s for _________

a) Problem Solving

b) Problem Research

c) Problem Definition

d) Problem Identification

Q. Henry Gantt - recognized the value of nonmonetary

rewards to motivate workers, and developed a widely

used system for scheduling, called Gantt charts

a) Nonmonetary Rewards

b) Monetary Rewards

c) Employee Motivation

d) Flow Charts

Q. The concept of “Interchangeable Parts” was applied by

a) Henry Ford

b) Charles Babbage

c) Eli Whitney

d) F W Taylor

Q. In 1776 -Specialization of labor in manufacturing was

introduced by

a) Henry Ford

b) Adam Smith

c) Eli Whitney

d) F W Taylor

Q. In 1832 -Division of labor by skill; assignment of jobs by

skill; basics of time study was introduced by

a) Charles Babbage

b) Adam Smith

c) Eli Whitney

d) F W Taylor

Q. In 1900- Scientific management time study and work

study developed; dividing planning and doing of work

was introduced by

a) Charles Babbage

b) Adam Smith

c) F W Taylor

d) Frank B. Gilbreth

Q. Operation is a ________ process designed to convert

input in to a valuable Product or Service

a) Conversion

b) Transformation

c) Transition

d) Production

Q. In a Process Strategy, High Variety & Low Volume

should focus on ____________

a) Processes

b) Product

c) Both a & b

d) None of the above

Q. In a Process Strategy, Low Variety & High Volume

should focus on ____________

a) Processes

b) Product

c) Both a & b

Q. which of the following are the Determinants of Process

Characteristics

a) Volume

b) Variety

c) Flow

d) All of the above

Q. The project process requires a _________

a) Matching Volume to Variety

b) High Degree of Job Customization

c) High Degree of Flexibility

d) Job Repetition & Rotation

Q. Similar products or services are manufactured

repeatedly using intermittent flow is called as…..

a) Batch Production

b) Continuous Production

c) Job Shop Production

d) Project Production

Q. Production of Automobiles, Electronic Appliances,

Personal Computers & Toys like products are

manufactured using __________

• Continuous Flow

• Line Flow

• Job Shop Flow

• Batch Flow

Q. Vertical integration or outsourcing to manage with

Operations & Supply is a decision also called as_____

a) Expansion of Business

b) Backward Integration

c) Make or Buy Decision

d) Outsourcing Decision

Q. A Layout designed to Product which is too large to

move is example of _______

a) Process layout

b) Product Layout

c) Fixed Product Layout

d) Hybrid Layout

Q. A Layout designed to Group similar resources together

is example of _______

a) Process layout

b) Product Layout

d) Hybrid Layout

Q. A Layout designed to produce a specific product, or a

small number of products efficiently is example of

_______

a) Process layout

b) Product Layout

d) Hybrid Layout

Q. When Volume of Production is High (Mass Production)

then ___________ is Feasible.

a) Product Layout

b) Process Layout

c) Fixed Layout

d) Flexible Layout

Q. When Volume of Production is _______ then Process

Layout is Feasible

a) High

b) Medium

c) Low

d) Average

Q. The resources arranged are as __________ to each

product for smooth component flow in each job shop

a) Dedicated

b) Shared

c) Arranges one per each department

d) Arranged Systematically

Q. Private Sector banks follow __________

a) Process layout

b) Mixed Layout

c) Product Layout

d) Customer Service Layout

Q. Public Sector banks follow __________

a) Process layout

b) Mixed Layout

c) Product Layout

d) Customer Service Layout

Q. Service blueprint is a ________ that accurately portrays

the service system to provide better services to people

a) Projection

b) Blue Print

c) Diagram/Design

d) None of the Above

Q. In service blue printing, __________ is where the

customer directly interacts with the service providers

a) Line of Services

b) Line of Interaction

c) Line of Internal Interaction

d) Lobby

Q. In service blue printing, __________ is where the service

providers interacts with the service supporters

a) Line of Services

b) Line of Interaction

d) Lobby

Q. Beyond this line, the customer can not see the activities

of service providers

a) Line of Interaction

b) Line of Visibility

d) Line of Usability

Q. In the first instance, __________ allows the customer to

make a decision on quality of services as per service blue

a) Line of Interaction

b) Front Stage Actions

d) Physical Evidences

Q. Lean production relies on a specific throughput rate of

the whole operation. This is known as _____________?

