205 OSCM

Q.1"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

Q.2 “ 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.3 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.4 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.5 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.6 Positive, long-term relationships between supply chain participants refer to:
a) Coo-petition
b) Tailored Logistics
c) Partnerships
d) Supply Chain Management

Q.7 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.8 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.9 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.10 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.11 "Kaizen" is a Japanese term meaning

a) A Foolproof Mechanism
b) Just-in-time (JIT)
c) A Fishbone Diagram
d) Continuous Improvement

Q.12 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.13 Which one of the following would not generally be considered as an aspect of
operations management?
a)Work methods
b)Secure financial resources
c)Maintain quality
d)Product or service design
Q.14 The inputs to a transformation process include all of the following except
a) Material
b) People
c) Information
d) Assembly

Q.15 Which came last in the development of manufacturing techniques?

a) Lean production.
b) Division of labor.
c) Mass production.
d) Interchangeable parts.

Q.16 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.17 Which of the following is not an area of responsibility for a logistics manager?
a) Inventory
b) Purchasing
c) Warehousing
d) Marketing Dr.

Q.18 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.
a) Reduction-inventory Management
b)Supply Chain Management
c)Economic Order Quantity
d)Just-in-time Logistics

Q.19 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.20 In a SC, Material flows in one direction while _________from in both direction
a) Process
b) Information
c) Product
d) Semi-finished Goods
Q.21 What name is often given to the Japanese “total quality approach‟ to removing anything
that does not add value to the final product?
a) Jobbing processes
b) Lean production processes
c)Continuous processes.
d)Batch processes.

Q.22 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.23 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.24 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.25 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.26 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.27 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.28 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.29 A big advantage of a process layout is

a)Its flexibility
b)Its low cost
c)The ability to employ low-skilled labour
d)Its high equipment utilization

Q. 30 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.31Operations 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.32 In a process flow chart transportation is depicted by _________?

a) A circle
b) A square
c) A triangle
d) An arrow

Q.33 In a process flow chart storage of information is depicted by ________?

a) A circle
b) A square
c) A triangle
d) An arrow
Q.34 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.35 A quality criterion which can be measured is called a ___________?

a) Quality variable
b) Quality component
c) Quality attribute
d) Quality characteristic

Q.36 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.37 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.38 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.39 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.40 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.41 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.42 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.43 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.44 A sequence of business and information links is called a ________?

a) Logistics network
b) Distribution network
c) Sales channel
d) Supply chain

Q.45 Supply chains link operators to suppliers in _________?

a) Layers
b) Groups
c) Tiers
d) Vertical Layer

Q.46 Activities which are undertaken before the final operation are termed _______
activities.
a) Upstream
b) Primary
c) Secondary
d) Downstream

Q.47 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.48 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.49 Selecting suppliers and purchasing items is called ____?

a) Negotiation
b) Procurement
c) Contracting
d) Selection

Q.50 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.51 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.52 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.53 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.54 The Japanese term for waste is ____________?

a) Muri
b) Kanban
c) Muda
d) Kaizen
Q.55 The Japanese term “Muri” means ____________?
a) The Overburden
b) The Unevenness
c) Leveling of Production
d) Continuous Improvement

Q.56 The Japanese term “Kanban” means ____________?

a) Visual Depicts
b) Visual Cards
c) Leveling of Production
d) Continuous Improvement

Q.57 In the Japanese term “Kaizen”, “Kai” means _________?

a) Performance
b) Change
c) Improvement
d) Standards

Q.58 The Japanese term “Jidoka” means ____________?

a) Manual Correction
b) Automation
c) Autonomation
d) Continuous Improvement

Q.59 The Japanese term “Mura” means ____________?

a) The Overburden
b) The Unevenness
c) Leveling of Production
d) Continuous Improvement

Q.60 The Japanese term “Hiejunka” means ____________?

a) The Overburden
b) The Unevenness
c) Leveling of Production
d) Continuous Improvement

Q.61 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.62 In Visual Management, the Green Colour marking on the floor indicates…
a) Materials for Inspection
b) Materials as Scrap
c) WIP Materials
d) Finished Goods

Q.63 In Visual Management, the Red Colour marking on the floor indicates…
a) Materials for Inspection
b) Materials as Scrap
c) WIP Materials
d) Finished Goods

Q.64 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.65 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.66 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.67 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.68 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.69 The concept of “Interchangeable Parts” was applied by

a) Henry Ford
b) Charles Babbage
c) Eli Whitney
d) F W Taylor

Q.70 In 1776 -Specialization of labor in manufacturing was introduced by

a) Henry Ford
b) Adam Smith
c) Eli Whitney
d) F W Taylor

Q.71 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 r.

