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3. Practice Paper
Project and Operations
Management

4. Project and Operations Management: Practice Paper
MULTIPLE CHOICE QUESTIONS
1. Project Management usually has 5 Major Phases.
a. Feasibility Study,Project Planning, Implementation, Evaluation and Closing
b. Feasibility Study,Purchase Management, Controlling, Implementation and Closing
c. Project Planning, Purchase Management, Evaluation, Implementation and Closing
d. Project Planning,PurchaseManagement,Recruiting,Evaluation andImplementation.
e. Feasibility Study,Project Planning, Controlling, Evaluation and Closing
2. Who are the intermediate customers of the project+
a. Production Department
c. Distributors andwholesalers
b. Purchase Department
d. Next Process Level Department
e. Individuals or organizations
3. The populargroupcreativity techniques usedby severalorganizations are
a. Black box, Delphi technique and Nominal Group Technique
b. Brainstorming, Delphi technique and Nominal Group Technique
c. Black box, Checklist and Attribute listing
d. Attribute listing, Checklist and Nominal Group Technique
e. Attribute listing, Black Box and Nominal Group Technique
4. A product manager increases the product range when he adopts an
a. Extension Strategy
c. Expansion Strategy
b. Retrenchment Strategy
d. Exploration Strategy
e.Replacing Strategy
5. As per the Tandon Committee, how much percentage of the Current Asset must be supported by long term
source of Finance
a. 55% b. 45%
c. 35% d. 25%
e.15%
6. The discount rate at which the present value of cash outflow and inflow is equal is known as
a. Net Present Value
c. Cost of Capital
b. Internal Rate of Return
d. Weighted Average rate
e. All of the Above

5. Multiple Choice Questions
7. Compute WACC
Source of Capital Proportion Cost %
Equity 0.35 8.40
Preference 0.05 14.00
Debt 0.60 16.00
a. 14.24% b. 12.24%
c. 11.24% d. 13.24%
e.10.24%
8. What are the cost that are associated with designing a selection model
a. Data generation cost
c. Data Storage Cost
b. Data processing cost
d. All of the Above
e. None of a , b, c
9. The project is considered “sacred” when
a. The objective of the project is spiritual
b. Everyone in the team tries to make the project success
c. Everyone in the team makes prayer
d. The people on the project are sages
e. Everyone in the team tries to make the project failure
10. If the project is profitable,then theprofitability indexwill be
a. Equal to 1
c. Greater than 1
b. Less than 1
d. Any “negative n” Number
e.None of the above
11. Which of the techniques measures the level of uncertainty related to various parameters considered by
decision maker
a. Window of Opportunity Analysis c.
Social Cost benefit Analysis
b. Scenario Analysis
d. Attribute Listing
e. Risk Assessment
12. What is the full form of PERT
a. Production Evaluation andReviewTechnique
b. Project Evaluation and Review Technique
c. Program Evaluation and Review Technique
d. Product Evaluation and Review Technique
e. Process Evaluation and Review Technique
13. Which of the below is long term source of Capital
a. Advances from Commercial Banks c.
Trade Credit
b. Deferred Credit
d. Accrual and provisions
e. AdvancesfromCustomers

6. Project and Operations Management: Practice Paper
14. Raja Industries is considering investment proposal involving an outlay of Rs 4,500,000.The risk free interest
rate is 5%. Calculate the Net Present Value of the investment
Year Expected Cash Flow Certainty Equivalent Coefficient
1 1,000,000 0.90
2 1,500,000 0.85
3 2,000,000 0.82
4 2,500,000 0.78
a. Rs 345,570 b. Rs 435,750
c. Rs 750,435 d. Rs 534,465
e.Rs 465,435
15. A Ltd. issued preference shares of Rs 100 face value carrying 15% dividend repayable at par after 12 years.
The net amount realized per share is Rs 95. Find the Cost of Preference Capital
a. 15.81% b. 15.91%
c. 15.71% d. 15.61%
e.15.41%
16. What is the name of the institute which has developed a method of measuring social cost and benefit
a. ICAI b. CIMA c. UNIDO d. ICCI
e.BCCI
17. The scope of the project is documented in
a. Work breakdown Study b. Project Overview Statement
c. Feasibility Statement d. Project Definition Statement
e.Project Progress Report
18. The Goal statement should be “ SMART”, M stands for
a. Managerial b. Monotonous
c. Measurable d. Movable
e. Make
19. Which of the following conditions shall be fulfilled to confirm that the decomposition of activity is
completely done.
a. The activity must have clear start and end events
b. It must have clear deliverable
c. The time and cost of activity must be measurable
d. The activity must be independent
e. All of the Above
20. An activity at level n is said to be completed when its decomposed activities at level _____ are completed
a. N b. N+1
c. N-1 d. 1
e. None of the above

