1. Examination Paper of Materials Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Materials Management
Section A: Objective Type (30 marks)
 This section consists of Multiple choice questions & Short Answer type questions.
 Answer all the questions.
 Part One questions carries 1 mark each & Part Two questions carries 5 marks each.
Part One:
Multiple Choices:
1. Season Index =
a. =Period average demand / deseasonalized demand
b. =deseasonalized demand / period average demand
c. =Period average demand / average demand for all periods
d. = average demand for all periods / period average demand
2. Poke-yoke was first introduce by
a. Edger Schein of America
b. Lawrence D. Miles of U.S.A
c. Shigeo Shingo of Japan
d. None of the above
3. Utilization is the consolidation of several units into large units, called
a. Units loads
b. Unit system
c. Unit wait
d. None of the above
4. Mean Absolute Deviation
a. = sum of forecast error / number of observations
b. = algebraic sum of forecast errors / number of observations
c. = sum of absolute deviations / number of observations
d. None of the above
5. How many variations of network used
a. One
b. Three
c. Two
d. None of the above
6. Housing starts and gasoline consumption are called
a. Economic indicators
b. Nonleading indicator
c. Leading indicator

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d. None of the above
7. The capability of manufacturing to produce goods and services is called
a. Capacity
b. Priority
c. Strategy
d. Production
8. APICS stands for
a. The American Property and Investment Control Society
b. The American Production and Inventory Control Society
c. The America Product and Inventory Control Society
d. None of the above
9. The bill provides a list of the parts needed to make or assemble a product is
a. Planning
b. Manufacturing
c. Product definition
d. None of the above
10. Which file contains a record for each part manufactured
a. The routing file
b. The product structure file
c. Item master file
d. Work center master file
Part Two:
1. Write a note on “ERP” (Enterprise Resource Planning).
2. What do you understand by ‘Operation Overloading’?
3. What is “Two –Bin System”.
4. Explain the “Just in time” philosophy.
END OF SECTION A
Section B: Analytical Problems (40 marks)
 This section consists of Analytical Problems.
 Answer all the questions.
 Each Question carries 10 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).

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1. Calculate the available to promise (ATP) using the following data. There are 100 units on hand.
Week 1 2 3 4 5 6
Customer Orders 70 70 20 40 10
MPS 100 100 100
ATP
2. Given the following data, can an order for 30 more units delivery in week 5 be accepted? If not,
what do you suggest can be done?
Week 1 2 3 4
Forecast 80 80 80 70
Customer Orders 100 90 50 40
Projected Available
Balance 140
MPS
3. Given the following parents and components, construct a product tree. Figures in parentheses
show the quantities per item. How many Gs are needed to make one A?
Parent A B C E
Component B(2) E(2) G(2) G(4)
C(4) F(1) F(3)
D(4) H(2)
4. An order for 100 of a product is processed on operations A and operations B. the setup time on A
is 50 minutes, and the run time per piece is 9 minutes. The setup time on B is 30 minutes, and the
run time is 6 minutes per piece. It takes 20 minutes to move a lot between A and B. since this is a
rush order, it is given top priority (president’s edict) and is run as soon as it arrives at either
workstation.
It is decided to overlap the two operations and to split the lot of 100 into two lots of 60 and 40.
When the first lot is finished on operation A, it is moved to operation B where it is set up and run.
Meanwhile, operation A completes the balance of the 100 units (40) and sends the units over to
operation B. These 40 units should arrive as operation B is completing the first batch of 60; thus,
operation B can continue without interruption until all 100 are completed.
a. Calculate the total manufacturing lead time for operation A and for B without overlapping.
b. Calculate the manufacturing lead time if the operations are overlapped. How much time is
saved?
END OF SECTION B
Section C: Subjective Problems (30 marks)

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IIBM Institute of Business Management
 This section consists of subjective Problems.
 Answer all the questions.
 Each question carries 7.5 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
1.Suppose a manufacturer makes wagons composed of a box body, a handle assembly, and two
wheel assemblies. Demand for the wagons is 500 a week. The wheel assembly capacity is 1200
sets a week, the handle assembly capacity is 450 a week, and final assembly can produce 550
wagons a week.
a. What is the capacity of the factory?
b.What limits the throughput of the factory?
c.How many wheel assemblies should be made each week?
d.What is the utilization of the wheel assembly operation?
e.What happens if the wheel assembly utilization is increased to 100?
2. If the annual cost of goods sold is $12 million and the average inventory is $2.5 million:
a.What is the inventory turns ratio?
b.What would be the reduction in average inventory if, through better materials management,
inventory turns were increased to 10 times per year?
c.If the cost of carrying inventory is 20% of the average inventory, what is the annual savings?
3. Suppose management stated that it could tolerate only one stock out per year for a specific item.
For this particular item, the annual demand is 52,000 units, it is ordered in quantities of 2600, and
the standard deviation of demand during the lead time is 100 units. The lead time is one week.
Calculate:
a.Number of orders per year.
b.Service level.
c.Safety stock.
d.Order point.
4. Delivery of goods from a supplier is in transit for ten days. If the annual demand is 4200 units,
what is the average annual inventory in transit?
END OF SECTION C
IIBM Institute of Business Management