a) Output time

b) Throughput time

c) Kanban time

d) Takt time

Q. Reducing unnecessary motion in operations can

significantly improve throughput. Making these

improvements is known as ____________?

a) Eco-motion

b) Ergonomics

c) Economics

d) Empowerment

Q. Which of these is not one of the 5 principles of lean

production?

a) Specify value to the customer

b) Identify the value stream

c) Push goods through to completion

d) Strive for perfection

Q. One of the tools of lean production is SMED. What does

this stand for?

a) Single Minute Engineering Design

b) Single Motion Engineering Design

c) Simple Motion and Exchange of Die

d) Single Minute Exchange of Die

Q. Lean production primarily delivers cost and

___________ to an operation?

a) Flexibility

b) Speed

c) Quality

d) Dependability

Q. The sequence of a typical manufacturing supply chain is

a) Storage–Supplier–manufacturing–storage–distributor–retailer–

customer

b) Supplier–Storage-manufacturing–storage–distributor–retailer–

customer

c) Supplier–Storage-manufacturing– distributor–storage–retailer–

customer

d) Supplier–Storage-manufacturing–storage– retailer–distributor–

customer

Q. Logistics is the part of a supply chain involved with the

forward and reverse flow of

a) Goods

b) Services

c) Cash

d) All of the Above

Q. In Supply Chain Management, VMI stands for _____

a) Vendor Material Inventory

b) Vendor Managed Inventory

c) Variable Material Inventory

d) Valuable Material Inventory

Q. Reverse logistics is required because

a) Goods are defective

b) Goods are unsold

c) The customers simply changed their minds

d) All of the above

Q. Organizations generally use demand forecasting to

develop

a) Financial Plans

b) Facilities Plans

c) Marketing Plans

d) All of the above

Q. Which of the following is used for identifying the total

resources requirement for meeting market demand

a) Capacity Planning

b) MRP-I

c) MRP-II

d) Inventory Management

Q. MRP through MPS, ensures availability of required raw

materials at the point of utilization. Thus MRP ensures..

a) Better Customer Services and delivery of value

b) To reduce cost of manufacturing

c) To improve schedule of maintenance

d) To improve performance of financial department

Q. Production Planning includes;

a) Orders booking from market

b) Planning production budget

c) Operation Layout

d) All of the Above

Q. The last step in production control is..

a) Tools & Techniques

b) Dispatching

c) Scheduling

d) Time Estimating

Q. The correct sequence of operations in production

planning and control is…

a) Routing-Scheduling-Dispatching-Follow up

b) Scheduling-Routing-Dispatching-Follow up

c) Dispatching-Routing-Scheduling-Follow up

d) Routing-Scheduling-Follow up-Dispatching

Q. Which of the Following is true for Routing

a) It is the flow of work in the plant

b) Route sheets include list of machines and tools to follow

c) It depends upon material handling facilities

d) All of the above

Q. Loading in operations means..

a) Sending the raw materials to the machines

b) Sending the finished materials to the store

c) Assigning the work to the facilities

d) Uploading the software in machine control panel

Q. Dispatching authorizes the start of production

operations by..