7. Multiple Choice Questions
21. Mandatory dependencies are dependencies
a. Among the project activities that are inherent in the nature of the project.
b. Also termed as Soft Logic
c. Defined by the knowledge of best practice
d. Also termed as Preferred Logic
e. Discretionary dependencies
22. Given the following activity‟s optimistic, most likely,and pessimistic time estimates of 6, 10, 14 days,
respectively, compute the Expected time for this activity.
a. 7 b. 8
c. 9 d. 10
e. 11
23. Project Calendars are concerned with
a. When will the project end
b. When will a particular activity of the project end
c. How various resources are consumed over a period of time
d. Holiday list on a project
e. How a specific resource or specific category of resource is spent overa period of time
24. The critical path in a project network is the
a. Network path with the most merge activities b. Network path using the most resources
c. Shortest path through the network. d. Longest path through the network
e. Network path with the most difficult activities
25. Which of the following correctly calculates an activity's crash slope?
a. (crash cost-normal cost)/(normal time-crash time)
b. (crash cost-normal cost)/(crash time-normal time)
c. (normal time-crash time)/(normal cost-crash cost)
d. (normal time-crash time)/(crash cost-normal cost)
e. (normal cost-crash cost)/(normal time-crash time)
26. The project closedown review is
a. Evaluate the efficiency by comparing the delivered output with planned one.
b. Ensure all the benefits are well documented
c. Document all the lessons learned for similar future project
d. Necessary to identify poor practice in the entire project.
e. All of the Above
27. The project status meetings are usually attended by
a. Representatives of Senior Management b. Project Manager
c. Client d. Key members of the project Team
e. All of the Above

8. Project and Operations Management: Practice Paper
28. The frequency of the review meeting is determined by:
a. Time period of the project
c. Availability ofthe place of meeting
b. Budget of the project
d. Temperature of the city
e.None of the above
29. Which of the characteristics of an effective control systemis related to the estimation of time labour and cost
required to finish the project
a. Authenticity
c. Flexibility
b. Timeliness
d. Comprehensiveness
e.Communicability
30. An effective _____ systemshould be in place to provide details on the program of the project, the changes
and their impact on the original project objectives and schedules periodically.
a. Control
c. Reporting
b. Audit
d. Communication
e. Hierarchy
31. The Third order cybernetic control systemis a
a. Goal seeking device
b. Can alterthe standardsthat are set as perpre-determined rules and regulations
c. Flexible goal seeking
d. Minimize the variations from the set standards
e. All of the above
32. Cost Variance is computed as _____
a. BCWP-BCWS
c. BCWS-ACWP
b. BCWP-ACWP
d. ACWP-BCWS
e.ACWP– BCWP
33. Bureaucratic / Political interference and poor administration leads to
a. Cost Escalations
c. Fast completion ofproject
b. Time overrun
d. Both a and b
e. None of a and b
34. Cost underrun means
a. The actualcost incurredis less thanthe estimatedcost
b. The Budget is revised
c. The Budget is reduced
d. The project is sold at price less than expected
e. The project is sold at price higher than expected

9. Multiple Choice Questions
35. From the given payoff Matrix, which strategy should be chosen by the project manager underthe conditions
of risk, assuming the probabilities of a particular state of nature are 0.4, 0.2, 0.4?
Strategy State of Nature
N1 N2 N3
S1 5 1.5 2
S2 6 4 3
S3 9 7 0.5
a. S1 b. S2
c. S3 d. S1&S2
e.S2 & S3
36. The Mechanism of Insurance is applicable for
a. Pure Risk
c. Project Risk
b.
d.
Speculative Risk
Both a and b
e. None of the above
37. The data to be gathered before developing a risk response policy
a. List of identified risks
b. Probability of occurrence of each risk
c. Definition of level of „acceptable risk‟
d. List of project Stakeholders who play a role in developing properriskresponse
e. All of the above
38. ISO stands for
a. International Service Organization
c. InternationalStandardization Organization
b.
d.
Indian Service Organization
International Organization of Standardization
e.Indian Security Organization
39. _____ attemptsto ensure thatthe scope costand time of the project match the client‟s requirement.
a. Quality assurance
c. Quality audit
b. Quality policy
d. Quality control
e.Quality program
40. Which ofthe following was not given as the key feature ofTotalQuality Management
a. Teamwork, Trust and empowerment c.
Using quality tools and techniques
b. Identifying customers and their needs d.
Establishing Clear specification
e. Continuous Improvement
41. The Activities ofQuality Circle includes
a. Identifying problems related to quality c.
Recommending solution
b. Analysing data
d. Carrying out changes approved by themanagement
e. All of the Abobe