5. Examination Paper of Materials Management
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IIBM Institute of Business Management
Examination Paper MM.100
Inventory Management
Section A: Objective Type (30 marks)
 This section consists of Multiple Choice questions & Short Answer type questions.
 Answer all the questions.
 Part One questions carries 1 mark each & Part Two questions carries 5 marks each.
Part One:
Multiple Choices:
1. ……………………. is IT tool used for automation data capture.
2. Stock out Level is also called the
a. Red Zone
b. Amber Zone
c. Both (a) & (b)
d. None of the above
3. When classified on the basis of time period, they are
a. Supply forecast
b. Price forecast
c. Demand forecast
d. None of the above
4. The Delphi Method was developed by the Rand Corporation in the
a. 1980
b. 1970
c. 1950
d. None of the above
5. The BOM file is also called the
a. Product Structure File
b. Product Tree
c. Both (a) & (b)
d. None of the above
6. What is the meaning of “Doller Days”.
a. Making money with in area
b. Management of the value of inventory and time with in area
c. Inventory control
d. Management of time
7. Weeks of supply = ……………………………………………..
8. Fastest and Expensive mode of Transport.

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a. Air
b. Rail
c. Water
d. Pipeline
9. ERP systems were developed in
a. 1998
b. 1990
c. 1980
d. 1987
10. The ABC analysis is also called the ………………………………
Part Two:
1. What is “Dependent Demand”?
2. Write short note on “Simulation Models”.
3. What is “Time Phasing”.
4. Write short note on “Statistical Techniques of Forecasting”.
END OF SECTION A
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
M/s Jyoti Textiles, with four spinning mills, eighteen cloth cutting centres, sixteen processing
departments and more than 200 machine centres has installed an information system.
The operations are characterised by a nationwide distribution network. The finished goods moves
through 38 branch offices and 312 authorised distributors all of whom maintain some inventory.
Authorized distributors generate 37% of the orders but account for only 24% of the sales. Most of
the business is done through the branch offices.
The product line is large; products are classified into 175 family groups, representing 12000
finished goods. Approximately 1,500 new items enter the product line annually, and a similar
number are discounted.

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IIBM Institute of Business Management
The 12,000 finished goods require 25,000 component parts of which 6,600 are carried in
inventory and 18,400 are made to order. The newly implemented information system already has
paid off substantially and refinements continue to increase benefits. In the preceding year, M/s Jyoti
Textiles achieved a 60% customer service level (i.e. 60% of the orders were delivered according to
original customer request, with no delays or adjustment of dates). Clerical expenses were 36% of the
sales.
The company felt this was not good enough and wanted to improve the customer service. The
company therefore is thinking of a highly integrated system.
1. Keeping in mind the objectives, do you think the company should go in for a highly
integrated system? Support your answer with reasons.
2. Discuss the relevant inventory management strategies for the company.
Caselet 2
Advanced Management University is a large private university teaching a slew of courses and
boasting of a distinguished faculty. The university believed in Quality Education at any cost.
Recently, Ms Julie Joy took over as Head of Purchasing and was informed that she would be
responsible for the entire procurement activity in the university, including its storing, inspection etc.
On the first day, she began a tour of the campus. She found a sweeper putting used x-rays printed
stationery, bits of metal and banana peels into a huge dustbin. She was perplexed and wanted to
find out what happens to the garbage thereafter. She was informed that such garbage bags were kept
in one place and then taken away by the municipality trucks whenever they came.
It did not take Ms Julie Joy to realize that there was no salvage program in the university. But she
also realized that being new, it would be tricky for her to introduce new practices, given that the
faculty were highly egoistic, though learned. She also had to show clear financial benefits to be
accrued from a program of garbage recycling/salvage, for approval of any new process by the
management.
1. What arguments are there in favour of a formal salvage program at Advanced Management
University?
2. What arguments would be expected against the program?
3. What organizational structure should Julie Joy install?
4. Develop a salvage program for Advanced Management University.
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Long Questions.

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IIBM Institute of Business Management
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. At Ford Motor company, every car or truck model has its own internal website to track design,
production, quality control and delivery processes. Suppliers and customers also have access
to the site, and all concerned are expected to provide full supply chain information. How do
you think this would affect the life of the middle manager?
2. Give example of some typical case where inventory management based on unscientific method
could go wrong.
END OF SECTION C
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