Operations and Material Management

Question 1

The time between successive units coming off an assembly line is called
lead time
cycle time
replenishment time
none of these

QUESTION 2
.

The forecasting model that is based upon estimates of salesperson's

expected sales is likely to be called ________. 
.

Sales force combination

QUESTION 3
.

When developing inventory cost models, which of the following are not
included as costs to place an order?
.

Taxes  
QUESTION 4
.

The Pareto principle is best applied to which of the following inventory

systems?
ABC classification
QUESTION 5
.

Which of the following is NOT a factor impacting the supply chain?

Longer product life cycles
QUESTION 6
.

The amount of inventory kept at each stock point in a warehouse network is

usually based on:
Tradeoffs between warehousing, inventory, and transportation costs
QUESTION 7
.

Just-in-time/SCM purchasing requires the following condition:

Cooperation between purchasing and suppliers

QUESTION 8
.

Which of the following dispatching rules ordinarily gives the best results when
the criterion is lowest time for completion of the full sequence of jobs?
shortest processing time (SPT)
QUESTION 9
.
 The output of a production system is
Goods and Services
QUESTION 10
.
Which of the following statements is true of Lean-Six Sigma?
Lean principles include the 5Ss framework and practices.

QUESTION 11
.

Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?

5

QUESTION 12
.

Principles of purchasing organization involve

Control, Communication and Cordination

QUESTION 13
.

Given forecast errors of 5, 0, - 4, and 3, what is the bias?

4

QUESTION 14
.
The normal application of a p-chart is in
process control by attributes

QUESTION 15
.

X-bar R chart is for controlling

Continuous variables
QUESTION 16
.

Which of the following dispatching rules tends to minimize job flow time?
SPT: shortest processing time
QUESTION 17
.

Motivation is a result of
MBO

QUESTION 18
.

Which of the following is not a key factor of competitiveness?E. size of

organization
QUESTION 19
.

Activities of carrying inventory of goods is a part of

Maintenance function
QUESTION 20
.

Purchase involves
Identifying need of material
    Placing purchase order
     Verifying received goods

QUESTION 21
.

Which of the following is not included as an inventory holding cost?

Annualized cost of materials
QUESTION 22
.

Organizational purchase situations are known as straight rebuy, modified

rebuy, and new task.
 True

QUESTION 23
.

Which method of forecasting is most widely used? 

Weighted moving average
QUESTION 24
.

To process information, a firm must go through the same sequential stages of

exposure, attention, and interpretation as consumers.
 False

QUESTION 25
.

Wastivity is Equal to Productivity

 False

QUESTION 26
.

Climate is not a factor affecting site selection

 True

QUESTION 27
.

A characteristic that was once an order winner may become an order qualifier,
and vice versa.
 True

QUESTION 28
.

Activities of carrying inventory of goods is a part of maintenance function

False

QUESTION 29
.

Productivity is defined as ratio of input to output

 False

QUESTION 30
.
Darryl is a chemist at a pharmaceutical company, and he was asked by the decision-making unit at his company to visit and
evaluate potential vendors that will supply his company with the chemicals required to manufacture their products and to
conduct laboratory tests of a new product that can be used in the manufacture of their products. Then is Darryl is assisting
the company with informal information search.
False
 QUESTION 31
.

A record of all the components of an item, the parent component relationship

and usage quantities is called BOM
True

QUESTION 32
.

Power, prestige, security, and similar noneconomic criteria have no role in

business purchase decisions

 False
QUESTION 33
.

The culture of most organizations is influenced most heavily by founder and

top management.
True

QUESTION 34
.

Smoothing coefficient is low for new products for which demand is shifting
 False

QUESTION 35
.

Emotion plays no role in organizational buying.

False

QUESTION 36
.

Long time relation with a few suppliers is advocated by TQM

.
True

QUESTION 37
.

Forecasting at industry or economy level can be classified as micro level

forecasting
False

QUESTION 38
.

An example of an operational operations management decision is inventory

level management.
True

QUESTION 39
.

The process improvement technique that sorts the vital few from the trivial
many is Pareto analysis.
 True

QUESTION 40
.

Recycling is essentially remanufacturing.

 True
 QUESTION 41
.