10. Project and Operations Management: Practice Paper
42. Which one of the following would not be considered a pre- requisite for successfulJust in time production?
a. Sophisticated production and materials planning computer systems
b. Preventive maintenance of equipment
c. Suppliers in multiple locations
d. The preparation of a MasterProduction Schedule
e. Low variety of product range
43. The Food home delivery person checked over the arrangement just prior to loading the container in the
delivery van. It was fortunate, because he noticed that sweets had been included in the arrangement. The
customer specifically requested "no sweets" so he was able to remove themand make the order right before it
left the office for the customer. This scenario is an example of:
a. InternalFailure Cost b. External Cost
c. Prevention cost d. Appraisal cost
e. None of the Above
44. Project Evaluation helps the organization to
a. Enhance the performance of the project
b. Appraise the quality of the project management
c. Minimise the cost of project
d. Identify problems during the early stage of the project
e. All of above
45. Which of the following is not part of total productive maintenance
a. Training workers to operate and maintain their own machines
b. designing machines that are reliable, easy to operate, and easy to maintain
c. increasing variability by rotating machine operators and maintenance schedules on a regular basis.
d. emphasizing total cost of ownership when purchasing machines
e. None of the Above
46. During which of the following phase would the question of "What are the project's ROI and/ornon-financial
benefits?" be answered?
a. Proposal b. Selection
c. Implementation d. Closure
e.Never
47. During which of the following phase would the question of "Are time, costs,and scope performances within
acceptable limits?" be answered?
a. Proposal b. Screening and selection
c. Implementation d. Progress evaluation
e. Closure

11. Multiple Choice Questions
48. A project can be considered to have failed if it
a. Does not meet the business requirements.
b. Does not meet the users' requirements.
c. Overran significantly on estimated delivery date.
d. Over ran significantly on estimated cost.
e. All of the above
49. Which of the following is not a main project Objective
a. Quality
c. Time
b. Cost
d. Hierarchy
e. All of the above
50. A Gantt Chart
a. Helps communicate important job information
b. Do not consider hurdles like production breakdown
c. Useful only when the no of work centers are limited
d. Job times are long but routings are short
e. All of the above
51. Why the payback method is often considered inferior to discounted cash flow in capital investment appraisal?
a. It is more difficult to calculate
b. It does not calculate how long it will take to recoup the money invested
c. It does not take account of the time value of money
d. It only takes into account the future income of a project
e. All of the above
52. A Ltd. is considering the purchase of an asset for Rs 120,000. Using a discount rate of 20% compute the
discounted paybackperiod of the asset generating the following cash flows:
Year Cash flow Rs
1 15,000
2 25,000
3 40,000
4 40,000
5 35,000
6 30,000
a. 3 years b. 4 years
c. 5 years d. 6 years
e. The investment does not paybacks

12. Project and Operations Management: Practice Paper
53. Scientific Management was Introduced
a. Elton Mayo
c. Frederick Taylor
b. Henry Ford
d. Peter Ferdinand Drucker
e.None of the above
54. Which ofthe following forecastingmethodis suitable forlaunching newproducts?
a. Exponential smoothing c.
Moving average methods
b. Judgmental methods
d. Causal models
e.Market research
55. Which one of the following does not fall under qualitative forecasting method
a.
c.
Delphi method
Judgmentalmethods
b. Moving average methods
d. Market research
e.Life cycle
56. The Demand for AC for the last 4 months is as fallows. June 500,July 350, August 290, September 200,
Calculate the demand for the product for October using 3 months simple average method
a. 280 b. 290
c. 330 d. 380
e. 385
57. Which of the following pairs is the solution to the LP problem:
a. (x1, x2) = (0, 7/2) b. (x1, x2) = (1, 3)
c. (x1, x2) = (2, 0) d. (x1, x2) = (2, 3)
e.(x1, x2) = (0, 0)
58. The northwest corner rule requires that we start allocating units to shipping routes in the
a. Lower right cornerof the table.
c. Highest costly cell of the table.
b. Upper right corner of the table
d. Upperleft-hand cornerofthe table
e. None of the above
59. The only restriction we place on the initial solution of a transportation problem is that:
a. We must have nonzero quantities in a majority of the boxes.
b. All constraints must be satisfied
c. Demand must be equal to supply
d. We must have a number (equal to the number of rows plus the number of columns minus one) of boxes
which contain nonzero quantities.
e. None of the above

