Chapter 1
MULTIPLE CHOICE QUESTIONS
1.
Select the best answer to the following:
a. traditionally the supply-production-distribution functions have reported to
different departments
b. the supply, production and distribution functions are part of a total system
c. materials flow into an organization, are processed in some way and distributed
to the consumer
d. all the above are correct
e. none of the above is correct
2.
Manufacturing is important to the economy because:
a. it generates wealth
b. it supports service industries
c. it adds value to products
d. all of the above
e. none of the above
3.
Which of the following is the best statement about the operating environment in which
operations management functions?
a. most organizations do not need to worry about competition
b. customers are more demanding
c. government regulation is not important for companies
d. price is more important than quality
e. none of the above is true
4.
Which of the following statements is best regarding order winners?
a. they persuade a company's customers to choose its product
b. they are the same in every market
c. they are the same as order qualifiers, only better
d. they are present in every product
e. all the above are true
5.
Which of the following strategies has the shortest delivery lead time and the least customer
input?
a. engineer-to-order
b. make-to-order
c. assemble-to-order
d. make-to-stock
3
6.
Which of the following statements is best?
a. the supply chain includes all activities and processes to provide a product or
service to a customer.
b. material in the supply chain usually flows from producer to customer.
c. the supply chain contains only one supplier.
d. all of the above are true.
e. a and b only are true.
7.
Companies A and B supply company C, which supplies customers D and E. Which of the
following statements is best?
a. the supply chain for company A includes B, C, D, and E.
b. the supply chain for company B includes A, C, D and E.
c. the supply chain for company C includes A, B, D, and E.
d. all the above are true.
8.
Which of the following statements is best?
a. the basic elements of a supply chain are supply, production, and distribution
b. the elements of a supply chain are interdependent
c. design information generally flows from customer to supplier
d. all the above are true
9.
Which of the following is the best statement about the environment in which operations
management functions?
a. most organizations do not need to worry about competition
b. world-wide competition is not significant for most companies
c. government regulation is not important for companies
d. customers are more demanding
e. none of the above is true
10. If a firm wishes to maximize profit, which of the following objectives are in conflict?
I. Maximize customer service.
II. Minimize production costs.
III. Minimize inventory costs.
IV. Minimize distribution costs.
a. all the above
b. none of the above
c. I and II only
d. I and III only
e. II and III only
4
11. Which of the following statements is best?
I. The conflict between marketing, finance and production centers on customer
service, disruption to production, and inventory levels.
II. Marketing's objectives can be met with higher inventories.
III. Finance's objectives can be met with higher inventories.
IV. Production's objectives can be met with higher inventories.
a. all of the above are true
b. I and II only are true
c. I, II and III only are true
d. I, II and IV only are true
e. II, III and IV only are true
12. Which of the following is normally a major activity of materials management?
I. Manufacturing planning and control.
II. Physical supply/distribution.
a. both I and II
b. neither I nor II
c. I only
d. II only
13. The objective of materials management is to:
I. Provide the required level of customer service.
II. Maximize the use of the firm's resources.
a. I only
b. II only
c. I and II
d. neither I nor II
14. Which of the following is/are primary activities of manufacturing planning and control?
I. Production planning.
II. Implementation and control.
III. Inventory management.
a. I and II only
b. II and III only
c. I and III only
d. all the above are primary activities
15. Which of the following is (are) input(s) to manufacturing planning and control?
a. product description
b. process description
c. available facilities
d. quantities to be produced
e. all the above are inputs
5
16. Which of the following is NOT an activity of physical supply/distribution?
a. transportation
b. factory inventory
c. warehousing
d. packaging
e. materials handling
17. Materials management can be considered a balancing act because:
I. There are trade-offs between customer service and the cost of providing the service.
II. Priority and capacity must be balanced.
a. neither I nor II
b. I only
c. II only
d. I and II
18. If the cost of manufacturing (direct labor and materials) is 50% of sales and profit is 15% of
sales, what would the profit percentage be if the direct costs of manufacturing was reduced
from 50% to 47%?
a. 3%
b. 6%
c. 12%
d. 15%
e. 18%
19. Which of the following are generally considered overall objectives of an organization?
I. Providing good customer service.
II. Maintaining low levels of inventory investment.
III. Optimizing use of resources.
IV. Providing sufficient return on investment.
a. I and II only
b. I, II and III only
c. I, III and IV only
d. all the above
6
20. The purpose of the materials management concept is:
I. To manage materials in a production operation.
II. To have purchasing support the needs of production.
III. To have production support the needs of purchasing.
a. II and III only
b. I and II only
c. I, II and III
d. I and III only
21. Making a pizza at a fast-food restaurant would be considered a form of:
a. Engineer to order
b. Assemble to order
c. Make to stock
d. Make to order
e. None of the above
22. Metrics in a supply chain are:
a. Governed by the International Metric Commission
b. Measurements of performance
c. A charge passed on to customers
d. Not used on transportation
e. Do not apply to the supply chain
23. Performance measures in a supply:
a. Should be objective
b. Are viewed mostly by finance
c. Must be measurements of one parameter only
d. Concentrate on cost only
e. Are not used once a process is automated
24. Which statement is best?
a. Performance standards are set by the supplier
b. Performance standards set the goal
c. Performance measurements show how well you did
d. Both b and c are correct
e. None of the above applies to the supply chain
25. Savings in the supply chain mostly are the result of:
a. Members in the chain sharing information
b. Being able to ship in larger quantities
c. Members having clout with suppliers
d. Sticking with local competition
e. Cutting cost after the design phase
26. Postponement is best described as:
a. Delaying payment to a supplier until the goods have been sold
7
b. Delaying the removal of inventory until the last possible moment
c. Reducing inventory from RM when the parent item is produced
d. Changing the BOM after the old components have been used up
27. Postponement is best used with items that:
a. Have a long lead time and many product configurations
b. Are standardized and have short lead times
c. Experience a yield that you won’t know until the product is complete
d. Suppliers with poor delivery performance
28. A channel master in a supply chain
a. Initiates integration of a supply chain
b. Is the final customer in a supply chain
c. Is the largest member of a supply chain
d. Controls the raw material supplies in a supply chain
29. The term that describes eliminating waste throughout a company is:
a. Kaizen
b. Lean Production
c. Theory of Constraints
d. Process Control
30. If the manufacturing lead time of an item is reduced by 50% the work in process inventory:
a. Does not change
b. Is reduced by approximately 70%
c. Is reduced by approximately 50%
d. More information is needed for this problem
Answers.
1 d
10 a
19 d
28 a
2 d
11 d
20 b
29 b
3 b
12 a
21 b
30 c
4 a
13 c
22 b
5 d
14 d
23 a
6 e
15 e
24 d
7 c
16 b
25 a
8 d
17 d
26 c
9 e
18 e
27 b
Chapter 2
MULTIPLE CHOICE QUESTIONS
1.
The ability of manufacturing to produce goods and services is called:
a. scheduling
b. production planning
c. capacity
d. routing
e. none of the above
2.
Priority in production planning relates to:
a. what should come first
b. how much of what is needed and when
c. capacity
d. an objective of the firm
e. none of the above
3.
Which of the following is an input to the production plan?
a. strategic business plan
b. financial plan
c. market plan
d. engineering plan
e. all of the above are inputs
4.
Which of the following plans has the longest planning horizon and the least level of detail?
a. strategic business plan
b. production plan
c. master production schedule
d. all of the above have the same level of detail
e. none of the above
5.
In terms of INCREASING level of detail, which is the best sequence of activities?
I. Material requirements planning.
II. Master production scheduling.
III. Production planning.
a. I, II and III
b. I, III, and II
c. II, III, and I
d. II, I, and III
e. III, II, and I
15
6.
Over the time span of the production plan, which of the following can usually be varied to
change capacity?
a. work force
b. inventories
c. plant and equipment
d. all of the above
e. a and b above
7.
Which of the following is a characteristic of a production plan?
a. time horizons are five years
b. the production plan is for individual items
c. the only objective is to have an efficient plant
d. all of the above are characteristics of a production plan
e. none of the above is characteristic of a production plan
8.
Determining the need for labor, machines, physical resources to meet the production
objectives of the firm is called:
a. production control
b. production planning
c. capacity planning
d. all of the above
e. none of the above
9.
