Operations & Supply Chain Management MCQ

Operations & Supply
Chain Management
(205)

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
print
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
time
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
as…
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
a) 16
b) 12
c) 10
d) 14

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
rise.
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
are
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
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. 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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