13. Multiple Choice Questions
60. Expansion of ownership of production to the distribution chain, towards the supplier is known as
a. Backward Integration
c. Process Expansion
b. Forward Integration
d. Decentralization
e. None of the above
61. In Cellular manufacturing ,
a. The total production area is divided in cells
b. The parts spendless time in waiting before they are processed
c. The In-process inventory is reduced
d. The cost of training workers can be reduced significantly
e. All of the above
62. Organizations have to be flexible to
a. Increase or maintain their market share c.
To enter new market
b. Respond to the changing market conditions d.
To Grow in the current Market
e.All ofthe above
63. In a transportation problem, when the number of occupied routes is less than the number of rows plus the
number of columns -1, we say that the solution is:
a. Unbalanced
c. Optimal
b. Infeasible
d. Impossible
e.Degenerate
64. The lay out where the equipment,machinery,plant andpeople move as necessary is known as:
a. Cell layout
c. Fixed-position layout
b. Process layout
d. Product layout
e.None of the Above
65. A goods-producinglocationdecision would stress the importance of
a. Security
c. Utility and Labour
b. Appearance
d. Parking area
e. Lighting
66. What type of Machinery is used in process layout
a. Specific to particular production process
b. General purpose
c. Machinery thathelpsin standardized products
d. Both a and b
e. Neither of a and b

14. Project and Operations Management: Practice Paper
67. What is the full form of CRAFT
a. Computerized Relative Allocation of Facilities Techniques
b. Computerized Remote Allocation of Facilities Techniques
c. Computerized Relative Appropriation of Facilities Techniques
d. Computerized Relative Allocation of Faculty Techniques
e. None of the Above
68. Which ofthe following is not usually considered a characteristic ofa fixed position layout
a. Transforming resources are grouped in cells
b. Fixed position layouts are often used for large or delicate products or services
c. The recipient of the process or the work being undertaken remain in the same place
d. Fixed position layouts are able to offer high flexibility
e. The recipient of the process or the work being undertaken remain in the same place
69. The first steps ofcapacity planning and control do not include
a. Studying the effect of queuing theory
c. Choosing themost appropriate capacityplan
e. None of the Above
b. Identifying the alternative capacity plans
d. Measure demand and supply
70. Capacity is usually expressed in terms of
a. Potential output from an operations system b. Man-hours available without overtime
c. Masterproduction Schedule d. Production Forecast
e.The design life of the operation process
71. In an operating system, processes A / B / C have the following maximum designed capacity – A = 1600 units
/ B = 1550 units / C = 1800 units.If the actual measured output is 1400 units, what is the systemefficiency?
a. 90% b. 88%
c. 78% d. 85%
e. None of the above
72. The EOQ formula has been criticized in a number of areas. Which of the followings is not an area of
criticism.
a. The real cost of stockin operations
b. The use of the models as prescriptive devices
c. The assumptions included in the model
d. Small errors in estimating will not result in a significant deviation from the EOQ
e. None of the above
73. Order Point or reorder level inventory Control is used for
a. Capacity of Holding Inventory b. Control of independent demand inventory items
c. Production schedule d. Inventory Quality Control
e. Vendor Selection Process

15. Multiple Choice Questions
74. Purchase Indent is also known as
a. Purchase Order b. Purchase Requisition
c. Purchase Quotation d. Purchase information
e.Purchase process
75. In make or buy decision which of the following is not relevant
a. reliability of supplier b. opportunity cost of alternative activities c. fixed costs d. reliability of
bought in products
e. Variable cost
76. Which of the following statements about Just-in-Time is correct?
a. JIT pushes inventory through the operations process
b. JIT seeks to reduce inventory in an effort to reduce waste
c. JIT is essential for a company involved in project work
d. JIT is only useful in a high product variety environment
e. JIT will overcome poor component manufacture
77. In the context of Just In Time systems,which statement about „Kanbans‟ is false
a. When no output has been requested,operatives are encouraged to do physicalexercises to keep fit
b. Physical form of a kanban may be a container in which the requested parts are delivered
c. Kanban is a „pull‟ system
d. Workstations are not allowed to produce anything without a kanban
e. Kanban uses different types of cards to initiate material transactions
78. ABC Classification systemis based on _____ of material
a. Sale price b. Usage Value
c. Stock Price d. Profit
e.None of the Above
79. Which of the following is a basic objective of scheduling activities?
a. Minimize service delay b. Reduce Cost
c. Carry out production smoothly d. Meet demand on time
e.All ofthe Above
80. Operations managers use______ to develop a job sequence that minimize the
total time span required in completing the given job
a. Gantt Chart b. Workload chart
c. Johnson‟s job Sequencing rule d. Scheduling chart
e.None of the Above
81. The operation is considered to be ______ Schedule if the critical ratio is less than one
a. Ahead of b. Behind
c. As per the d. There is no significance of Critical Ratio being less
e. Critical Ratio can never be less than 1 than 1