A conjunctive decision rule is very common in the first stage of a two-stage

decision process with respect to evaluation and search in an organizational
buying situation.
True

QUESTION 42
.

Decision-making units are likely to vary over the product life cycle  
True

QUESTION 43
.

Improving efficiency will guarantee a similar improvement in productivity.

 False

QUESTION 44
.

Level zero in a bill of materials is accorded to finished product

.
 True

QUESTION 45
.

In order to compute seasonal relatives, the trend of past data must be

computed or known which means that for brand new products this approach
can't be used.
.
True

QUESTION 46
.

If the average number of defects is 9, the lower control limit in a c chart is 4

 False

QUESTION 47
.

A tool for verifying design against failures is called FMEA  

True
QUESTION 48
.

Correlation measures the strength and direction of a relationship between

variables.
True

1 points   
QUESTION 49
.

Competitiveness relates to the profitability of an organization in the

marketplace
False
QUESTION 50
.

Productivity is directly related to the ability of an organization to compete.

True
 QUESTION 51
.

Discrepancy report is used for shipping

False

QUESTION 52
.

The center of gravity method to determine facility location looks only distance
travelled
 False
QUESTION 53
.

The naive approach to forecasting requires a linear trend line.

False

QUESTION 54
.

Labour productivity is an example of partial measure of productivity

True

QUESTION 55
.

Environment of certainty is a condition in which certainty of outcomes of all

alternatives is known
False

QUESTION 56
.

Quality Circles members are paid according to their contribution to quality

 False
QUESTION 57
.

Make or buy decision is a part of maintenance function

False

QUESTION 58
.

For products in introduction stage of the product life cycle the engineering and
R&D likely to be key functions influencing the purchase decision.
 True

QUESTION 59
.

Forecasts based on time series (historical) data are referred to as associative

forecasts.
False

QUESTION 60
.

A good layout affects quality

True
 QUESTION 61
.

The philosophy of zero defects is consistent with the commitment to

continuous improvement.
True

QUESTION 62
.

Work centers are in sequence of operations in process layout

False

QUESTION 63
.

A proactive approach to forecasting views forecasts as probable descriptions

of future demand, and requires action to be taken to meet that demand. 
True

QUESTION 1
.

A plant has an annual fixed cost of Rs. 1, 00,000 and a variable cost of Rs.
2000. If the product can be sold for Rs 3000, the breakeven quantity is
100

QUESTION 2
.

Gilberth is known for his concept of

Motion study
QUESTION 3
.

Wastivity is
Inversely proportional to Productivity
QUESTION 4
.

EOQ was the contribution of

Taylor
    Gilberth
    Henry Gantt
    None of above

QUESTION 5
.

Productivity and efficiency are different names for the same thing.
False
QUESTION 6
.

People who work in the field of operations should have skills that include both
knowledge and people skills.
True
QUESTION 7
.
 Operations, marketing, and finance function independently of each other in
most organizations
False

QUESTION 8
.

The product of designed capacity and utilization is called effective capacity

True

QUESTION 9
.

An advantage of a weighted moving average is that recent actual results can

be given more importance than what occurred a while ago.
 True

QUESTION 10
.

The authority to workers to stop process if there is a potential problem is given

by JIT
True

QUESTION 11
.

The product of achievable capacity and efficiency is called maximum capacity

 False

QUESTION 12
.

Once accepted by managers, forecasts should be held firm regardless of new

input since many plans have been made using the original forecast
False

QUESTION 13
.

The probability of a bad lot being accepted is consumer risk

True

QUESTION 14
.

CAD uses computer graphics for product design.

True

QUESTION 15
.

Outsourcing tends to improve quality but at the cost of lowered productivity.

True

QUESTION 16
.

The purpose of safety stock is to

control the likelihood of a stockout due to the variability of demand
during lead time

QUESTION 17
.

Scrap cost is not cost ON materials

False
 QUESTION 18
.

Characteristic of a decision-making unit Small organizations do not use

formalized decision-making units.
False

QUESTION 19
.

Microsoft is a company that has derived a great deal of success from leading
change, and other computer-related companies look to Microsoft for cues as
to where technology will be heading in the future. Then Microsoft would be
classified as supportive firm user reference group.
True

QUESTION 20
.