The function of setting the limits or levels of manufacturing operations based on the market
plan and resource availability is called:
a. production planning
b. production activity level
c. capacity planning
d. all of the above
e. none of the above
10. A statement of a schedule of requirements for individual end items is called:
a. a master production schedule
b. a material requirements plan
c. a production plan
d. a capacity plan
e. none of the above
11. Which of the following statements is most appropriate regarding production planning?
a. a high level of detail is not needed
b. a translation must be made from product demand to capacity demand
c. product groups based on similarity of manufacturing process should be used in
planning
d. all of the above are true
e. none of the above is true
16
12. Which of the following statements is best about sales and operations planning?
a. it provides an means of updating the material requirements plan
b. it includes only the marketing and production plans
c. it is usually updated on a monthly basis
d. it has no effect on inventory levels
13. Which of the following are characteristics of an MRPII system?
I. It incorporates the plans of marketing, production and finance.
II. It is a fully integrated planning and control system.
III. It has feedback from the bottom up.
a. I only
b. II only
c. III only
d. I, II and III
14. For the purposes of production planning, product groups should be established on the basis
of:
a. market segments
b. similarity of manufacturing process
c. the availability of materials
d. the availability of machinery
e. all of the above
15. Which of the following is a basic strategy in developing a production plan?
a. hybrid strategy
b. production leveling
c. chase strategy
d. a and b above
e. b and c above
16. A production planning strategy which turns away extra demand is called:
a. production leveling
b. demand matching
c. hybrid strategy
d. all of the above
e. none of the above
17. Which basic production planning strategy will build inventory and avoid the costs of excess
capacity?
a. demand matching (chase)
b. production leveling
c. subcontracting
d. all the above
e. none of the above
17
18. Which basic production planning strategy avoids hiring and layoff costs and the costs of
excess capacity?
a. demand matching
b. operation smoothing
c. subcontracting
d. all the above
e. none of the above
19. If the opening inventory is 100 units, the sales are 500 units and the ending inventory is 200
units, then manufacturing must produce:
a. 300 units
b. 400 units
c. 500 units
d. 600 units
e. none of the above
20. Over a 10-week period the cumulative sales are forecast at 10,000 units, the opening
inventory is 200 units and the closing inventory is to be 100 units. What should be the
weekly planned production for level production?
a. 990
b. 1000
c. 1010
d. 1030
e. none of the above
21. Firms will generally make-to-stock when:
a. demand is unpredictable
b. there are many product options
c. delivery lead times are long
d. all of the above
e. none of the above
22. Firms will generally make-to-order when:
a. products are produced to customer specifications
b. there are many product options
c. product is expensive to make and store
d. all of the above
e. none of the above
18
23. Which of the following information is needed to develop a make-to-stock production plan?
I. Forecast by time period for the production plan.
II. Opening inventory.
III. Opening backlog of customer orders.
IV. Desired ending inventory.
a. I, II and III
b. I, II and IV
c. 1, III and IV
d. II, III and IV
e. none of the above
24. If the old backlog was 200 units, the forecast for the next period is 500 units, and
production for the next period is 600 units, what will be the backlog at the end of the next
period?
a. 100 units
b. 200 units
c. 300 units
d. 700 units
e. 800 units
25. ____________ is concerned with long-term planning of manufacturing activity:
a. Sales and operations planning
b. Master production scheduling
c. MRP
d. Production activity control
e. Master planning
26. Which of the following is NOT a rule of Sales and Operations Planning?
a. Product Groups need not be decided
b. Planning units of measure need to be decided
c. A planning horizon must include new product development time
d. Performance review periods to be compared should be decided
27. Which of the following is a complete closed loop planning system that develops plans for
all materials and operations?
a. Capacity requirements planning
b. Enterprise resource planning
c. Supply chain management
d. Material requirements planning
19
Answers.
1 c
2 b
10 a
11 d
19 d
20 a
3 e
12 c
21 e
4 a
13 d
22 d
5 e
14 b
23 b
6 e
15 e
24 a
7 e
16 e
25 a
8 c
17 b
26 a
9 a
18 c
27 b
Chapter 3
MULTIPLE CHOICE QUESTIONS
1.
The information needed to develop a master production schedule will be got from:
a. the production plan
b. the forecast of individual end items
c. inventory levels for individual end items
d. all of the above
e. none of the above
2.
The MPS is a vital link the production planning system because it:
I. Keeps priorities valid.
II. Forms the basis for determining the capacity needed.
III. Is input to the material requirements plan.
IV. Is input to the production plan.
a. I, II, III and IV
b. I, II and III
c. I, II and IV
d. II, IIII and IV
e. 1, 3 and 4
3.
The MPS:
a. facilitates order promising
b. works with individual end products
c. is an agreed-upon plan between production and marketing
d. all of the above
e. none of the above
4.
The functions of a master production schedule are to:
I. Plan material components
II. Plan capacity requirements
III. Keep priorities valid
a. I, II and III
b. I, II and not III
c. I, III and not II
d. II, III and not I
e. none of the above is a function of the MPS
5.
Which of the following are objectives of an MPS?
I. Maintain the desired level of customer service.
II. Keep the sales department happy.
III. Make the best use of material, labor and equipment.
IV. Maintain inventory investment as required.
a. only I is an objective
b. only I and II are objectives
c. only I, II and III are objectives
d. only I, III and IV are objectives
e. only II, III and IV are objectives
6.
The process of checking the MPS against available capacity is called:
a. capacity planning
b. shop-floor control
c. rough-cut capacity planning
d. capacity control
e. process checking
7.
In an assemble-to-order company, at which level should master scheduling take place?
a. the component/subassembly level
b. the end item level
c. the raw material/component level
d. it does not matter, any level will do
e. none of the above levels
8.
The final assembly schedule (FAS):
a. schedules customer orders as they are received based on components planned in
the MPS
b. is used with make-to-order products
c. is used with make-to-stock products
d. a and b above
e. none of the above
9.
Which of the following statements is best regarding the master production schedule?
a. it is an agreed-upon plan between marketing and manufacturing
b. if it is poorly done we can expect past-due schedules and unreliable delivery
promises
c. it is a plan for specific end items that manufacturing expects to make over some
period in the future
d. all of the above are true
e. none of the above is true
27
10. The portion of inventory or production not committed to customer orders is called:
a. free stock
b. available to promise
c. excess production
d. waste
e. excess capacity
11. If there are customer orders the projected available is based on:
a. forecast demand
b. customer orders
c. the greater of forecast demand and customer orders
d. the opinion of the planner
12. Which of the following is (are) true about time fences in a master production schedule
system?
I. Changes far out in the planning horizon can be made with little or no cost to
manufacturing.
II. In the "frozen zone," capacity and materials are committed to specific orders.
III. Changes in the near future on the planning horizon are less costly to make than
changes far out.
a. I, II and not III
b. II, III and not I
c. I, III and not II
d. I, II, and III
e. none of the above
13. Which of the following is NOT an input to the master production schedule?
a. sales forecast for items
b. current inventory status
c. final assembly schedule
d. customer orders
e. production plan
14. The MPS is constrained by:
I. The availability of material.
II. Available capacity.
III. Inventory policies.
IV. Production plan.
a. all of the above
b. I, II, III only
c. I and II only
d. II and III only
e. none of the above
28
15. Given the following data, complete the table. There are 30 on hand. Order quantity is 60
units.
Week
1
2
3
4
Forecast
20
30
50
20
Projected available
Scheduled receipts
a. the projected available in week 3 is 40
b. the projected available in week 4 is 30
c. there is a scheduled receipt in week 4
d. a and b are true
e. b and c are true
16. Given the following table, calculate the ATP. There are 50 units on hand.
Week
1
2
3
4
5
Customer orders
20
20
15
30
10
Scheduled receipts
50
ATP
a. the ATP in week one is 10
b. the ATP in week one is 30
c. the ATP in week one is 5
d. the ATP in week two is 10
e. the ATP in week three is 35
17.
The time span for which plans are made is called the:
a. time fence
b. planning horizon
c. time bucket
d. forecast period
e. none of the above
18.
The final assembly schedule is used:
a. in a make-to-stock environment
b. in a make-to-order environment
c. in a assemble-to-order environment
d. in any of the above
e. in none of the above
19. The PAB is calculated in which way for periods after the demand time fence?
a. PAB = prior period PAM or on-hand balance + MPS - customer orders
b. PAB = prior period PAB or on-hand balance + MPS + customer orders
c. PAB = prior period PAB or on-hand balance + MPS - customer orders
d. PAB = prior period PAB + MPS - greater of customer orders or forecast
e. PAB = prior period PAB + MPS + greater of customer orders or forecast
29
20. Which of the following is the term applied to a master schedule for a purchased item?
a. Supplier scheduling
b. Master scheduling
c. Material scheduling
d. Purchase order
21. Which of the following is a contract between manufacturing and marketing?
a. Production plan
b. Master schedule
c. Forecast
d. Customer order
22. Master scheduling is a balancing act between which of the following?
a. Forecasts and orders
b. Inventory and customer service
c. Supply and demand
d. Forecast and inventory
23. Which of the following modules follows the Sales and Operations Plan?
a. Business planning
b. Production planning
c. Master scheduling
d. Material requirements planning
24. Sales forecasting and resource capacity planning are two components of which of the
following?
a. Master scheduling
b. Sales and operations planning
c. Production Plan
d. Master production schedule
Answers.
1 d
2 b
10 b
11 c
19 c
20 d
3 d
12 a
21 b
4 d
13 c
22 c
5 d
14 a
23 c
6 c
15 b
24 c
7 a
16 c
8 a
17 b
9 d
18 c
Chapter 4
MULTIPLE CHOICE QUESTIONS
1.
In the diagram below the independent demand item is:
X
1
a.
b.
c.
d.
e.
2
3
4
X
1
2
3
4
2.
_______ is a set of priority planning techniques for planning component items below the
_________:
a. Material requirements planning; end item level
b. Master production scheduling; the market plan
c. Production planning; end item level
d. all of the above
e. none of the above
3.
The objectives of material requirements planning are to:
a. issue orders to purchasing and manufacturing
b. keep priorities current
c. determine requirements
d. all of the above
e. b and c above
4.
Which of the following is (are) elements in an MRP system?
a. the computer
b. bills of material
c. inventory records
d. all of the above
e. none of the above
5.
A set of priority planning techniques for planning component items below the end item
level is called:
a. master scheduling
b. material requirements planning
c. capacity planning
d. production control
e. none of the above
46
6.
A major input to an MRP system is:
a. the production plan
b. the capacity plan
c. shop-floor activity planning and control
d. the master schedule
e. none of the above
7.
The document that shows the component parts and the number of parts needed to make one
of an assembly or subassembly is called:
a. a route sheet
b. a material requirements plan
c. a bill of material
d. a material requisition
e. none of the above
8.
A product tree shows:
a. the parts that go into making a product
b. the subassemblies used in making the product
c. the sequence in which parts go together
d. all of the above
e. none of the above
9.