16. Project and Operations Management: Practice Paper
82. Which of the following is not an advantage of backward scheduling
a. Tends to focus the operation on customer due dates
b. Less exposed to risk in case of schedule change by the customer
c. Flexible – the time slack in the systemallows unexpected work to be loaded
d. Lower material costs – materials are not used until they have to be, therefore delaying added value until
the last minuteThe job with lower critical ratio will be given least priority to be sequenced in next
day‟s production activity
e. All of the Above
83. The employees are given some freedom in choosing their start time but they must work eight hours a day.
This approach is known as
a. Flextime approach
c. Flexible approach
b. Flextour approach
d. Reflex Approach
e. All of the Above
84. Enterprise Resource Planning (ERP) has been criticised on a number of grounds.Which of the following is
not a common criticism of ERP
a. The effect it has on businesses is disappointing
b. It doesn‟t allow decisions and databases from all parts of the organization to be integrated
c. Implementation is expensive
d. It can have a disruptive effect on the organization‟s operation
e. It is difficult to understand
85. What must a systemdo to qualify as a true ERP solution?
a. Be flexible
c. Extend within the company
b. Be modular and closed
d. Merge with anothercompany
e.All ofthe above
86. MRP stands for
a. Manufacturing Resource Planning c.
Management Reaction Planning
b. MasterResource Planning
d. MaterialRequirement Planning
e.MaterialReallocation Planning
87. The ______ is one of the SCM enabler that refers to the feature of products , processes,systemand services
that enable their successfulfunctioning
a. Alignment
c. Measurement
b. Design
d. Involvement
e.Periodic review
88. The componentsofSupply chain management are
a. Leadership
c. Businessrelationship
b. Strategy
d. Operational Planning
e. All of the above

17. Multiple Choice Questions
89. “Problems are detected before they occur and are solved in the minimum possible time, to ensure
smooth flow of work”. This is
a. Total Quality Management
c. Enterprise ResourcesPlanning
b. Continuous Improvement
d. Assignment
e.None of the Above
90. A combined measure ofproductivity that takes account ofallfactors ofproduction is known as:
a. MultifactorProductivity
c. Total Productivity
b. All Factor Productivity
d. Output Productivity
e. None of the Above
91. The preferred method for achieving total quality in process output is
a. Build and install an error-proof process and maintain it
b. Perform inspection at the next process
c. Rely on a team of highly trained and dedicated inspectors
d. Rely on operator self-inspection and self-correction
e. None of the Above
92. Which of the following would not normally be consideredas a „costs of quality‟
a. Internalfailure cost
c. Prevention cost
b. Inspection Cost
d. Research and Development Cost
e.None of the Above
93. Control charts are used extensively to monitor quality. They can be categorized under control charts for
variables and control charts for attributes. Which of the following comes under the former
a. X chart
c. P chart
b. Y chart
d. C chart
e. All of the Above
94. The appropriate maintenance policy is developed by balancing preventive maintenance costs and breakdown
maintenance costs.The problem is that
a. full breakdown costs are seldom considered
b. breakdown maintenance must be performed regardless of cost
c. preventive maintenance costs are very difficult to identify
d. preventive maintenance should be performed regardless of cost
e. None of the Above
95. Maintenance can be improved by
a. holding a smaller inventory of replacement items thereby increasing pressure on repair skills
b. assigning fewer people to repair crews
c. increasing repair capabilities
d. Abandoning preventive maintenance in favour of a breakdown maintenance only policy.
e. Assigning more people to the repair crews