The probability of a good lot being rejected is consumer risk

 False

QUESTION 21
.

Level zero in a bill of materials is accorded to finished product

True

QUESTION 22
.

Gourmet Pretzels bakes soft pretzels on an assembly line. It currently bakes

800 pretzels each 8-hour shift. If the production is increased to 1,200 pretzels
each shift, then productivity will have increased by:
0.5

QUESTION 23
.

Change in demand pattern over a long span of time is called seasonal

influence
False

QUESTION 24
.

Functional strategies should be designed to directly support a firm's mission.

True

QUESTION 25
.

capacity utilization is an objective of operations management

 True
QUESTION 26
.

The term robust design refers to a product that has exceptional strength.
False

QUESTION 27
.
 Moving average method considers all past demands
False

QUESTION 28
.

Purchase requisition is prepared by QC department

False

QUESTION 29
.

The Uniform Commercial Code specified that a product must be suitable for
its intended purpose.
True

QUESTION 30
.
IS mark is for system quality

False

QUESTION 31
.

The Delphi approach involves the use of a series of questionnaires to achieve

a consensus forecast.
 True

QUESTION 32
.

If value of input is more than the value of output, it is a value adding process
False

QUESTION 33
.

The College of Business at a major university is considering the purchase of

technology necessary to enable them put their curriculum online. This
decision is very important and includes a very large and evolving decision-
making unit. Then it represents the new task organizational purchase
situation.
True

QUESTION 34
.

In the maximin principle, the substitute with the best out of the worst payoffs is
selected
 True
QUESTION 35
.

For new products in a strong growth mode, a low alpha will minimize forecast
errors when using exponential smoothing techniques.
False

QUESTION 36
.

Total Quality Management emphasizes a commitment to quality that goes

beyond internal company issues to suppliers and customers.
True

QUESTION 37
.
Robustness of a product is _____________ related with the probability of failure
Inversely

QUESTION 38
.

Patrol inspection is a part of

.

Incoming inspection

QUESTION 39(DOUBT)
.

Hoist type of handling equipment can move material

Laterally or vertically in limited radius

QUESTION 40
.

Preparation of machine load refers to

Scheduling

QUESTION 41
.

The fundamental purpose for the existence of any organization is described

by its:
Mission statement

QUESTION 42
.

Purchase involves
.

Identifying need of material

    Placing purchase order
    Verifying received goods
    All above

QUESTION 43
.

In trend-adjusted exponential smoothing, the trend adjusted forecast (TAF)

consists of:
an exponentially smoothed forecast and a smoothed trend factor
 QUESTION 44
.

Orders are processed in the sequence in which they arrive if (the) ~*~ rule
sequences the jobs.
first come, first serve

QUESTION 45
.

Reduction of inventory is achieved by

JIT
QUESTION 46
.
What are the two basic types of production systems?
Intermittent and non-intermittent process

QUESTION 47
.

Which of the following files tracks work order progress?

A progress file

QUESTION 48
.

Which one of the following statements is best?

.

A P system requires more safety stock than a Q system.

QUESTION 49
.

According to the text, the most common choice for limits for control charts is
usually
±3 standard deviations

QUESTION 50
.

The ______ is the input to Materials Requirements Planning which lists the
assemblies, subassemblies, parts and raw materials needed to produce one
unit of finished product.
.

bill of materials

QUESTION 51
.
A company wants to determine its reorder point (R).  Demand is variable and they want to build a safety stock into R.  If the
average daily demand is 12, the lead time is 5 days, the desired “z” value is 1.96, and the standard deviation of usage during
lead time is 3, which of the following is the desired value of R?

66
QUESTION 52
.

Which of the following is not typically considered a cure for poor

competitiveness?
 minimize attention to the operations function

QUESTION 53
.

The latest version of ISO 9000 is

2015

QUESTION 54
.

The authority to workers to stop process if there is a potential problem is given

by

Decentralization of power

QUESTION 55
.
A manufacturer uses statistical process control to control the quality of the firm's products. Samples of 50 of Product A are
taken, and a defective/acceptable decision is made on each unit sampled. For Product B,the number of flaws per unit is
counted. What type(s) of control charts should be used?
p-chart for A, c-chart for B

QUESTION 56
.