i) Release of materials and components from store to floor

ii) Release of materials from process to the process

iii) Issue of drawings instruction sheets

Which of the above is true

a) Only I b) Only ii c) I & ii d) i, ii & iii

Q. Bills of Materials consists of

a) Part number

b) Part Specification

c) Price of the part

d) All of the above

Q. Procurement cycle time is time consumed for..

a) Receiving of Raw Materials

b) Inspection of the received Materials

c) Storage of Materials

d) All of the Above

Q. Master Production Schedule allows

a) Schedule of dispatch of Materials –MRP-I

b) Schedule of sequencing and loading of facilities-MRP-II

c) Capacity Requirement Planning-CRP

d) All of the above

Q. Gantt Chart is mainly useful for the …

a) Routing

b) Scheduling

c) Follow up

d) Inspection & Quality Control

Q. The process of comparing output to the previously

decided plans as well set standards is to determine if

corrective actions is needed is called as…

a) Production Planning

b) Production Scheduling

c) Production Forecasting

d) Production Control

Q. Master Production Scheduling step achieved after

aggregate planning requires…

a) Disaggregating the Aggregate Plan

b) Sub Optimization of Demand

c) Strategy Formulation

d) Rough Cut Capacity Planning

Q. ___________ is the ability of the manufacturing

organizations to meet the demand of market

a) Priority

b) Capacity

c) Forecasting

d) Control

Q. The __________ is the plan for the production of

individual end items per day, per week, per month on

long time horizon

a) JIT

b) MPS

c) MRP-I

d) DRP

Q. A ________ Strategy means producing exactly what is

demanded in the market by the customers at a given

a) Chase

b) Production Leveling

c) Sub Contracting

d) TQM

Q. _______ is the first step in PPC system

a) Production Planning

b) Forecasting

c) Inventory Management

d) Dispatching of the Materials

Q. The main objective of PPC is to ensure..

a) Smooth Flow of Materials

b) Intermittent Flow Materials

c) Continuous Flow Materials

d) Job Flow Materials

Q. Which of the following is not the technique of

Forecasting

a) Simple Moving Average Method

b) Exponential Smoothing factor

c) Weighted Moving Average Method

d) Market Potential

Q. In the _____________ environment, several product

options exist (e.g., automobiles) and the customer is not

willing to wait until the product is made. Therefore

manufacturers produce and stock standard component

parts.

a) make-to-order c) Production leveling

b) make-to-stock d) assemble to order

Q. __________ is also called as part list or building list is

the document generated at the design stage

a) MPS

b) BoM

c) MRP-I

d) MRP-II

Q. Purchasing is the task of buying 5R’s of materials then

Procurement is _______________

a) Receiving of the Materials at Store

b) Checking of Materials with placed orders

c) Storing the materials in the store/warehouse

d) All of the above

Q. Moving from the aggregate plan to a master production

schedule requires

a) Rough Cut Capacity Planning

b) Sub-optimization

c) Disaggregation

d) Strategy Formulation

Q. Identifying the path of how a product is manufactured

right from input & raw material into finished product ,

this process is known as __________

a) Routing

b) Scheduling

c) Loading

d) Planning

Q. Process consisting of assignment of standing and

completion times for various operations to be

performed this process is called as____

a) Routing

b) Scheduling

c) Loading

d) Planning

Q. Which scheduling technique should be employed when

due dates are important for a job order?

a) Forward Scheduling

b) Loading

c) Dispatching

d) Backward Scheduling

Q. Which of the following is not an effectiveness criterion

for scheduling?

a) Maximizing Flow Time

b) Minimizing Completion Time

c) Minimizing WIP Inventory

d) Maximizing Utilization

Q. Forward scheduling…

a) begins with a delivery date, then each operation is

offset one at a time, in reverse order

b) is well suited where the supplier is usually able to meet

precise delivery dates

c) tends to minimize in-process inventory

d) assumes that procurement of material and operations

start as soon as requirements are known

Q. A strategy which aims to produce a perfect product

which will suit everybody is called

a) Marketing orientation.

b) Production orientation.

c) Product orientation.

d) Perfection orientation.

Q. A strategy which aims to produce the maximum amount

of goods at the lowest possible price is called:

a) Production orientation.

b) Selling orientation.

c) Societal marketing.

d) Cost orientation.

Q. Which of the following is true?

a) Value is always lower than price.

b) Value is what consumers are prepared to pay.

c) Cost is always lower than price.

d) Price is always lower than value

Q. A measure of the reserve capacity a process has to

handle in unexpected increases in demand is the:

a) Capacity utilization rate.

b) Capacity cushion.

c) Capacity bottleneck.

d) Capacity constraint limit.

Q. Efficiency is given by

a) Actual output divided by design capacity.

b) Capacity divided by utilization.

c) Effective capacity divided by actual output.

d) Actual output divided by effective capacity.

Q. Costs that continue even if no units are produced are

called

a) Variable costs.

b) Mixed costs.

c) Marginal costs.

d) Fixed costs.