18. Project and Operations Management: Practice Paper
96. The processthatis intended to find potentialfailures and make changes orrepairs is known as
a. Troubleshooting
c. Preventive maintenance
b. Breakeven maintenance
d. Failure maintenance
e.None of the Above
97. A good maintenance facility should have all of the following EXCEPT
a. authority to do material planning
c. ability to identify the cause ofbreakdowns
b.
d.
Well-trained personnel.
ability to design ways to reduce the MTBF
e. All of the Above
98. Which of the following is NOT part of total productive maintenance
a. increasing variability by rotating machine operators and maintenance schedules on a regularbasis
b. training workers to operate and maintain their own machines
c. emphasizing total cost of ownership when purchasing machines
d. designing machines that are reliable, easy to operate, and easy to maintain
e. All of the Above
99. Poor maintenance leads to
a. Reduction in production capacity c.
Accident prone
b. Increase in productioncost
d. Production delay
e.All ofthe Above
100. ______is a set of irregular preventive maintenance activities which detects probable future problem before
they occur while the equipment is still working at a satisfactory level
a. Mechanical maintenance c.
Preventive maintenance
b. Remedial maintenance
d. Predictive maintenance
e. None ofthe Above

19. Multiple Choice – Answers and Explanations
MULTIPLE CHOICE – ANSWERS AND EXPLANATIONS
1. (a) Feasibility study, Project Planning, Implementation, Evaluation and Closing.
Project management has 5 major phases as Feasibility Study, Project Planning, Implementation,
Evaluation and Closing. Purchase management and Recruiting are otherdisciplines of business,
2. (c) Distributors and wholesalers.
Intermediate customers are usually external to the company but they are not the end users of products
3. (b) Brainstorming,Delphi technique and Nominal Group Technique. Attribute
listing,Black Box and checklist are the methods ofIndividualCreativity.
4. (c) Expansion Strategy.
Rest of the strategies are not used to increase the product range.
5. (d) 25% .
As per the method recommended by the Committee, at least 25% of the Current Asset must be
supported by the long term source of finance.
6. (b) Internal rate of Return.
It is the discount rate at which the present value of cash outflow and inflow is equal, that is it makes
the NPV of the project equal to zero.
7. (d) 13.24% .
{(0.35*8.40) + (0.05*14) + (0.60*16)}
8. (d) All of the above.
The cost associated with designing a selection model includes data generation, processing and storage
cost
9. (b) Everyone in the team tries to make the project success.
These projects do not face any resource constraints and they are persisted with, until a satisfactory
product is delivered
10. (c) Greater than 1.
PI is the NPV of all the cash flows to the initial investment outlay. If, it is equal to 1, the project is at
Break even point, if Less than 1, then its loss making
11. (e) Risk Assessment.
It aims at measuring the level of uncertainty associated with the various parameters considered by
decision makers. Decision becomes very difficult when risk is coupled with an amount of uncertainty
12. (c) Program Evaluation and Review
Technique. This is the full form of PERT
13. (b) Deferred Credit.
Fixed assets suppliers often provide credit to the companies this is known as deferred credit. Rest
of the options are short term source of Capital.

20. Project and Operations Management: Practice Paper
14. (d) Rs 534,465
Year
Expected Cash Certainty Equivalent
c = (a*b)
Discounted
NPV =c*d
Flow (a) Coefficient (b) Rate (d)
0 Initial Investment 45,00,000
1 10,00,000 0.9 9,00,000 0.9524 8,57,143
2 15,00,000 0.85 12,75,000 0.9070 11,56,425
3 20,00,000 0.82 16,40,000 0.8638 14,16,632
4 25,00,000 0.78 19,50,000 0.8227 16,04,265
Total 57,65,000 50,34,465
5,34,465
15. (a) 15.81%
(15 + (100-95)/2) / ((100+95)/2
16. (c) UNICO
United Nations Industrial Development Organisation
17. (b) Project Overview Statement.
This statement is also known as initial project definition document of understanding,project scope
statement or statement of work. It should be very specific.
18. (c) Measurable
The full form of SMART is Specific, measurable, assignable,realistic, time related
19. (e) All of the Above.
All the above mentioned conditions shall be fulfilled
20. (b) N + 1
Project goal statement is shown at the top of the WBS as a level 0 activity. This level 0 activity is
decomposed into Level1 activities. The completion of all level 1 activities means completion of Level
0 activity. Similarly as activity at level n is said to be completed when its decomposed activity at Level
n+1 are completed.
21. (a) Among the project activities that are inherent in the nature of the project.
The dependencies between the activities is certain in any project, these are inherent hence known as
mandatory dependencies
22. (d) 10
(6+ (4*10) +14) / 6
23. (c) How various resources are consumed over a period of time.
Resource calendar is concerned about how a specific resource or specific category of resource is spent
over a period of time. Both the calendars are maintained by the project manager
24. (d) Longest path through the network.
Critical activities are those activities whose total float is 0,that means any delay in these may result in
the delay of the full project.
25. (a) (crash cost-normal cost)/ (normal time-crash time).
The per unit crash cost for each activity is calculated as the formula
26. (e) All of the above.
All are the important part of closedown review
27. (e) All of the Above.
All the above mentioned parties are interested to know the status ofthe project.