Which of the following statements is best?
a. a part number identifies one part only
b. a part has one and only one part number
c. the same part on different bills of material will have the same part number
d. all of the above are true
e. none of the above is true
10. Which of the following statements is best?
A
B
D
a.
b.
c.
d.
e.
C
E
item A is the parent of item B
item D is on level 3
item A is a parent of item D
all of the above are true
none of the above is true
47
11. A multi-level bill of material:
I. Reflects the way the product will be manufactured.
II. Is produced by the engineering department.
III. Is a parts list only and does not contain subassemblies.
a. only I is true
b. only II is true
c. only III is true
d. I and II are true
e. I, II and III are true
12. A bill of material whose purpose is to simplify forecasting, master production scheduling
and material requirements planning is called:
a. a summarized parts list
b. where-used bill
c. planning bill
d. structured bill
e. multi-purpose bill
13. Which of the following statements is best?
a. a where-used report is the same as a pegging report
b. a where-used report shows all the components that go into assembly
c. a pegging report shows all the parents for a component
d. a where-used report shows only those parents for which there is an existing
requirement
e. pegging reports show only the parents for which there are requirements
14. The ability to relate the demand for an item shown on an MRP record back to the particular
parent causing the demand is called:
a. where-used
b. relating
c. pegging
d. any one of the above
e. none of the above
48
15. The lead time for each item is 1 week. If an order for 50 of A is to be delivered in week 5,
in what week will there be a planned order RELEASE for item B?
A
B
D
a.
b.
c.
d.
e.
C
E
5
4
3
2
1
16. Which statement is correct?
a. planned order releases show when the order is needed
b. when an order is released, it becomes a planned order
c. scheduled receipts show when goods were put into inventory
d. all of the above are correct
e. none of the above is correct
17. Which statement is correct?
a. a product tree shows the parts that go into making a product
b. a part has one and only one part number
c. net requirements = gross requirements - on-hand inventory - scheduled receipts
d. all of the above are correct
e. none of the above is correct
18. In material requirements planning the process of placing the exploded requirements in the
proper time periods, based on the assembly lead times involved, is known as:
a. exploding
b. offsetting
c. netting
d. all of the above
e. none of the above
49
19. Which statement is best?
a. the planned order release of the parent generates the gross requirement of the
component
b. the planned order release of the parent becomes the net requirement of the
component
c. the planned order release of the component becomes the order receipt of the
parent
d. all of the above are true
e. none of the above is true
20. Which of the following statements is best about released orders?
a. a scheduled receipt is a released order
b. an open order is a released order
c. a planned order release is a not a released order
d. all of the above are true
e. none of the above are true
21. Which of the following is NOT true of an MRP record?
a. the current time is the beginning of the first period
b. the number of periods in the record is called the planning horizon
c. an item is considered to be available at the end of the time bucket in which it is
required
d. the projected on-hand balance is for the end of the period
e. the immediate or most current period is called the action bucket
22. In the following product trees the low level code of item D is:
A
F
B
C
D
a. 0
b. 1
c. 2
D
G
E
d.
e.
3
4
23. Which of the following statements is best?
a. every item has more than one low-level code
b. net requirements = gross requirements + on-hand + scheduled receipts
c. each part has at least one part number, depending on where it is used
d. all of the above are true
e. none of the above is true
50
24. Given the following product tree, the parent of B is:
A
B
D
a.
b.
c.
d.
e.
C
E
A
B
C
D
E
25. Given the following parents and components, how many Bs are required to make an X?
Quantities are shown in brackets.
Parent
X
A
Component
A(2)
B(2)
B(1)
D(1)
a.
b.
c.
d.
e.
1
2
3
4
5
26. Which of the following are controlled by the materials planner?
a. firm planned orders
b. planned orders
c. released orders
d. exception messages
e. all of the above
51
27.
A
C
B
D
E
F
C
G
The lead time for each item is 2 weeks. If an order for 100 of A is to be delivered in week 6,
in what week will there be a planned order RELEASE for item B?
a. 5
b. 4
c. 3
d. 2
e. 1
Use the following MRP record and your calculations to answer the following two questions.
The component has an order quantity of 100, a safety stock of ten, and a lead time of one
period. Complete the following MRP record.
Week
1
Gross requirements 25
Scheduled receipts
100
Projected available 30
Net requirements
Planned order receipt
Planned order release
2
80
3
20
4
80
28. Complete the above MRP record. Which of the following statements is correct?
a. a planned order for 50 should be released in period two
b. the projected available in period three is 55
c. the projected available in period three is five
d. the net requirement in period two is 20
e. the net requirement in period three is ten
29. The net requirement in period three is:
a. 0
b. 5
c. 10
d. 15
52
30. Which of the following statements is best regarding part numbering systems?
a. significant part numbering systems are difficult to maintain
b. it is easier to remember numbers than letters
c. a random number is an identifier not a descriptor
d. all of the above are true
31. Which of the following is elapsed time from recognition of a need until the time that need is
satisfied?
a. Production time
b. Lead time
c. Cycle time
d. Schedule
32. Which of the following comes directly from external customers?
a. Dependent demand
b. Independent demand
c. Bill of materials
d. Order quantity
33. Service parts experience which of the following types of demand?
a. Independent
b. Dependent
c. Independent and Dependent
d. None of the above
34. In material requirements planning, the process of placing the exploded requirements in the
proper time periods, based on the assembly lead times involved, is known as:
a. scheduling
b. offsetting
c. netting
d. all of the above
e. none of the above
35. A bill of material for an item must change:
a. when a component changes
b. when there is a change in the use of the item
c. when the item is used in another parent
d. never
e. if the item is fully interchangeable
53
36. Three inputs to the MRP process are:
a. production activity control, purchasing, and the production plan
b. inventory status, the master production schedule, and the product structure
c. the master production schedule, inventory status, and the capacity requirements
plan
d. the product structure, production activity control, and inventory status
e. the product structure, production activity control, and the master production
schedule
37. Which of the following statements is true?
I. Firm planned orders are planned orders frozen by the planner.
II. Released orders are planned orders that have been released by the computer.
III. The planner should not release an order unless satisfied the order can be carried out.
a. I and II only
b. I and III only
c. II and III only
d. I, II, and III
e. none of the statements is true
38. Given the following product tree, how many product structure relationships are there?
a. 1
b. 2
c. 3
d. 4
e. 5
39. The document that shows the component parts and the number of parts needed to make one
of an assembly or subassembly is called:
a. a route sheet
b. a material requirements plan
c. a bill of material
d. a material requisition
e. none of the above
54
40. In the product structure diagram below item X has _______________ demand and item 2
has _______________ demand.
A
B
C
D (2) D
a.
b.
c.
d.
e.
E
dependent, dependent
dependent, independent
independent, independent
independent, dependent
none of the above answers are correct
The following two questions use the information in this MRP record. The lead time is 3 weeks.
Week
1
2
Gross requirements 60 50
Scheduled receipts
100
Projected available
40
90
Net requirements
Planned order receipt
Planned order release
100
3
60
4
70
30
5
20
40
41. The projected available to be shown in week three is:
a.
b.
c.
d.
e.
0
75
125
175
none of the above
X
1
2
42. The net requirement for week four is:
a. 25
b. 50
c. 75
d. 200
e. any of the above
55
3
4
43. The beginning projected available is:
a. 10
b. 40
c. 60
d. 100
e. cannot be determined from the data
44. Which of the following statements is best?
a. the same part on different bills of material has different part numbers
b. a part number identifies one part only
c. a significant part numbering system should always be used
d. all of the above are true
e. none of the above are true
Answers.
1 a
10 a
19 a
28 b
37 b
2 a
11 a
20 d
29 d
38 e
3 d
12 c
21 c
30 d
39 c
4 d
13 e
22 c
31 b
40 d
5 b
14 c
23 e
32 b
41 a
6
15
24
33
42
d
c
a
c
c
7 c
16 e
25 e
34 b
43 e
8 d
17 d
26 a
35 a
44 b
9 d
18 b
27 a
36 e
Chapter 5
MULTIPLE CHOICE QUESTIONS
1.
__________ is responsible for determining the capacity required and with methods of
making the capacity available.
a. Production planning
b. Master production scheduling
c. Production activity control
d. Capacity planning
e. Material requirements planning
2.
__________ is responsible for capacity planning at the master production schedule level
and _____ at the material requirements planning level:
I. Resource planning.
II. Rough-cut capacity planning.
III. Capacity requirements planning.
a. I and II
b. I and III
c. II and III
d. none of the above
3.
Available capacity in production planning is:
a. the amount of inventory that can be held in a warehouse
b. the quantity of work that can be performed in a given period of time
c. a measure of the ability of a plant to consume raw materials
d. all of the above
e. none of the above
4.
________ are generated by the priority planning system and involve the translation of the
priorities, generally given in units of product or some common unit, into hours of work
required at each work center in each time period:
a. Capacity requirements
b. Capacity bills
c. Work center reports
d. all of the above
e. none of the above
5.
Rated capacity is calculated taking into account work center ________ and ________ .
I. historical data
II. utilization
III. efficiency
a. I and II
b. I and III
c. II and III
d. none of the above
60
6.
A work center consists of 2 machines working 8 hours a day and 5 days a week.
Historically, utilization has been 80% and the efficiency 90%. The effective capacity, to the
nearest hour, would be:
a. 80 hours
b. 40 hours
c. 30 hours
d. 50 hours
e. 58 hours
7.
The available capacity will be influenced by:
I. Product specification.
II. Product mix.
III. Work effort.
IV. Units of measurement
a. I, II and III only
b. I, II and IV only
c. II, III and IV only
d. III only
e. IV only
8.