Q. A facility with a design capacity of 1,000 units, an actual

average of 800 units, and effective capacity of 850 units

has a utilization of _______ .

a) 85%

b) 80%

c) 125%

d) 94%

Q. The master production schedule is the schedule of

production for what level product/material?

a) Level 0

b) Level 1

c) Level 2

d) Level 3

Q. In a distribution requirements planning environment,

forecasted demand at the plant level is equal to ______

in the distribution center level.

a) Scheduled receipts

b) Planned receipts

c) Planned orders

Q. A lot-sizing technique that generates exactly what was

required to meet the plan is

a) The Wagner-Whitin algorithm.

b) Economic order quantity.

c) Lot-for-lot.

d) Part period balancing.

Q. The difference between a gross material requirements plan

(gross MRP) and a net material requirements plan (net MRP) is

a) The net MRP includes consideration of the inventory on hand,

whereas the gross MRP does not.

b) b) The gross MRP doesn't take taxes into account, whereas the

net MRP includes the tax considerations.

c) c) The gross MRP may not be computerized, but the net MRP

must be computerized.

d) The gross MRP includes consideration of the inventory on

hand, whereas the net MRP does not.

Q. An example of purchasing costs include

a) Incoming Freight

b) Storage Costs

c) Insurance

d) Spoilage

Insurance

Q. If demand of one year is 25000 units, relevant ordering

cost for each purchase order is INR 210 and carrying cost

of one unit of stock is INR 25 then economic order

quantity is

a) 678 packages c) 658 Packages

b) 668 Packages d) 648 Packages

Q. Activities related to coordinating, controlling and

planning activities of flow of inventory are classified as

a) Decisional Management

b) Throughput Management

c) Inventory Management

d) Manufacturing Management

Q. Required rate of return is multiplied per unit cost of

purchased units for calculating

a) Irrelevant Inventory Carrying Costs

b) Relevant Opportunity Cost Of Capital

c) Relevant Purchase Order Costs

d) Relevant Inventory Carrying Costs

Q. Systematic flow of services, goods or information from

buying material for product delivery to customers is

known as

a) Supply Chain

b) Value Chain

c) Material Flow Chain

d) Manufacturing Flow Chain

Q. Costs associated with storage of finished goods such as

spoilage, obsolescence and insurance of goods are

classified as

a) Carrying Costs

b) Purchasing Costs

c) Stock-out Costs

d) Ordering Costs

Q. Costs of goods are acquired from suppliers is classified

a) Stock-out Costs

b) Ordering Costs

c) Carrying Costs

d) Purchasing Costs

Q. If economic order quantity for one time is 15000

packages and demand in units for one year are 15000

units then number of deliveries in a year will be

Q. Decision model to calculate optimal quantity of

inventory to be ordered is called

a) Efficient Order Quantity

b) Economic Order Quantity

c) Rational Order Quantity

d) Optimized Order Quantity

Q. A regular check on Book entry and physical stocks in

hand must be done to..

a) Place the order

b) To check exact availability of stocks

c) To decide the reorder point

d) To control the stock movement

Q. Inventory carried for the purpose of providing

flexibility to each decision-making unit to manage its

operations independently is known as….

a) Safety inventory

b) Pipeline inventory

c) Decoupling inventory

d) Cycle inventory

Q. The inventory which is dependent on alternative modes

of transportation is known as

a) Decoupling inventory

c) Safety inventory

d) Cycle inventory

Q. In an automobile manufacturing facility, the

management has brought down the cost of ordering of

automotive components from Rs 500 to Rs 50 through

the introduction of electronic ordering. The annual

demand of cars is 15,000 units. Inventory carrying cost of

automotive components is Rs 20 per unit per year. The

inventory turnover ratio in both the cases would be

a) 35.64 and 111.48 c) 36.64 and 112.48

b) 33.64 and 107.48 d) 34.64 and 109.48

Q. Higher demand uncertainty provides higher savings by

pooling which of the following inventory?

a) Safety inventory

c) Decoupling inventory

d) Cycle inventory

Q. Which of the following is true for inventory control

a) EOQ has minimum totals costs per order

b) Inventory Carrying cost increases with quantity/order

c) Ordering cost decreases with increase in quantity/order

d) All of the above

Q. The time period between placing the order and

receiving the placed order is called as..