21. Multiple Choice – Answers and Explanations
28. (a) Time period of the project.
More meetings will be conducted if the project is of long term.
29. (d) Comprehensiveness.
The control systemshall give a detailed overview of the work to be performed. It has to estimate the
time, labour and cost required for completion of the project.
30. (c) Reporting.
Effective reporting systemshould be in place to inform, any deviation for the plan.
31. (c) Flexible Goal Seeking.
These systems are flexible enough to alter their standards from time to time based on the evaluation of
the past performance.
32. (b) BCWP-ACWP.
`Cost Variance is the difference between Budgeted cost of work performed and Actual cost of work
performed
33. (d) Both a and b.
Bureaucratic / Political interference and poor administration is one of the reason for cost escalation and
time over run
34. (a) the actual cost incurred is less than the estimated
cost. This is favourable for the project
35. ( c) S3
The expected value of S1 = (5*0.4) + (1.5*0.2) + (2*0.4) =
3.1. The expected value of S2 = (6*0.4) + (4*0.2) + (3*0.4) =
4.4. The expected value of S3 = (9*0.4) + (7*0.2) + (0.5*0.4)
= 5.2. The max pay off is of S3 hence selected
36. (a) Pure risk.
It refers to those situations that involve the likelihood of incurring losses.Speculative risk describes a
situation where there is possibility of making profit.
37. (d) All of the above.
All the above mentioned details shall be gathered before developing a risk response policy
38. (d) International Organization of Standardization
39. (d) Quality assurance.
It evaluates performance of the project periodically to confirm that the project meets the relevant
quality standards.
40. (d) Establishing Clear specification.
While this would be part of a TQM system, where necessary,it would not be a starting point.
41. (e) All of Above.
All are the activities of Quality Circles
42. (a) sophisticatedproduction and materials planning computer systems.
Production andmaterialplanning withoutcomputersystemwill also help in JIT
43. (a) Internal Failure cost.
These results from the defects that are discovered during the production and when the product is under
the control of the firm
44. (d) All of above.
The evaluation of the project helps the organization in all the above mentioned ways

22. Project and Operations Management: Practice Paper
45. (c) increasing variability by rotating machine operators and maintenance schedules on a regular
basis
Total productive maintenance combines total quality management with a strategic view of maintenance
from process equipment design to preventive maintenance.
46. (b) Selection
At this stage the above question shall be answered
47. (d) Progress evaluation.
At this stage the above question shall be answered
48. (d) All of the Above.
All the points are major deviations from the objective of the project hence fail
49. (d) Hierarchy.
It varies as per the management requirement and decision from time to time
50. (d) All of the Above.
All are the features of Gantt Chart
51. (c) It does not take account of the time value of money.
The discounted cash flow considers time value of money, which is an important factor to decide on
investment plan
52. (d) The investment does not paybacks
Year Cash Flow Discounted at 20% Discounted Cash flow
0 (1,20,000.00) 1 (1,20,000.00)
1 15,000.00 0.83 12,500.00
2 25,000.00 0.69 17,350.00
3 40,000.00 0.58 23,120.00
4 40,000.00 0.48 19,280.00
5 35,000.00 0.40 14,063.00
6 30,000.00 0.00 117.00
(33,570.00)
53. (c) Frederick Taylor.
He is the father of Scientific Management
54. (b) Judgement methods.
Rest of the methods are time series methods which needs the historic data which is not available for
the new products
55. (b) Moving Average
Method Rest of the methods are qualitative forecasting method
56. (a) 280
((350 + 290 + 200) /3)
57. (b) (x1, x2) = (1, 3)
When (x1, x2) = (1, 3) then the equation is max that is 1 +3 = 4, subject to the given conditions (1 +
2*3) =7, (3*1 + 3) = 6 and both are greater than 0. Option a, c and e are not applicable as either of xis
0 hence not satisfying the third criterion With option d, even though the equation is 2+3 = 5 , bu t it
does not fulfil the first criterion 2+(2*3) =8, hence rejected
58. (d) Upper left-hand corner of the table.
This is the procedure of the calculations