A suitable chart for controlling defects is

.

C chart or Np chart

1. This is not one of the production management functions

-Evaluating
Production Management refers to the application of management principles to the
production function in a factory. In other words, production management involves
application of planning, organizing, directing and controlling the production process.

2. The center of gravity method to determine facility location looks

- Both distance and quantity transported
The center of gravity method is used for locating single facilities that considers
existing facilities, the distances between them, and the volumes of goods to be shipped
between them.

3. The trend in organizations is to place the SCM function:

- At the same level as the other major functions

4. Product design is a
- Strategic decision
5. A scheduling technique used to achieve optimum, one-to-one matching of tasks and
resources is
- the assignment method

6. Carrying out negotiations is a part of

- Purchase function

7. Exploding the bill of materials means

- converting the bill of materials into components and raw material requirements

8. TQM is applicable to
- All above
— TQM is considered a customer-focused process and aims for continual
improvement of business operations. It strives to ensure all associated employees
work toward the common goals of improving product or service quality, as well as
improving the procedures that are in place for production

9. The organization in India for granting ISO 9000 is

- BIS
BIS is the only organization in India which operates Management Systems Certification
Scheme under an Act of Parliament. Being member of ISO, BIS takes part in the
deliberations of the Technical Committee such as ISO/TC 176 and ISO/TC 207
responsible for formulation of ISO 9000 series of standards and 14000 series.

10. Given forecast errors of 5, 0, - 4, and 3, what is the bias?

- 4

11. Assuming no safety stock, what is the re-order point (R) given an average daily
demand of 50 units, a lead time of 10 days and 625 units on hand?  
-500

12. Using the ABC classification system for inventory, which of the following is a true
statement?  
- The "A" items are of high dollar volume

The ABC classification scheme divides inventory items into three groupings: high dollar volume
(A), moderate dollar volume (B), and low dollar volume (C).

13. A major strength of MRP is its capability

- for timely and accurate replanning

14. Which one of the following descriptions best defines the cycle-service level as a
measure of customer service?
- The desired probability of not running out of stock in any one inventory cycle

15. Reduction of inventory is achieved by

- JIT

16. A manufacturer has been receiving excessive numbers of defective standard

machine parts from a vendor on a regular basis. What is the most effective way to
design a formal inspection system for incoming parts?
-Statistical quality control

17. If a sample of items is measured and the mean of the sample is outside the control
limits the process is
- out of control and the cause can be established

18. A master production schedule specifies

-What product is to be made, and when

19. Discrepancy report is used for

- Shipping

20. The material productivity of a production system is 2.5 Kg steel per unit of product.
Total steel consumed on a particular day is 250 Kg. if the system is designed
to produce 200 units in a day, the efficiency of the system is
-0.5

21. The collective learning in the organization, especially how to coordinate diverse
production skills and integrate multiple streams of technologies, is called 
- core competency. 

22. Completion of any operations depends upon the slowest process in the assembly
line. What operations managers need to do in order to be successful? 
- Target and eliminate bottlenecks
23. Which of the following shows the quality and timing of specific end items for a
scheduled horizon?
- Master Planning

24. Realistic commitment is an objective of MRP

- True

25. Special-purpose technology is a common way of offering increased customization in

manufacturing or services without taking on additional labor costs.
- False

26. According to the Pareto principle, a relatively few factors are very important in
achieving an objective or solving a problem.
 - True

27. Motivation is a result of MBO

- False

28 . X-bar R chart is for controlling attribute

- False
What control chart is used for attribute measurement?
A c chart, or Count chart, is an attribute control chart that displays
how the number of defects, or nonconformities, for a process or system
is changing over time

29 An acceptance sampling plan is to be designed to meet the organization's targets for

product quality and risk levels. Then the following sentence is true or false? AQL,
LTPD, α and β collectively determine n and c
- True

30. The mission of a firm should be designed to support the firm's overall strategy.
-False

31. The use of models will guarantee the best possible decisions
- False
Models are useful, but their use does not guarantee the best decision

32. Bob is an engineer. So for introduction stage of the product life cycle he is likely to be a
member of a key function influencing purchase decisions.
- False

33. Environmental scanning refers to checking environmental regulations before proceeding

with product design.
- False

34. Improving efficiency will guarantee a similar improvement in productivity.

- True
Improving efficiency will guarantee a similar improvement in productivity. Efficiency
is narrower than productivity. As long as we match a competitor on quality and price
we will gain market share. ... Traditional strategies of business organizations have tended to
emphasize cost minimization or product differentiation.