a) Waiting Time

b) Takt Time

c) Cycle Time

d) Lead Time

Q. A firm's inventory turnover (IT) is 5 times on a cost of

goods sold (COGS) of $800,000. If the IT is improved to 8

times while the COGS remains the same, a substantial

amount of funds is released from or additionally

invested in inventory. In fact,

a) $160,000 is released d) $60,000 is released.

b) $100,000 is additionally invested.

c) $60,000 is additionally invested

Q. If EOQ = 360 units, order costs are $5 per order, and

carrying costs are $.20 per unit, what is the annual usage

in units?

a) 129,600 units c) 25,920 units

b) 2,592 units d) 18,720 units

Q. Costs of not carrying enough inventory include

a) Lost Sales

b) Customer Disappointment

c) Possible Worker Layoffs

d) All of the above

Q. Receiving a required inventory item at the exact time

needed.

a) ABC Analysis

b) JIT

c) FOB

d) PERT

Q. The two basic questions in inventory management are

how much to order and when to order.

a) True

b) False

Q. Using the EOQ model, if an item's holding cost

increases, its order quantity will decrease.

a) True

b) False

Q. With the A-B-C approach, items which have high unit

costs are classified as A items.

a) True

b) False

Q. When using EOQ ordering, the order quantity must be

computed in every order cycle.

a) True

b) False

Q. Holding and ordering costs are inversely related to each

other..

a) True

b) False

Q. In the basic EOQ model, annual ordering cost and

annual ordering cost are equal for the optimal order

quantity.

a) True

b) False

Q. Increasing the order quantity so that it is slightly above

the EOQ would not increase the total cost by very much.

a) True

b) False

Q. The first activity of purchasing cycle is..

a) Source Selection & Negotiation

b) Communicating the Requirement to the Suppliers

c) Recognizing the need of Procurement

d) Inspection of the Goods

Q. Raw Materials & WIP can be classified as

a) Direct Materials

b) Indirect Materials

c) Finished Materials

d) Standard Materials

Q. Which of the following is a function of inventory?

a) to provide a stock of goods that will provide a selection

for customers

b) to take advantage of quantity discounts

c) to hedge against inflation

d) all of the above are functions of inventory

Q. All of the following statements about ABC analysis are

true except

a) inventory may be categorized by measures other than

dollar volume

b) it categorizes on-hand inventory into three groups

based on annual dollar volume

c) it is an application of the Pareto principle

d) it states that all items require the same degree of

control

Q. Which of the following statements about the basic EOQ

model is true?

a) If the ordering cost were to double, the EOQ would rise.

b) If annual demand were to double, the EOQ would

increase.

c) If the carrying cost were to increase, the EOQ would fall

d) All of the above statements are true.

Q. Which of the following statements about the basic EOQ

model is false?

a) If the setup cost were to decrease, the EOQ would fall.

b) If annual demand were to increase, the EOQ would

increase.

c) If the ordering cost were to increase, the EOQ would

d) If annual demand were to double, the EOQ would also

double.

Q. Extra units that are held in inventory to reduce stock-

outs are called

a) Just-in-time inventory.

b) Reorder point.

c) Demand variance.

d) Safety stocks.

Q. Which of the following is NOT a type of inventory?

a) MRP

b) Finished goods

c) Raw material

d) Work-in-process

Q. A system that triggers ordering on a uniform time basis

is called a_____________

a) Fixed-quantity Order system.

b) Reorder point Order system.

c) Fixed-period Order system.

d) EOQ.

Q. Logistic network through which unwanted or excess

products by resellers or consumers is classified as

a) Inbound Distribution

b) Outbound Distribution

c) Forward Distribution

d) Reverse Distribution

Q. Process of managing upstream and downstream of final

goods, flow of raw materials and information about

resellers and final consumers is classified as

a) Marketing Logistics Network

b) Supply Chain Management

c) Delivery Network

d) Physical Distribution Network

Q. All of the following costs are likely to decrease as a

result of better quality except

a) Customer Dissatisfaction Costs

b) Maintenance Costs

c) Scrap Costs

d) Warranty And Service Costs

Q. Inspection, scrap, and repair are examples of

a) Internal Costs

b) External Costs

c) Costs of Dissatisfaction

d) Societal Costs

Q. If a customer visiting a departmental store cannot find

his desired soap manufactured by Hindustan Unilever

Ltd (HUL) in the store, which of the following chain

partner will he hold responsible for the non-availability

of the soap?