The percentage of time the work center is active compared to the available time is called:
a. efficiency
b. effectiveness
c. utilization
d. Murphy's factor
e. up-time
9.
The ratio of standard hours of work produced to hours actually worked is called:
a. efficiency
b. effectiveness
c. utilization
d. Murphy's factor
e. up-time
10. (Available time)  (utilization)  (efficiency) is called:
a. effectiveness
b. useful capacity
c. demonstrated capacity
d. rated capacity
e. work time
61
11. Which of the following is NOT an input needed in capacity requirements planning?
a. open shop orders
b. planned order releases
c. routings
d. time standards
e. rough-cut capacity
12. Information on the standard times for an operation will be found in:
a. the work center file
b. the routing file
c. the master file
d. the product file
e. the production file
13. Which of the following is the best statement?
a. open shop orders appear as scheduled receipts in the MRP
b. information on queue and wait time can be obtained from the work center file
c. the Gregorian calendar is suitable for production planning
d. a and b are true
e. b and c are true
14. A ________ shows the capacity required at each work center based on planned and released
orders for each time period of the plan.
a. work center profile
b. load profile
c. scheduled order profile
d. work-to-be-done report
e. work center file
15. One hundred units of part A are to be processed on a work center. The setup time is 2 hours
and the run time per piece is 10 minutes. The total standard time will be:
a. 2 hours 10 minutes
b. 3 hours 40 minutes
c. 10 minutes
d. 1000 minutes
e. 1120 minutes
16. In the short run, capacity can be altered by any of the following EXCEPT:
a. scheduling overtime
b. selecting alternate routings
c. reallocating the work force
d. purchasing new equipment
e. subcontracting out
62
17. A report that shows the future capacity requirements based on released and planned orders
for each time period of the plan is called:
a. load report
b. capacity report
c. order report
d. dispatch list
e. none of the above
18. Over the previous three weeks a work center produced 36, 43, and 35 standard hours of
work. What is the measured capacity?
a. 114 standard hours
b. 36 standard hours
c. 38 standard hours
d. 43 standard hours
e. cannot be determined with this data
19. A work center was available for work 80 hours, produced 74 standard hours of work and
actually worked 67 hours. What is the efficiency of the work center?
a. 92.5%
b. 110.4%
c. 108.1%
d. 119.4%
20. In one week a work center produced 130 standard hours of work. The actual hours worked
was 114. The efficiency is:
a. 80.8%
b. 87.7%
c. 92.3%
d. 114.0%
21. Determining the need for labor, machines, and resources to meet the production objectives
of the firm is called:
a. production control
b. sales and operations planning
c. capacity planning
d. all of the above
22. (Available time)  (utilization)  (efficiency) is called:
a. effectiveness
b. useful capacity
c. demonstrated capacity
d. rated capacity
e. work time
63
23. In one week a work center produces 130 standard hours of work. The hours scheduled are
120, and 105 hours are actually worked. The utilization is:
a. 80.8%
b. 87.5%
c. 92.3%
d. 108.3%
e. 123.8%
Answers.
1 d
2 c
10 d
11 e
19 b
20 d
3 b
12 b
21 c
4 a
13 d
22 d
5 c
14 b
23 b
6 e
15 e
7 a
16 d
8 c
17 a
9 a
18 c
Chapter 6
MULTIPLE CHOICE QUESTIONS
1.
________ is concerned with very short-term detailed planning of the flow of orders through
manufacturing:
a. Production planning
b. Master production scheduling
c. MRP
d. Production activity control
e. Master planning
2.
Planning the flow of work requires production activity control to:
I. Be sure the material needed is available.
II. Be sure the tooling needed is available.
III. Schedule the start and stop dates at each work center.
IV. Advise the plant supervisor of future orders.
a. all of the above
b. I, II and III
c. I, II and IV
d. II, III and IV
e. I, III and IV
3.
The activities of production activity control can be classified as:
I. Planning.
II. Implementation.
III. Control.
IV. Process control.
a. I, II and III
b. I, II and IV
c. II, III and IV
d. I, III and IV
e. all of the above
4.
Work authorization can be classified under the function of:
a. planning
b. scheduling
c. implementation
d. load leveling
e. control
71
5.
Which of the following are characteristics of intermittent manufacturing?
I. Work centers are arranged according to the routing.
II. Work centers are dedicated to producing a limited range of similar products.
III. Work flow through the shop is not constant.
IV. Throughput times are generally high.
a. I and II
b. I and III
c. I and IV
d. II and III
e. III and IV
6.
Which of the following files is used by PAC for planning?
I. Shop order master file.
II. Shop order detail file.
III. Item master file.
IV. Routing file.
a. all of the above will be used for planning
b. I and II
c. I and III
d. II and III
e. III and IV
7.
Which of the following files will contain information on manufacturing lead time and
quantity on hand?
a. item master
b. bill of material
c. work center file
d. shop order detail file
e. industrial engineer's file
8.
The ____ shows the total standard time required to produce one end product in each work
centre required for its manufacture:
a. work center bill
b. routing file
c. capacity bill
d. bill of material
e. none of the above
9.
Which file contains information on the efficiency and utilization of a work center?
a. efficiency file
b. utilization file
c. routing file
d. work center file
e. either a or b
72
10. A shop order for 1000 pieces is to be processed on work station 123. The setup time is 4
hours and the run time per piece is .08 hours. What is the required capacity on this work
center in standard hours?
a. 4.08
b. 0.08
c. 80
d. 84
e. 4000
11. All of the following are elements of manufacturing lead time EXCEPT:
a. design time
b. setup time
c. run time
d. wait time
e. move time
12. Which of the following statements is best?
a. the largest element of manufacturing lead time is queue
b. the larger the load, the longer the queue
c. if queue is reduced, the lead time and work in process will be reduced
d. all of the above are true
e. none of the above is true
13. A scheduling system in which the last operation on a routing is scheduled first and for
completion on the due date is called:
a. forward scheduling
b. backward scheduling
c. infinite scheduling
d. finite scheduling
e. none of the above
14. A scheduling system that assumes the required capacity will always be available is called:
a. forward scheduling
b. backward scheduling
c. infinite scheduling
d. finite scheduling
e. none of the above
15. Which of the following statements is best?
a. implementation is achieved by issuing a shop order to manufacturing
b. engineering drawings, bills of material and routings may be included in a shop
packet
c. the dispatch list is the instrument of priority control
d. all of the above are true
e. none of the above is true
73
16. Which of the following are methods of reducing manufacturing lead time?
I. Subcontracting.
II. Forward scheduling.
III. Operation overlapping.
IV. Operation splitting.
a. all of the above
b. I and II
c. II and III
d. II and III
e. III and IV
17. Operation overlapping means:
a. the same job running on two machines at the same time
b. using alternate routings
c. moving work to the next operation as a group of pieces is completed
d. running two or more jobs at the same time
e. locating work centers close together to reduce materials handling
18. Which of the following statements is best?
a. a bottleneck (capacity constraint resource) will control the throughput of all
products
processed by it
b. a time buffer should be established before a CCR
c. work centers feeding a CCR should work at full capacity
d. a and b are true
e. b and c are true
19. Which of the following statements is true?
I. Throughput is the total volume of production passing through a facility.
II. Throughput is controlled by the total capacity of a system.
III. Work centers feeding bottlenecks should be 100% utilized.
a. I only is true
b. I and II only are true
c. II and III only are true
d. II only is true
e. III only is true
20. Which of the following statements is best?
a. using a non-bottleneck 100% of the time produces 100% utilization
b. time saved at a non-bottleneck saves nothing
c. the capacity of a system depends on the capacity of the bottleneck
d. a and b only are true
e. b and c only are true
74
21. Which of the following is NOT a principle of managing bottlenecks?
a. a time buffer should be established after each bottleneck
b. the rate of material fed to a bottleneck should be controlled
c. do anything to increase the capacity of a bottleneck
d. use alternate routings
e. change the schedule
22. If the previous backlog was 20 units, the planned input was 25 units and the planned output
was 30 units the planned backlog would be:
a. 5 units
b. 10 units
c. 15 units
d. 20 units
e. 25 units
23. The following information is to be used in this and the next question. For the last week a
work center had a planned input of 40 standard hours and an actual input of 36 standard
hours. The planned output was 40, the actual output 42 standard hours and the beginning
backlog was 30 hours. The cumulative input variance was:
a. 0
b. -2
c. +2
d. -4
e. +4
24. The planned backlog was:
a. 30
b. 36
c. 40
d. 42
e. 66
25. Which of the following dispatching rules ignore due dates?
a. first come, first served
b. earliest operation due date
c. shortest processing time
d. a and b above both ignore due dates
e. a and c above both ignore due dates
75
26. Given the following information, which sequence will the orders be run in?
a.
b.
c.
d.
e.
ORDER
A
B
C
ABC
BCA
ACB
CBA
BAC
CRITICAL RATIO
1.5
1.0
0.7
27. If today is manufacturing day 100 and an order has a due date of 120 and a lead time
remaining of 25 days, the critical ratio would be:
a. 0.8
b. 1.2
c. 1.25
d. 0.25
e. 0.2
28. In a drum-buffer-rope scheduling system, the "drum" represents which of the following?
a. a drum of jobs to be selected
b. the master schedule for the operation
c. a safety stock of material
d. the constraint against too much being loaded into the master schedule
29. Which of the following is concerned with very short-term detailed planning of the flow of
orders through manufacturing?
a. sales and operations planning
b. master production scheduling
c. MRP
d. production activity control
30. A scheduling system that assumes the required capacity will NOT always be available is
called:
A. forward scheduling
B. backward scheduling
C. infinite scheduling
D. finite scheduling
76
31. An order for 100 of a product is processed on work center 123. The setup time is 60
minutes and the run time is 5 minutes per piece. If the order is run on two machines in the
work center, and the setups are made simultaneously, the elapsed time will be:
a. 560 minutes
b. 500 minutes
c. 250 minutes
d. 310 minutes
32. The selection and sequencing of available jobs to be run at individual work stations and the
assignment of these jobs to workers is called:
a. dispatching
b. scheduling
c. priority management
d. production control
33. Given the following data, which job(s) will be late if the shortest process time sequencing
rule is used?