35. The purpose of safety stock is to

- control the likelihood of a stockout due to the variability of demand during lead time
36. The naive forecast can serve as a quick and easy standard of comparison against which
to judge the cost and accuracy of other techniques.
- True

37. A document describing quantity of end items to be produced within specified periods of
time is called MPS
- True

38. Unbalanced work load is a characteristic of batch production

- False

39. Global competition really only applies to multi-national organizations.

-False

40. JIT results in inventory reduction

-True

41. Based on his 14 Points, Deming is a strong proponent of looking for the cheapest
supplier.
- False
Based on his 14 Points, Deming is a strong proponent of training and knowledge

42 Bias is measured by the cumulative sum of forecast errors

-True

43. The Delphi approach involves the use of a series of questionnaires to achieve a
consensus forecast.
- True

44. Tracking productivity measures over time enables managers to judge

organizational performance and decide where improvements are needed.
- True

45. Smoothing coefficient is low for new products for which demand is shifting
- True

46. Savings on transportation cost is a feature of localized purchasing

- True
47. An example of an operational operations management decision is inventory level
management.
- True

48. Correlation measures the strength and direction of a relationship between variables
- True

49. Objectives of purchase include Right quality

- True

50. ISO 9000 is a Implementation standard

- False

51. An organization that is twice as productive as its competitor will be twice as profitable.
- False

52. A supply chain is a sequence of organizations that are involved in producing goods and/or
producing services
- True

53. The Production Order Quantity model

- relaxes the assumption of known and constant demand

54. The principal activity in all production operations is to convert inputs into outputs that
satisfy consumer wants.
- True

55.First key responsibility of purchasing function is analysis

-True

56. Gravity model of location selection considers a diagonal path of movement

-False

57. Inventory status file shows lead time

-True

58. Level zero in a bill of materials is accorded to finished product

-True
59. The word technology is used only to refer to information technology.
- False

60. In most acceptance sampling plans, when a lot is rejected, the entire lot is inspected and
all defective items are replaced. When using this technique the AOQ is not affected, but the
AQL is improved.
- False
improves (AOQ becomes a smaller fraction

61. Competitiveness doesn't include:

- Profitability

62. Power, prestige, security, and similar noneconomic criteria have no role in business
purchase decisions.
- False

63. The organization in India for granting ISO 9000 is DGET

- False
BIS

1. Which file contains important information regarding an item's flow through the
shop?
- routing file

2. Long term planning refers to

- Planning for more than 1 year

3. Which of the following is NOT an element of TQM?

- Perceived quality

4. Production volume in product layout is

- High

5. Basic research, applied research and development are all part of the product life
cycle.
- False

6. Gravity model is a location selection model based on cost of production

- False

7. Climate is a factor affecting site selection

- True
 8. Underlying assumption of TQM is Quality can be improved by investment
-False

Featured snippet from the web

Assumptions of TQM
Quality management is based on several assumptions: The involvement of
every employee in the company in improving the tiniest aspects of its
operations. This improvement is done through frequent small improvements
rather than large investments

9. Site visits to potential vendors, laboratory tests of a new product, and investigation
of possible product specifications are part of formal information search.
- True

10. An example of a tactical operations management decision is determining

employment levels.
- True
Staffing is an ongoing, tactical decision.

11. ISO 9004 is a Implementation standard

- True
ISO 9004 is a document that can accompany
the ISO 9001 standard for implementing a quality management system (see What
is ISO 9001 for more details on the ISO 9001 standard).

12. Purchase involves verifying received goods

- False

13. p chart is for controlling attributes

- True
The p, np, c and u control charts are called attribute control charts. These four control
charts are used when you have "count" data. There are two basic types of attributes data:
yes/no type data and counting data. The type of data you have determines the type of control
chart you use.