a) The logistics service provider

b) The suppliers of raw materials and components

c) The distributor

d) Hindustan Unilever Ltd

e) The departmental store

Q. Pareto charts are used to

a) Identify Inspection Points In A Process

b) Outline Production Schedules

c) Organize Errors, Problems Or Defects

d) Show Material Flow

Q. The purpose of supply chain management is

a) Provide Customer Satisfaction

b) Improve Quality Of A Product

c) Integrating Supply And Demand Management

d) Increase Production

Q. Due to small change in customer demands, inventory

oscillations become progressively larger looking

through the supply chain. This is known as

a) Bullwhip effect

b) Netchain analysis

c) Reverse logistics

d) Reverse supply chain

Q. VMI stands for

a) Vendor Material Inventory

b) Vendor Managed Inventory

c) Variable Material Inventory

d) Valuable Material Inventory

Q. The major decision areas in supply chain management

a) Location, Production, Distribution, Inventory

b) Planning, Production, Distribution, Inventory

c) Location, Production, Scheduling, Inventory

d) Location, Production, Distribution, Marketing

Q. Distribution requirement planning is a system for

a) Inventory management

b) Distribution planning

c) Both ‘a’ and ‘b’

Q. Which of the following sequence is true?

a) Sourcing → Outbound logistics → Conversion into finished goods → Inbound logistics → Retailing

b) Sourcing → Inbound logistics → Outbound logistics → Conversion into finished goods → Retailing

c) Inbound logistics → Sourcing → Conversion into finished goods → Outbound logistics → Retailing

d) Sourcing → Conversion into finished goods → Inbound logistics → Outbound logistics → Retailing

e) Sourcing → Inbound logistics → Conversion into finished goods → Outbound logistics → Retailing

Q. Supply chain is concerned with the

a) Flow Of Raw Materials, WIP And Finished Products In The Forward Direction

b) Flow Of Information In Both The Directions

c) Flow Of Cash In The Reverse Direction

d) Flow Of Materials In The Forward Direction And That Of Cash In The Reverse

Direction

e) Flow Of Materials In The Forward Direction, Cash In The Reverse Direction And

Information In Both The Directions

Q. The objective of a supply chain is:

a) to improve the efficiency across the whole supply chain

b) to improve responsiveness across the whole supply chain

c) to deliver improved value to the customers

d) to improve the efficiency and responsiveness across the whole supply chain and

also deliver improved value to the customers

e) to improve the responsiveness across the whole supply chain and deliver improved

value to the customers

Q. In today’s supply chain, there has been a shift in the

power structure in a chain towards

a) Third-party logistics service providers

b) Distributors

c) Manufacturers

d) Retailers

e) Raw-material suppliers

Q. The companies will realize the benefits of implementing

IT when which of the following is undertaken?

a) Companies need to invest heavily in information systems.

b) Companies need to automate the existing supply chain systems and processes.

c) Companies need to re-engineer their supply chain structure.

d) Companies need to undertake revision in the supporting organizational processes.

e) Companies need to re-engineer their supply chain structure and undertake revision

in the supporting organizational processes.

Q. Ford supply chain is characterized by

a) Vertical integration

b) Increased product variety

c) Individual customization

d) Long-term relationship with the suppliers

e) Loosely-held supplier networks

Q. Toyota supply chain is characterized by

a) Zero product variety

b) Individual customization

c) Long-term relationship with the suppliers

d) Loosely-held supplier networks

e) Vertical integration

Q. Dell supply chain is characterized by

a) Individual customization

b) Vertical integration

c) Zero product variety

d) Lean production systems

e) Long-term relationship with the suppliers

Q. Which one of the following is not the supply challenge

being faced by the Indian organizations?

a) Smaller pack sizes

b) Complex taxation structure

c) Poor infrastructure

d) Complex distribution structure

e) IT implementation

Q. A supply chain is a sequence of firms that perform

activities required:

a) to find products that are similar

b) to facilitate wholesalers inventory selections

c) to create synergy in their training programs

d) to create and deliver goods to consumers

e) to support the acquisition of raw materials

Q. An important feature of supply chain management is its

application of electronic commerce technology that

allows companies to share and operate systems for:

a) order processing, transportation scheduling, and

inventory management.

b) cost-effective flowing of raw materials

c) future purchasing of computer systems

d) future merger opportunities

e) prospecting new business ventures.