Today is day 100.
Job
Process Due
Time Date
A
4
104
B
1
106
C
5
109
a. all jobs will be on time
b. A and B will be late
c. A and C will be late
d. B and C will be late
34. Operation overlapping means:
a. the same job running on two machines at the same time
b. using alternate routings
c. moving work to the next operation as a group of pieces is completed
d. running two or more jobs at the same time on the same machine
e. locating work centers close together to reduce materials handling
35. Priority rules should be which of the following?
I. Simple to use.
II. Clear to users so they can understand them.
III. Followed without question.
IV. Consistent with the objectives of the planning system.
a. all the above
b. I, II, and III only
c. I, II, and IV only
d. II, III, and IV only
e. none of the above
77
Answers.
1 d
10 d
19 a
28 b
2 b
11 a
20 e
29 d
3 a
12 d
21 a
30 d
4 c
13 b
22 c
31 d
5 e
14 c
23 e
32 a
6
15
24
33
e
d
a
c
7 a
16 e
25 e
34 e
8 c
17 c
26 d
35 a
9 d
18 d
27 a
Chapter 7
MULTIPLE CHOICE QUESTIONS
1.
Which of the following is an objective of purchasing?
I. Obtain goods and services of the required specification and quality.
II. Obtain goods and services at the lowest cost.
III. Be sure the best possible service and delivery are provided by the supplier.
a. I only
b. II only
c. III only
d. IV only
e. all are objectives of purchasing.
2.
Which of the following is NOT a step in the purchasing cycle?
a. receipt and analysis of purchase requisition
b. selection of vendor
c. make up the specification for the product
d. issue a purchase order
e. receive and accept the goods.
3.
Purchasing departments usually have the responsibility and authority to:
a. legally commit the company to a contract
b. satisfy the needs of the user department
c. determine price and source
d. all of the above
e. none of the above.
4.
______ originates with the department or person who will be the ultimate user:
a. A purchase requisition
b. A purchase order
c. Vendor selection
d. any of the above
e. none of the above.
5.
The decision on what is the "best buy" involves consideration of:
a. functional requirements
b. price
c. quantity required
d. all of the above
e. none of the above.
6.
____________ is concerned with the end use of the item and what it is expected to do:
a. Quantity required
b. Functional specification
c. Production department
d. all of the above
e. none of the above.
80
7.
Which of the following is NOT a phase in providing user satisfaction?
I. Quality and production planning.
II. Quality and product design.
III. Quality and manufacturing.
IV. Quality and use.
a. all the above are phases in providing user satisfaction
b. I only
c. II only
d. III only
e. IV only.
8.
Functional specifications set out:
a. how the product is to work
b. the purpose for which the product is required
c. all those aspects or characteristics of a product that are determined by its final
use
d. none of the above.
9.
From the buyer's point of view the best quality is:
a. the most expensive
b. the least expensive
c. that which is best adapted to a particular use
d. that which technically does the best job
e. none of the above.
10. Which of the following statements is best in describing quality by specification?
a. standard specifications are set by government and non-government agencies
b. specifications are usually more costly to develop than using a brand
c. specifications tend to ensure more equitable competition
d. all of the above are true
e. none of the above are true.
11. Which of the following applies to standard products?
a. their prices are comparatively stable
b. they are quoted on the basis of list price less discounts
c. they are purchased ONLY after firm quotations
d. only a and b above apply
e. all of the above apply.
12. Products should be specified by brand because:
a. price levels of brand items are low
b. the number of potential suppliers is restricted
c. it is difficult to develop accurate specifications for an item
d. all of the above
e. a and b above.
81
13. In which of the following situations would a company probably specify by brand?
a. when buying small quantities
b. when the item to be bought is patented
c. when the item to be bought is made to an industry standard
d. a and b above
e. b and c above.
14. Which of the following is FALSE regarding description of a product by specification?
a. allows purchase from a number of sources
b. developing specifications is an inexpensive process
c. the minimum specifications set by the buyer are likely to become the maximum
furnished by
the supplier
d. all the above
e. b and c above.
15. Which of the following is an advantage of specifying by company-developed specification?
a. the cost of establishing specifications is low
b. it is always possible to draw up specifications for any product
c. unless a performance specification is used, the buyer takes responsibility for
performance
d. all of the above are advantages
e. none of the above is an advantage.
16. Which of the following is the most important responsibility of a purchasing officer?
a. getting the best price
b. getting the best quality
c. selecting the best source
d. ensuring goods are delivered on time
e. none of the above.
17. Which of the following is NOT a factor to consider when selecting a supplier?
a. technical ability
b. manufacturing capability
c. reliability
d. price
e. political affiliation.
18. Buyers should realize that when they make a continuing purchase they buy more than the
vendor's product. They also buy the supplier's:
a. managerial capabilities
b. procurement capabilities
c. production capabilities
d. technical capabilities
e. all the above.
82
19. Which of the following will help a purchasing officer select potential sources of supply?
a. trade journals
b. purchasing department's own records
c. advertising
d. all the above
e. none of the above.
20. Supplier goodwill is necessary because:
a. the buyer can expect price concessions
b. the buyer can expect presents from the vendor
c. the buyer and vendor depend upon each other for communication and problem
solving
d. all of the above
e. none of the above.
21. When using the "ranking method" of evaluating suppliers:
a. each supplier is ranked for overall suitability
b. important factors are selected and assigned a "weight"
c. suppliers are rated against each factor
d. weight and rating of each supplier is multiplied for each factor and the total
taken as the ranking of the supplier
e. all the above are used.
22. Which of the following is (are) a qualification(s) of a good supplier?
a. has adequate plant and facilities
b. has a sound financial position
c. has reasonable prices
d. all the above are qualifications of a good supplier
e. none of the above is a qualification of a good supplier.
23. Vendors' costs are important to a purchasing agent because:
a. they help in estimating a fair price
b. they help in negotiating a fair price
c. cost determines market price
d. a vendor is entitled to a profit just because he is in business
e. a and b above.
24. Special items will generally be purchased on the basis of a quotation. The purchasing agent
will select on the basis of:
a. the lowest price
b. the most reliable bidder
c. the preference of the department that will use the item
d. consideration of all the above
e. none of the above.
83
25. In comparing prices, which of the following factors should be considered?
a. base price
b. F.O.B. point
c. installation and tooling costs
d. all the above should be considered
e. none of the above should be considered.
26. A fair price is:
a. the lowest price
b. the lowest price that ensures a constant supply of the quality and allows the
seller to make a profit
c. a competitive price
d. all the above
e. b and c above.
27. Which of the following is a function of supplier scheduling and follow-up?
a. selecting suppliers
b. establishing specifications
c. releasing orders
d. price determination
e. negotiation.
28. Which of the following statements is true about planner/buyers?
I. Planner/buyers handle more components than planners do.
II. Planner/buyers issue material releases to suppliers.
III. Planner/buyers establish supplier delivery priorities.
IV. Planner/buyers negotiate prices with suppliers.
a. I and II are true
b. II and III are true
c. III and IV are true
d. I, II, and III are true
e. II, III, and IV are true.
29. Which of the following statements is true?
a. in contract buying, price and delivery are negotiated each time an order is
released.
b. contract buying assures suppliers they have a given amount of business and
commits them to allocating that amount of their capacity to the customer
c. contract buying is useful for short term purchases
d. EDI does not eliminate much of the paper work associated with buying
e. none of the above is true.
84
30. Intranet stands for...
a. a net that includes all who are connected to it.
b. an external net that can be used by all people
c. an internal net normally used within the boundaries of the company
d. an net shared by two or more companies
e. none of the above
31. Which of the following is not an objective of the Purchasing Department?
a. Ensuring the best possible service and prompt delivery by the supplier.
b. Developing good supplier relations.
c. Issuing a regular quantity of purchase orders.
d. Selecting products that reduce the impact on the environment.
e. Obtaing goods and services at the lowest cost.
32. If the fixed cost to produce an item is $500, labor is $2.00 per unit and materials are $2.50
per unit; then the unit cost for an order of 1,000 would be:
a. $6.50
b. $5,000
c. $5.00
d. $504.50
e. More information is needed to solve this problem.
33. A price that is competitive and allows the seller to make a profit is considered to be a price
that is:
a. Optimal.
b. Fair.
c. An incentive.
d. The final price.
e. The lowest price.
34. Which of the 3R’s has the most positive impact on the environment?
a. Reduce.
b. Reuse.
c. Recycle.
d. All of the above have equal impact.
35. Which of the following departments is most likely to be familiar with knowledge of waste
products, the legislation governing their handling and other uses in the company.
a. Purchasing.
b. Maintenance.
c. Engineering.
d. Direct Customer Sales.
e. Human Resources
36. A Purchasing Agent, wishing to dispose of waste plastic from one of their processes should
first contact:
85
a.
b.
c.
d.
e.
Plant Maintenance.
A buyer of waste materials.
Local Government regulators.
The supplier.