Q.72 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.73 Operation is a ________ process designed to convert input in to a valuable Product or

Service
a) Conversion
b) Transformation
c) Transition
d) Production

Q.74 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.75 In a Process Strategy, Low Variety & High Volume should focus on ____________
a) Processes
b) Product
c) Both a & b
d) None of the above

Q.76 which of the following are the Determinants of Process Characteristics

a) Volume
b) Variety
c) Flow
d) All of the above

Q.77 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.78 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.79 Production of Automobiles, Electronic Appliances, Personal Computers & Toys like
products are manufactured using __________
a)Continuous Flow
b)Line Flow
c) Job Shop Flow
d)Batch Flow

Q.80Vertical 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.81 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.82 A Layout designed to Group similar resources together is example of _______

a) Process layout
b) Product Layout
c) Fixed Product Layout
d) Hybrid Layout

Q.83 A Layout designed to produce a specific product, or a small number of products

efficiently is example of _______
a) Process layout
b) Product Layout
c) Fixed Product Layout
d) Hybrid Layout

Q.84 When Volume of Production is High (Mass Production) then ___________ is Feasible.
a) Product Layout
b) Process Layout
c) Fixed Layout
d) Flexible Layout

Q.85 When Volume of Production is _______ then Process Layout is Feasible

a) High
b) Medium
c) Low
d) Average

Q.86 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.87 Private Sector banks follow __________

a) Process layout
b) Mixed Layout
c) Product Layout
d) Customer Service Layout

Q.88 Public Sector banks follow __________

a) Process layout
b) Mixed Layout
c) Product Layout
d) Customer Service Layout

Q.89 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.90 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.91 In service blue printing, __________ is where the service providers interacts with the
service supporters
a) Line of Services
b) Line of Interaction
c) Line of Internal Interaction
d) Lobby

Q.92 Beyond this line, the customer can not see the activities of service providers
a) Line of Interaction
b) Line of Visibility
c) Line of Internal Interaction
d) Line of Usability

Q.93 In the first instance, __________ allows the customer to make a decision on quality of
services as per service blue print
a) Line of Interaction
b) Front Stage Actions
c) Line of Internal Interaction
d) Physical Evidences

Q.94 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.95 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.96 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.97 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.98 Lean production primarily delivers cost and ___________ to an operation?

a) Flexibility
b) Speed
c) Quality
d) Dependability

Q.99 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.100 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.101 In Supply Chain Management, VMI stands for _____

a) Vendor Material Inventory
b) Vendor Managed Inventory
c) Variable Material Inventory
d) Valuable Material Inventory

Q.102 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.103 Organizations generally use demand forecasting to develop

a) Financial Plans
b) Facilities Plans
c) Marketing Plans
d) All of the above

Q.104 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.105 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.106 Production Planning includes;

a) Orders booking from market
b) Planning production budget
c) Operation Layout
d) All of the Above

Q.107 The last step in production control is..

a) Tools & Techniques
b) Dispatching
c) Scheduling
d) Time Estimating

Q.108 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.109 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.110 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.111 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.112 Bills of Materials consists of
a) Part number
b) Part Specification
c) Price of the part
d) All of the above

Q.113 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.114 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.115 Gantt Chart is mainly useful for the …

a) Routing
b) Scheduling
c) Follow up
d) Inspection & Quality Control

Q.116 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.117 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.118 ___________ is the ability of the manufacturing organizations to meet the demand of
market
a) Priority
b) Capacity
c) Forecasting
d) Control

Q.119 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.120 A ________ Strategy means producing exactly what is demanded in the market by the
customers at a given time
a) Chase
b) Production Leveling
c) Sub Contracting
d) TQM

Q.121 _______ is the first step in PPC system

a) Production Planning
b) Forecasting
c) Inventory Management
d) Dispatching of the Materials

Q.122 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.123 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.124 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
b) Production leveling
c) make-to-stock
d) assemble to order

Q.125 __________ 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.126 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.127 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.128 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.129 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.130 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.131 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.132 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.133 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.134 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.135 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.136 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.137 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.138 Costs that continue even if no units are produced are called
a) Variable costs.
b) Mixed costs.
c) Marginal costs.
d) Fixed costs.