14. If the average number of defects is 9, the lower control limit in a c chart is 3
- False
Number of defects per unit c = Σc / Σn = Σc / m.
Upper control limit (UCL) = c + 3√c.
Lower control limit (LCL) = c – 3√c.

15. Maria is a pharmaceutical sales representative that calls on hospitals. She is taking
on a new territory, and she is trying to learn the internal influences on each
hospital's culture. Then she should consider lead users with respect to internal
influences.
- True
 16. Limited rebuy is the approach used in an organizational buying situation when the
purchase is moderately important to the firm or the choice is somewhat complex.
- False

17. RFQ is sent to few selected vendors

-True

18. A suitable chart for controlling fraction defective is c chart

- False

p control chart
The p control chart is used to determine if
the fraction of defective items in a group of items is consistent over
time. A product or service is defective if it fails to conform to
specifications or a standard in some respect.

19. Services are intangible in nature

-True

Services are intangible because they can often not be seen, tasted, felt, heard, or
smelled before they are purchased. ... Services are inseparable from their production
because they are typically produced and consumed simultaneously.

20. A major consideration in product design is manufacturability.

- True

21. Productivity is directly related to the ability of an organization to compete.

- True

22. Median refers to the central value

- True

23. Organizational strategy should be determined without considering the realities of

functional area strengths and weaknesses since they can be changed to meet our
strategy.
- False
Functional strengths and weaknesses serve as the building blocks
of organizational strategy.

24. The product of achievable capacity and efficiency is called maximum capacity
- False

25. SCM suppliers should be viewed as partners.

-True

26. Mass production is based on the division of labor

-True

Mass production methods are based on two general principles: (1) the division and

specialization of human labour and (2) the use of tools, machinery, and other equipment,
usually automated, in the production of standard, interchangeable parts and products.

27. Standardized parts are interchangeable parts.

- True

28. Make or buy decision is a part of maintenance function

-False

29. Environment of uncertainty is a condition in which probability of all possible

outcomes is known
- False

30. capacity utilization is an objective of operations management

-True

31. Equipment breakdowns is a frequent cause of delayed differentiation.

- False

32. In exponential smoothing, an alpha of 1.0 will generate the same forecast that a
naïve forecast would yield.
-True

33. Environment of uncertainty is a condition in which probability of all possible

outcomes is known
- False

34. Kaizen is a Japanese term meaning continuous improvement

 - True

35. The greater the degree of customer involvement, the more challenging the design
and management of operations.
- True

36. If a sample of parts is measured and the mean of the measurements is outside the
control limits the process is out of control and the process should be investigated
for assignable variation.
- False
If a sample of parts is measured and the mean of the sample measurements is
outside the control limits

Your the process is out of control and the cause can be established
Answer:

37. This is a value adding process

- Alter
38 . Layout considers the position of
- All the above

39. The output of a production system is

- Both (goods and services)

40. Which of the following statements about ABC analysis is false?

- ABC analysis is based on the presumption that all items must be tightly controlled to produce
important cost savings.

41. Petrochemical Industry is an example for ~*~ production

- Intermittent

42 Purchase involves
- Placing purchase order

43. The fundamental purpose for the existence of any organization is described by its:
*- Mission

44. Use of the sequencing rule Shortest Processing Time generally results in
- minimum average flow time
45. The mean absolute deviation (MAD) is used to:
- measure forecast accuracy

46. Which of the following dispatching rules tends to minimize job flow time?
- SPT: shortest processing time

47.
Which of the following lot-sizing-techniques results in the lowest holding costs?
- lot-for-lot

48. Moving from the aggregate plan to a master production schedule requires
 Disaggregation

49. Up to three points above or below centerline is the amount of variation that statistical
process control allows for
- natural variation

50. A persistent tendency for forecasts to be greater than or less than the actual values is
called:
- bias

51. A set of simultaneous equations that has more variables than constraints has
- an infinite number of solution

52. JIT results in

Inventory reduction

53. This function is not covered by ISO 9000

- Accounts

54. Given forecast errors of 4, 8, and - 3, what is the mean absolute deviation?
-5

55. The operating characteristic (OC) curve shows the probability of

- none of above

56. Control charts for variables are based on data that comes from
- average of small samples.