The customer who buys the products.
37. After the supplier’s invoice is received which document(s) are needed to approve payment?
a. The approved budget and the purchase order.
b. The purchase order and the receiving report.
c. The purchase order and the invoice.
d. The bill of lading and the receiving report.
e. Approval can be made from the purchase order.
38. Verifying shipments for quantity and having no damage is the responsibility of:
a. The quality department.
b. The purchasing department.
c. Accounts payable.
d. The receiving department.
e. The shipping department.
Answers.
1 e
9 c
17 e
25 d
33 b
2 c
10 d
18 e
26 e
34 a
3 d
11 d
19 d
27 c
35 a
4 a
12 c
20 c
28 b
36 d
5 d
13 d
21 e
29 b
37 b
6
14
22
30
38
b
b
d
c
d
7 a
15 e
23 e
31 c
8 c
16 c
24 d
32 c
Chapter 8
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is best statement about forecasting?
I. It must be done by all who wish to meet the demands of the future.
II. Companies who make to order to NOT have to forecast.
a. I and II are true
b. I only is true
c. II only is true
d. neither I nor II are true
2.
Which of the following is NOT a component of a demand pattern?
a. trend
b. standard deviation
c. seasonal variation
d. random variation
e. all of the above are components of a demand pattern
3.
Given this product tree which item(s) should be forecast?
A
B
D
a.
b.
c.
d.
a.
4.
C
E
only A
A, B and C
D and E
B, C, D, and E
all items should be forecast
Which of the following is the best statement about the general principles of forecasting?
a. forecasts are more accurate for larger groups of items
b. forecasts are more accurate for nearer periods of time
c. every forecast should include an estimate of error
d. all of the above are general principles of forecasting
e. none of the above is a general principle of forecasting
94
5.
Which of the following statements is best?
a. dependent demand items should be forecast
b. a forecast for sales next week will not be as accurate as for a year from now
c. forecasts for families of products should be built up from individual product
forecasts
d. all of the above are true
e. none of the above is true
6.
Which of the following statements is best?
a. if we wish to forecast demand, then past sales must be used for the forecast
b. forecasts made in dollars for total sales should be used for manufacturing
c. forecasts should be made for all items, models, and options manufactured
d. all of the above are true
e. none of the above is true
7.
A firm manufactures a line of vacuum cleaners composed of standard, custom and deluxe
models. All are essentially the same except for the options and add-ons. What should they
forecast?
a. the total of all models
b. each model
c. each model and add the forecasts together
d. all of the above
e. none of the above
8.
Which of the following is NOT true?
a. number of orders shipped is a good measure of demand for an item
b. circumstances relating to historical data should be recorded
c. demand for different groups should be recorded separately
d. none of the above is true
9.
Which of the following statements is best regarding forecasting techniques?
a. qualitative techniques are based on judgment
b. techniques that use external economic indicators are classified as extrinsic
c. intrinsic techniques use historical data
d. all of the above are true
e. none of the above is true
10. What important assumption is made about statistical (quantitative) forecasting methods?
a. the past is a valid indicator of the future
b. demand trend is seldom linear
c. seasonal variations are small
d. random variations are small
e. all of the above
95
11. Which of the following methods can be used to forecast the demand for a NEW product?
a. equation fitting
b. moving averages
c. qualitative techniques
d. all of the above
e. none of the above
12. A forecasting technique that takes the average demand for some past number of periods is
called:
a. trend time analysis
b. moving average
c. exponential smoothing
d. none of the above
e. all of the above
13. Demand over the past three months has been 700, 750, and 900. Using a three-month
moving average, what is the forecast for month four?
a. 700
b. 750
c. 900
d. 783
e. 822
13. The old forecast was for 200 units and last month's sales were 225 units. If  (alpha) is 0.2
what is the forecast for next month?
a. 200
b. 225
c. 212½
d. 205
e. 210
14. Select the one best answer from the following:
a. demand fluctuations that depend on the time of the year, week or day are called
seasonality
b. The seasonal index is an estimate of how much the demand during the season
will be above or below the average demand
c. seasonality ALWAYS occurs in summer, winter, spring and fall
d. a and b are true
e. b and c are true
96
15. If the average quarterly demand is 200 units and the first quarter demand is 350 units, what
is the seasonal index for the quarter?
a. .57
b. 200
c. 350
d. 1.75
e. none of the above
16. Select the one best answer from the following:
a. deseasonalized data should be used for forecasting
b. seasonalize the base forecast to predict actual demand for future periods
c. actual sales should only be compared on a month-to-month basis
d. a and b are best
e. b and c are best
17. If the February demand for a product is 5,000 units and the seasonal index for February is
0.75, what is the deseasonalized February demand?
a. 3,750
b. 6,667
c. 8,750
d. 10,000
e. 15,000
18. Forecast error will be caused by:
a. random variation from the average demand
b. errors in forecasting average demand
c. differences in lead times
d. a and b above
e. none of the above
19. Select the one best answer from the following:
a. the mean absolute deviation can be used as a measure of forecast error
b. usually forecast error is distributed normally about the average demand
c. in a normal distribution the error will be within 1 MAD of the average about
60% of the
time
d. all the above are true
e. none of the above is true
97
20. Select the one best answer from the following:
a. forecasts do not need to be tracked
b. forecast error does not need to be measured
c. when actual demand exceeds a reasonable error, it should be investigated to
discover the cause
of the error
d. all the above are true
e. none of the above is true
21. Forecasts are far more accurate for which of the following?
a. Short term
b. Individual items
c. Product families
d. End use components
22. Forecasts are far more accurate for which of the following?
a. Short term
b. Individual items
c. Product families
d. End use components
23. Which of the following is good for short-range forecasts, can detect trends, but lags the
trend?
a. Exponential smoothing
b. Stable forecasting
c. Forecast smoothing
d. Moving average
24. Which of the following is NOT a source of demand?
a. Internal customers
b. External customers
c. Stockholders
d. Spare parts
98
Answers.
1 b
2 b
10 a
11 c
19 d
20 d
3 a
12 b
21 c
4 d
13 d
22 b
5 e
14 d
23 a
6 e
15 a
24 c
7 a
16 d
8 a
17 d
9 d
18 a
Chapter 9
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is best about inventory management?
a. inventories and production can be managed separately
b. inventory is not important at the production planning level
c. inventories are usually insignificant on the balance sheet
d. all the above are true
e. none of the above is true
2.
___________ are materials that have entered the production process and ___________ are
materials that are used in the production process but do not become part of the product.
I. Raw materials
II. Work in process
III. Finished goods
IV. Maintenance, repair and operational supplies
a. I and II
b. II and III
c. III and IV
d. I and III
e. II and IV
3.
Inventories that are built up in advance of a peak selling season, a promotion program or a
plant shut-down are known as:
a. lot-size inventories
b. transportation inventories
c. safety stocks
d. anticipation inventories
e. none of the above
4.
Transportation inventories can be reduced by:
a. reducing transportation time
b. reducing order quantities
c. increasing order quantities
d. reducing the order point
e. none of the above
5.
Items that are purchased or manufactured in quantities greater than needed immediately
create ________ inventories:
a. anticipation
b. lot size
c. hedge
d. any of the above
e. none of the above
117
6.
Select the one best of the following statements:
a. inventories allow manufacturing to level out production and to satisfy peak
demand
b. inventories allow manufacturing to reduce production runs, reducing unit cost
c. inventories allow manufacturers to operate different work centers at the same
output
d. all the above are true
e. none of the above is true
7.
Which of the following company objectives are in conflict?
I. Maximize customer service.
II. Low-cost plant operation.
III. Minimum inventory investment.
a. I, II and III
b. I and II, not III
c. I and III, not II
d. II and III, not I
e. none
8.
In managing inventory, the problem is to balance the inventory investment with:
I. Customer service.
II. Costs associated with changing production levels.
III. Costs of placing orders.
IV. Transportation costs.
a. II and III only
b. III and IV
c. I, II and III only
d. II, III and IV only
e. I, II, III, and IV
9.
Which of the following costs are relevant to inventory management decisions?
a. carrying costs
b. ordering costs
c. capacity-related costs
d. all the above
e. none of the above
10. Which of the following is NOT a cost of carrying inventory?
a. capital costs
b. storage costs
c. purchase cost
d. all the above
e. none of the above
118
11. Which of the following are considered ordering costs?
I. Production control costs.
II. Lost capacity costs.
III. Risk costs.
a. I, II and III
b. I and II
c. I and III
d. II and III
e. none of the above
12. Which of the following statements is NOT true?
a. the annual cost of ordering depends on the number of orders per year
b. the annual cost of ordering can be reduced by ordering less at any one time
c. the annual cost of carrying inventory can be decreased by ordering less at one
time
d. all the above are true
e. none of the above is true
13. Which of the following costs would NOT be included in the cost of placing an order?
a. setup costs
b. costs of placing a purchase order
c. back-order costs
d. all the above
e. none of the above
14. Which of the following would NOT be included in calculating inventory carrying costs?
a. capital costs
b. ordering costs
c. obsolescence costs
d. all the above
e. none of the above
15. Which of the following equations is correct?
a. Assets
= liabilities
+ revenue
b. Profit
= revenue
+ owners equity
c. Liabilities = assets
- owners equity
d. Revenue
= accounts receivable
- liabilities
16. If the annual cost of goods sold is $10,000,000 and the average inventory is $2,000,000,
what is the turns ratio?
a. $8,000,000
b. 5
c. 0.2
d. 20%
e. cannot be calculated from the information given
119
17. If there are 20 working days in a month, the monthly usage is 660 units, and there are 100
units on hand, approximately how many days’ supply are there?