Q.139 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.140 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.141 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
d) None of the above

Q.142 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.143 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) The gross MRP doesn't take taxes into account, whereas the net MRP includes the tax
considerations.
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.144 An example of purchasing costs include

a) Incoming Freight
b) Storage Costs
c) Insurance
d) Spoilage

Q.145 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
b) 658 Packages
c) 668 Packages
d) 648 Packages

Q.146 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.147 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.148 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.149 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.150 Costs of goods are acquired from suppliers is classified as…

a) Stock-out Costs
b) Ordering Costs
c) Carrying Costs
d) Purchasing Costs

Q.151 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
a) 16
b) 12
c) 10
d) 14

Q.152 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.153 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.154 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.155 The inventory which is dependent on alternative modes of transportation is known as

a) Decoupling inventory
b) Pipeline inventory
c) Safety inventory
d) Cycle inventory

Q.156 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
b) 36.64 and 112.48
c) 33.64 and 107.48
d) 34.64 and 109.48

Q.157 Higher demand uncertainty provides higher savings by pooling which of the following
inventory?
a) Safety inventory
b) Pipeline inventory
c) Decoupling inventory
d) Cycle inventory

Q.158 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.159 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.160 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
b) $60,000 is released.
c) $100,000 is additionally invested.
d) $60,000 is additionally invested

Q.161 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
b) 25,920 units
c) 2,592 units
d) 18,720 units

Q.162 Costs of not carrying enough inventory include

a) Lost Sales
b) Customer Disappointment
c) Possible Worker Layoffs
d) All of the above

Q.163 Receiving a required inventory item at the exact time needed.

a) ABC Analysis
b) JIT
c) FOB
d) PERT

Q.164 The two basic questions in inventory management are how much to order and when to
order.
a) True
b) False

Q.165 Using the EOQ model, if an item's holding cost increases, its order quantity will
decrease
a) True
b) False

Q.166 With the A-B-C approach, items which have high unit costs are classified as A items.
a) True
b) False

Q.167 When using EOQ ordering, the order quantity must be computed in every order cycle.
a) True
b) False

Q.168 Holding and ordering costs are inversely related to each other..
a) True
b) False

Q.169 In the basic EOQ model, annual ordering cost and annual ordering cost are equal for
the optimal order quantity.
a) True
b) False

Q.170 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.171 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.172 Raw Materials & WIP can be classified as

a) Direct Materials
b) Indirect Materials
c) Finished Materials
d) Standard Materials

Q.173 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.174 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.175 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.176 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 rise.
d) If annual demand were to double, the EOQ would also double.

Q.177 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.178 Which of the following is NOT a type of inventory?

a) MRP
b) Finished goods
c) Raw material
d) Work-in-process

Q.179 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.180 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.181 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.182 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.183 Inspection, scrap, and repair are examples of

a) Internal Costs
b) External Costs
c) Costs of Dissatisfaction
d) Societal Costs
Q.184 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.185 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.186 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.187 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.188 VMI stands for

a) Vendor Material Inventory
b) Vendor Managed Inventory
c) Variable Material Inventory
d) Valuable Material Inventory

Q.189 The major decision areas in supply chain management are

a) Location, Production, Distribution, Inventory
b) Planning, Production, Distribution, Inventory
c) Location, Production, Scheduling, Inventory
d) Location, Production, Distribution, Marketing

Q.190 Distribution requirement planning is a system for

a) Inventory management
b) Distribution planning
c) Both ‘a’ and ‘b’
d) None of the above
Q.191 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.192 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.193 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.194 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.195 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.196 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.197 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.198 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.199 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.200 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.201 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.202 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.203 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. 204 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.205 The total logistics cost includes expenses associated with transportation, materials
handling and
a) Customer Complaints, Cost Of Food And Highway Usage Taxes
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.206 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.207 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.208 _____ 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.209 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.210 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.211 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.212 An 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.213 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.214 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.215 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.216 The impact of cost reduction on profits is much larger than the impact of increased
a) Innovation.
b) Production.
c) Information.
d) Sales.