23. Multiple Choice – Answers and Explanations
59. (b) All constraints mustbe satisfied
This is the procedure ofthe calculations
60. (a) Backward Integration
Expansion of ownership of production to the distribution chain, towards the supplier it is known as
Backward and when towards distribution chain it is known as Forward Integration
61. (e) All of the Above
All are features of Cellular Manufacturing
62. (d) All of the above.
The organization must be flexible for all the above reasons
63. (e) Degenerate.
If the basic feasible solution to a transportation problem with M origin and n destinations has a fewer
than m+n-1, the problem is said to be Degenerate
64. (c) Fixed - position layout.
In this layout a major component of the product is fixed in a particular location and all the
requirements are brought to the location
65. (c) utility and labour cost.
Rest of the options can be made as per the requirements. But utility and labour are of prime importance
66. (b) General purpose,
This can be changed rapidly to new operations for different product designs
67. (a) Computerized Relative Allocation of Facilities Techniques
68. (a) Transforming resources are grouped in cells.
Rest of them are considered a character of fixed position layout
69. (a) Studying the effect of queuing theory.
Rest of the points are primary step in capacity planning and control
70. (a) Potential output from an operation system.
This is the prime importance to measure capacity, rest are the factors
71. (a) 90%
= (1400 / 1550)*100%, (process B shall be executed since it gives the max systemefficiency)
72. (d) Small errors in estimating will not result in a significant deviation from the
EOQ, Rest are the points of criticism
73. (b) Control of independent demand inventory items.
Reorder level is used to determining the point of ordering the inventory and is totally based on the
demand of the product.
74. (a) Purchase Order
b, c and d are the part of purchase process
75. (c) Fixed Cost.
Rest of the options are relevant for such decision
76. (b) JIT seeks to reduce inventory in an effort to reduce
waste. This is the base behind JIT
77. (a) When no output has been requested, operatives are encouraged to do physical exercises to
keep fit.
Rest of the statements are True about Kanban.

24. Project and Operations Management: Practice Paper
78. (b) Usage Value
The stock is classified on the basis of usage value in ABC Classification system
79. (e) All of the Above
All the above are the objectives of Scheduling activities
80. (c) Johnson’s job Sequencing rule
It maximizes the operation efficiency, minimizes process time of jobs and reduces the processing cost
of the firm
81. (a) Behind.
In such cases that job shall be given priority to complete
82. (c) Flexible – the time slack in the system allows unexpected work to be
loaded. Rest are the advantages ofBackward scheduling
83. (b) Flextour approach.
Under this approach the employees are given a choice to select start time but they have to work 8
hours per day
84. (b) It doesn’t allow decisions and databases from all parts of the organization to be
integrated This is not a common criticism of ERP
85. (a) Be flexible.
A company has to be flexible to accept the changes to be made with ERP
86. (d) Material Requirement planning.
This is the full form ofMRP
87. (b) Design helps to do so
88. (d) All of the above.
All are the components of the SCM Framework
89. (b) Continuous Improvement.
This is only possible by way of Continuous Improvement
90. (c) Total Productivity.
It is the A combined measure of productivity that takes account of all factors of production
91. (a) Build and install an error-proof process and maintain
it. Rest of the options may have some quality issue
92. (d) Research and development cost,
This helps in preparing the standards ofQuality but do not form part of Cost of Quality
93. (a) X Chart This is under Control charts for variables, there is no Y chart and P and C charts
are for attributes.
94. (a) full breakdown costs are seldom considered.
Allocating more resources to preventive maintenance will reduce the number of breakdowns.
However, at come point, the decrease in breakdown costs may be less than the increase in preventive
maintenance costs.
95. (c) increasing repair capabilities
Maintenance is all activities involved in keeping a system's equipment in working order.
96. (c) preventive maintenance
Generally this involves a plan with routine inspections,servicing, and keepingfacilities in good repair.

25. Multiple Choice – Answers and Explanations
97. (d) ability to design ways to reduce the MTBF
Because reliability and preventive maintenance are seldomperfect, most firms opt for some level of
repair capability.
98. (a) increasing variability by rotating machine operators and maintenance schedules on a regular
basis
Total productive maintenance combines total quality management with a strategic view of maintenance
from process equipment design to preventive maintenance.
99. (d) All of the Above.
All are the examples of impact of poor maintenance
100. (d) Predictive maintenance.
It is the process companies follow to detect future problems

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