a. 3
b. 5
c. 7
d. 33
18. Which of the following statements is most accurate?
a. about 20% of the items will usually account for about 80% of the total value
b. 'A' class items should have the tightest possible control
c. the general rule using the ABC approach is to have plenty of everything in stock
d. a and b only are true
e. none of the above is true
19. Of the following statements:
I. 'A' items usually account for about 70%í80% of the total usage value.
II. About 50% of the items usually account for 50% of the value.
III. 'C' items should be given the top priority in inventory management.
a. I and II are true
b. II and III are true
c. I and III are true
d. only III is true
e. only I is true
20. Which of the following statements is best?
a. two items with the same part number but in two different inventories would be
one stock
keeping unit (SKU)
b. two white shirts of different sizes in the same inventory would be one SKU
c. two items with the same part number in the same inventory would be one SKU
d. all the above are true
e. none of the above is true
21. Delivery of goods from a supplier is in transit for 14 days. If the annual demand is 2600
units, what is the average annual inventory in transit?
a. 99.7 units
b. 100 units
c. 1.97 units
d. cannot be determined from the data given
120
22. A company carries an average annual inventory of $1,000,000. If the cost of capital is 10%,
storage costs are 8%, and risk costs are 7%, what does it cost per year to carry this
inventory?
a. $100,000
b. $80,000
c. $70,000
d. $250,000
e. cannot be determined from the data given
23. Which of the following would not be considered work-in-process inventory?
I. Finished goods in the stockroom.
II. Processed material waiting for inspection.
III. Raw materials not issued.
IV. Components in queue ahead of a milling machine.
a. I and II
b. I and III
c. I and IV
d. II and III
24. Which of the following are reasons for keeping inventory?
I. To allow for goods in transit.
II. To build up stock for seasonal demand.
III. To reduce production costs.
IV. To guard against uncertainty in supply and demand.
a. I, II and III only
b. II, III and IV only
c. II and IV only
d. all the above are valid reasons
25. Given the following information, calculate the inventory turns.
Sales
= $200,000,000
Cost of sales
= $160,000,000
Average inventory = $ 40,000,000
Carrying cost
= 12%
a. 0.20
b. 0.25
c. 4.0
d. 5.0
121
26. All of the following are reasons to keep inventory EXCEPT:
a. Allow flexibility in production scheduling
b. Couple supply with demand
c. Meet fluctuations in product demand
d. Provide a safeguard against delivery time variations
Answers.
1 e
9 d
17 a
25 c
2 e
10 c
18 d
26 b
3 d
11 b
19 e
4 a
12 b
20 c
5 b
13 c
21 a
6 a
14 b
22 d
7 a
15 c
23 b
8 e
16 b
24 d
Chapter 10
MULTIPLE CHOICE QUESTIONS
1.
Which of the following are NOT assumptions on which the economic order quantity (EOQ)
is based?
a. demand is relatively constant and known
b. the item is produced continuously
c. order preparation costs, inventory carrying costs and lead times are constant and
known
d. replacement occurs all at once
e. all of the above are true assumptions
2.
In developing the standard economic order quantity formula the following assumption(s) is
(are) made:
a. demand for the item is relatively uniform
b. replenishment is in lots or batches that arrive at once
c. lead time is constant
d. all of the above are assumed
e. none of the above is assumed
3.
In determining the economic order quantity (EOQ) the following costs are considered:
a. costs of a stockout and ordering costs
b. costs of a stockout and inventory holding costs
c. ordering costs and inventory carrying costs
d. ordering costs and costs of changing production levels
e. inventory holding costs and costs of changing production levels
4.
If the order quantity is increased the annual cost of carrying inventory will:
a. increase
b. decrease
c. remain the same
d. not be affected
e. none of the above
5.
Assuming the cost per order is constant, increasing the order quantity will cause annual
ordering costs to:
a. decrease
b. increase
c. remain the same
d. increase at a decreasing rate
e. cannot be determined
130
6.
In the simple EOQ model annual inventory carrying costs and annual ordering costs vary:
a. according to the time of year
b. with seasonally adjusted demand
c. with the order quantity
d. do not vary in any way
e. in an unknown manner
7.
While working a simple EOQ problem, you notice that, with a certain lot size, the annual
ordering cost is exactly the same value as the annual inventory carrying cost. Which of the
following is true?
a. the lot size is the economic order quantity
b. total cost is at its maximum
c. the annual carrying cost will decrease if the order quantity is increased
d. all of the above
e. none of the above; the phenomenon is merely a coincidence
8.
A firm uses $20,000 of an item per year. The carrying cost is 25%, the cost of ordering is
$10 and the order quantity is $1,000. The annual total cost of carrying plus ordering would
be:
a. $2,500
b. $5,000
c. $100
d. $325
e. none of the above
9.
For a particular item the usage is 2000 units per year, the ordering cost is $10, the inventory
carrying cost is 20% and the unit cost is $5. The economic order quantity is:
a. 20 units
b. 200 units
c. 2000 units
d. 400 units
e. 4000 units
10. If the economic order quantity is to be calculated in DOLLARS, then:
a. the annual demand must be stated in dollars
b. ordering costs MUST be stated on a per UNIT basis
c. carrying costs are stated in dollars per unit
d. all the above are true
e. none of the above is true
131
11. A supplier offers a quantity discount. Which of the following will influence the decision to
accept the discount or not?
a. purchase cost
b. cost of carrying inventory
c. cost of placing one order
d. all of the above are relevant
e. none of the above is relevant
12. If a purchase discount is taken:
1. There is a saving in purchase cost.
2. Ordering costs are reduced.
3. Carrying costs are increased.
4. There is not necessarily a net saving.
a. all the above are true
b. 2 and 3 are true
c. 3 and 4 are true
d. 2 and 4 are true
e. 3 and 4 are true
13. For a certain group of items the cost of carrying inventory and the cost of placing orders is
not exactly known but is about the same for all the items. The company has calculated K =
20 for these items. If one item has an annual demand (A) = $10,000 the NEW order
quantity should be:
a. $2,000
b. $10,000
c. $20,000
d. $50,000
e. none of the above
14. Which of the following statements is correct?
a. you must know the ordering cost to use the EOQ concept
b. quantity discounts will not change the total inventory costs of the item
c. inventory levels can be lowered by raising the order quantity
d. if stock is not received all at once into inventory then EOQ formula can be
modified and used
e. none of the above is correct
15. The EOQ for an item is 5500 units and the annual demand is 78,000 units. What is the
period order quantity?
a. 14.18
b. 0.27
c. 3.67
d. 4
e. cannot be determined from the given data
132
16. Which of the following statements is best?
I. The EOQ should be used with lumpy demand.
II. Transportation cost should be included in the cost of ordering.
III. Anticipation inventory should be built based on capacity and future demand.
a. I and II only are true
b. I and III only are true
c. II and III only are true
d. all the above are true
e. none of the above are true
17. Using the POQ method of ordering, calculate the total cost of carrying and ordering
inventory for the 6 week period shown. Use a POQ = 3 weeks for your answer.
Week
Net requirements
Planned order receipts
Ending inventory
1
60
2
40
3
10
4
50
5
20
6
30
Cost to place an order = $100.00
Cost to carry inventory = $1.00 per unit per week
Annual demand = 1,500 units
Cost per unit = $200.00
Opening inventory = 0 units
a. $140
b. $280
c. $340
d. $400
e. none of the above
18. Quantity discounts cause companies to:
a. Order sooner.
b. Order less at a time.
c. Increase their inventory.
d. Increase ordering costs.
e. Always save money
19. The period order quantity is equal to:
a. Annual demand divided by EOQ.
b. EOQ divided by average period demand.
c. The carrying cost up to but not exceeding the ordering cost.
d. The sum of the carrying costs divided by cost per unit.
e. The part period cost times average inventory.
133
20. Which of the following is NOT true regarding period order quantity method (POQ) of lot
sizing?
a. The order quantity is constant.
b. The time interval of inventory coverage is constant.
c. POQ is derived directly from the EOQ.
d. POQ is better suited to lumpy demand than EOQ.
e. POQ and EOQ will try to order the same number of times per year.
21. K the constant used for lot sizing is calculated as the:
a. Order point minus safety stock.
b. Sum of the square roots of demand divided by the number of orders per year.
c. Standard deviation of the demand divided by the square root of demand.
d. Annual demand divided by the order quantity.
e. The reciprocal of order quantity times the economic order quantity.
22. The period order quantity:
a. Can only be applied to continuous demand.
b. Orders a constant amount for a set number of periods.
c. Works like a quantity discount.
d. Is based on the same assumptions as the EOQ model.
e. Orders the same quantity each period.
23. Which of the following techniques balances the cost of ordering with the cost of carrying
inventory?
a. EOQ
b. POQ
c. The constant K
d. All of the above
24. The letter ‘K’ used in lot sizing makes the order quantities.
a. Order the big items more often and the low volume items less often.
b. Increase the average inventory.
c. Decrease the average inventory by gradually ordering more often.
d. Maintains the current inventory level while decreasing the number of orders.
e. Balances the safety stock of items with demand.
25. Quantity discounts:
a. Make buyers order more than is economical.
b. Decrease the annual carrying costs but increase the ordering cos.
c. Can be a good decision if the total annual costs are reduced.
d. Always advantage the seller at a cost to the buyer.
e. Persuade the buyer to buy more often.
134
Answers.
1 b
2 d
10 a
11 d
19 b
20 a
3 c
12 a
21 b
4 a
13 a
22 d
5 a
14 d
23 d
6 c
15 c
24 a
7 a
16 c
25 c
8 d
17 c
9 b
18 c
Chapter 11
MULTIPLE CHOICE QUESTIONS
1.