Q. A supply chain is essentially a sequence of linked:

a) customer and prospects

b) supplier and manufacturer

c) suppliers and customers

d) warehousing and wholesaling units

e) events in the marketing process

Q. In the automotive industry, the person who is

responsible for translating customer requirements into

actual orders and arranges delivery dates is the car

maker:

a) Supply Manager

b) Purchasing Manager

c) Production Manager

d) Supply Chain Manager

e) VP For Production

Q. Pricing interacts with a supply chain in many ways. For

instance, transportation rate structures are adjusted by

the carrier based on

a) Cost To Unload

b) The Size Of The Shipment

c) Local Currency Rates

d) The Logistics Costs Concept

Q. The total logistics cost includes expenses associated

with transportation, materials handling and

a) Customer Complaints, Cost Of Food And Highway Usage

b) Warehousing, Inventory, Stock Outs And Order Processing

c) Inventory Control With Sales Forecasting

d) Stock Outage Control With Sales Forecasting

e) Historical Figures Weighted By Last Years Numbers

Q. Lead time and order cycle time are the same as

a) Customer Service Time

b) Supply Chain Flow

c) Logistical Clockage

d) Replenishment Time

e) Real Time Service Time

Q. Examples of third-party logistics providers are

a) FedEx and Rosenau Transport

b) Sentinel Self-Storage and UPS

c) FedEx and UPS

d) UPS and Metro Van Lines

e) Purolator and Metro Van Lines

Q. _____ is the integration and organization of information

and logistics across firms in a supply chain for the

purpose of creating and delivering goods and services

that provide value to consumers.

a) Supply chain management

b) Logistics management

c) Point-to-point management

d) Just-in-time management

e) Cost-effective flow

Q. With which customer service factor are quick response

and efficient consumer response delivery systems most

closely related?

a) Time

b) Dependability

c) Inventory Costs

d) Communication

e) Convenience

Q. Traditionally, stores have carried inventory to

a) Prevent Strikes Or Product Shortages.

b) Provide Better Service For Those Customers Who Wish

To Be Served On Demand.

c) Eliminate Forecasting Uncertainty.

d) Terminate Production Economies.

e) Avoid Purchasing And Transportation Discounts.

Q. Supply chain management impacts all of the following

aspects of the marketing mix strategy EXCEPT

a) The Target Market Selection Decision.

b) Product Mix Decisions.

c) Pricing Decisions.

d) Promotion Decisions.

e) Distribution Decisions.

Q. n online retailer like Amazon.com relies on an efficient

supply chain. The development of its supply chain

supported its clearly defined marketing strategy and

began with:

a) Inventory Forecasts.

b) A Logistics Mission Statement.

c) The Mature Stage Of The Product Life Cycle.

d) Understanding The Customer.

e) None Of The Above.

Q. In physical distribution decisions, total logistics cost

includes:

a) Order Processing.

b) Materials Handling And Warehousing.

c) Transportation.

d) Inventory And Stockouts.

e) All Of The Above.

Q. Combining different transportation modes in order to

get the best features of each is called

a) Freight Forwarding.

b) Dual Distribution.

c) Intermodal Transportation.

d) Bimodal Logistics.

e) Intra-modal Transport.

Q. A warehouse that emphasizes speed and efficient

product flow to hold goods for short periods of time

and move them out as soon as possible:

a) is a storage warehouse.

b) is a freight forwarder.

c) is a distribution centre.

d) is an inventory expediting centre.

e) has a just-in-time inventory system.

Q. The impact of cost reduction on profits is much larger

than the impact of increased

a) Innovation.

b) Production.

c) Information.

d) Sales.

Operations & Supply Chain Management MCQ

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