Which of the following are basic systems for determining when to order INDEPENDENT
demand items?
I. Order point system
II. Periodic review system
III. Material Requirements Planning
a. I only
b. II only
c. I and II
d. I and III
e. II and III
2.
Which of the following statements is best?
a. order point = DDLT + SS
b. average inventory = Q ÷ 2 + SS
c. safety stock is always needed
d. a and b are true
c. d and c are true
3.
When using the order point system which of the following is true?
a. order quantities are usually fixed
b. the order point depends upon the demand during the lead time plus safety stock
c. time intervals between orders are constant
d. a and b above
e. b and c above
4.
Which of the following statements is true about safety stock?
a. it must always be carried
b. it depends only on the amount of demand
c. it depends on the required service level
d. all the above are true
e. none of the above is true
5.
Select the description which most closely fits the term ORDER POINT:
a. the time it takes to replenish an item in inventory.
b. extra inventory of an item carried to protect against variations in demand during
lead time
c. a listing of components required to manufacture a product
d. the time when an order should be placed
e. none of the above
6.
Select the description which most closely fits the term SAFETY STOCK:
a. the time it takes to replenish an item in inventory.
b. extra inventory of an item carried to protect against variations in demand during
lead time
c. a listing of components required to manufacture a product
d. the time when an order should be placed
e. none of the above
7.
Select the description which most closely fits the term LEAD TIME:
a. the time it takes to replenish an item in inventory
b. extra inventory of an item carried to protect against variations in demand during
lead time
c. a listing of components required to manufacture a product
d. the time when an order should be placed
e. none of the above
8.
Among other things the amount of safety stock carried will depend upon:
a. the frequency of reorder
b. the service level desired
c. variability of demand during the lead time
d. all the above
e. a and b above
9.
Which of the following statements is best?
a. safety stock depends on the service level desired
b. safety stock depends on the length of the lead time
c. safety stock depends on the variation of demand during the lead time
d. all of the above are correct
e. none of the above is correct
10. If the standard deviation of demand is 100 units and the average demand is 1000 units, then
we can be 95% confident that actual sales will be 1000 units plus or minus about:
a. 100 units
b. 150 units
c. 200 units
d. 300 units
e. 400 units
11. Which of the following statements is best?
a. most demand patterns tend to be stable and predictable
b. the most common predictable pattern is called a normal distribution
c. the normal curve can be described by its average (mean) and the variation of
actual demand
about the average
d. all the above are true
e. only and b are true
12. If the sum of the absolute deviations of demand was 500 for 10 periods, MAD would be:
a. 5
b. 500
c. 50
d. 0.02
e. none of the above
13. Management states that they will tolerate one stockout every year for a specific item. If 10
orders are placed for the item each year the service level desired is:
a. 80%
b. 85%
c. 90%
d. 95%
e. none of the above
14. The average demand for an item is 1000 per month. The mean absolute deviation of
monthly demand is 300 units. The MAD for yearly sales will be approximately:
a. 3600 units
b. 12,000 units
c. 1040 units
d. 3464 units
e. none of the above
15. Given that the lead time is 1 week and the sigma is 100 units, if the lead time changes to 2
weeks then the sigma would change to about:
a. 200 units
b. 180 units
c. 160 units
d. 140 units
e. 120 units
16. Management is willing to tolerate one stockout every 2 years for a specific item. If 10
orders are placed for the item each year the service level desired is:
a. 80%
b. 85%
c. 90%
d. 95%
e. none of the above
17. Which of the following is the best statement?
a. stockouts do not cost money because customers are willing to wait
b. the cost of a stockout will vary depending on the market served, the customer,
and competition
c. stockouts can occur at any time in the inventory cycle
d. stockouts do not depend on the frequency of reorder
e. all the above statements are true
18. Which of the following systems are used to determine when the order point is reached?
I. Two-bin system.
II. Perpetual inventory system.
III. Periodic inventory system.
IV. Safety stock system.
a. all are used to tell when the order point is reached
b. I and II are used
c. I, II and III are used
d. I and III are used
e. II and III are used
19. ____________ is an inventory record system that keeps a continuous account of
transactions as they occur:
a. Perpetual inventory system
b. Periodic inventory system
c. Two-bin system
d. Safety stock system
e. All the above keep a continuous account
20. The demand placed on a factory or a central warehouse by distribution centers is
considered:
a. dependent
b. independent
c. uniform
d. all of the above
e. none of the above
21. An order system in which the order quantity is allowed to vary and the order cycle is fixed
is called the:
a. periodic review system
b. two-bin system
c. reorder point system
d. red-tag system
e. none of the above
22. If the lead time is 1 week, the review period 4 weeks, the average demand 100 units per
week and the safety stock is 50 units, the target level will be:
a. 150 units
b. 200 units
c. 250 units
d. 300 units
e. 550 units
147
23. Using the periodic review system the target level is:
a. forecast demand during lead time
b. forecast demand during the review period
c. the sum of a and b
d. the sum of a and b plus the safety stock
e. none of the above
24. If the lead time is 1 week, the review period 1 week, the average demand 100 units per
week and the safety stock is 50 units, the target level will be:
a. 150 units
b. 200 units
c. 250 units
d. 300 units
e. none of the above
25. Which of the following is correct?
a. order quantities are fixed in the periodic review system
b. the two-bin system is an example of the order point system
c. the safety stock does not depend upon the frequency of reorder
d. all of the above are true
e. none of the above is true
26. Which of the following statements is best?
I. In a pull system central supply determines what is needed by the distribution centers
II. In a push system all decisions are made by the distribution centers.
III. An advantage of a pull system is central coordination
a. I and II only are true
b. II and III only are true
c. I and III only are true
d. all the above are true
e. none of the above are true
27. Which of the following are objectives of distribution inventory management?
I. To provide the required level of customer service.
II. To minimize the costs of transportation and handling.
III. To always have enough of everything on hand so there are no stockouts.
IV. To be able to interact with the factory so as to minimize scheduling problems.
a. all the above are objectives
b. I, II and III
c. I, II and IV
d. I, III and IV
e. II, III and IV
148
28. The distribution inventory management system which forecasts when the various demands
will be made by the system on central supply is called:
a. pull system
b. push system
c. distribution requirements planning
d. inventory replenishment
e. order point system
29. If the on hand inventory is 40 units, the safety stock 20 units and the target level is 120
units then an order should be placed for:
a. 100 units
b. 80 units
c. 60 units
d. 40 units
e. 20 units
30. For a given item the lead time is 1 week, the on hand inventory is 50 units, demand is 20
units per week, safety stock is set at 3 weeks supply and the item is ordered every 2 weeks.
The order quantity should be:
a. 70 units
b. 60 units
c. 50 units
d. 40 units
e. 120 units
31. A company that keeps no safety stock can expect an average service level of
a. 0%
b. 15%
c. 50%
d. 85%
e. Safety stock does not affect the service level.
32. A company that has regular replenishments of small value items such as a grocery store
would use the _____________ system.
a. Order Point
b. Materials Requirements Planning
c. Push
d. Kanban
e. Periodic Review
33. Management has carefully measured the standard deviation of the demand of a product and
plans to use this to calculate the level of safety stock. If they keep one Standard Deviation of
safety stock then the expected service level should be approximately:
a. 15%
b. 35%
149
c. 85%
d. 90%
e. 100%
34. Lead time for a given item is 3 weeks and sales have been recorded in 1 week intervals. If
the Standard Deviation for the sales interval is 25 then the Standard Deviation for the lead time
should be approximately:
a. 25
b. 43
c. 75
d. 14
e. 8
35. For a given item controlled by a periodic review system the target level is 100 units. If there
are 40 units on the shelf and the lead time is 2 weeks then the order quantity should be:
a. 140 units
b. 120 units
c. 85 units
d. 60 units
e. 40 units
36. A product has a standard deviation of demand of 15. The safety stock for a service level of
98% would be approximately:
a. 15
b. 26
c. 31
d. 8
e. 14.7
Use the following information to answer the next two questions
Distribution Center A
Transit time: 1week
Order Quantity 200 units
Week
Gross Requirements
In Transit
Projected Available
Planned Order Release
1
150
200
2
125
75
37. There will be a planned order release(s) in weeks:
a. 2 and 3
b. 1 and 2
c. 1 and 3
150
3
125
4
100
5
150
d. 1, 2 and 3
e. Intransit inventory will cover all the orders.
38. What will be the projected available for periods 2, 3 and 4?
a. 200, 75, 175
b. 125, 0, 100
c. 75, 175, 25
d. 0, 75, 175
e. 125, 0, 75
39. Demand on Central Supply tends to be:
a. Smoothed out with planned orders.
b. Continuous
c. Monotonous
d. Lower than the Distribution Centers
e. Lumpy
40. The Gross Requirements on Central Supply are:
a. The sum of the planned order releases from the Distribution Centers
b. Taken from the Distribution Centers and offset by the lead time
c. The sum of the Gross Requirements for the Distribution Centers
d. The sum of the gross requirements for the DC’s offset by the lead time.
e. The same as the Intransit Inventory
151
Answers.
1 c
9 d
17 b
25 b
33 c
2 d
10 c
18 b
26 e
34 b
3 d
11 d
19 a
27 c
35 d
4 c
12 c
20 a
28 c
36 c
5 e
13 c
21 a
29 b
37 a
6
14
22
30
38
b
c
e
a
d
7 a
15 d
23 d
31 c
39 e
8 d
16 d
24 c
32 e
40 a
Chapter 12
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements are true about warehouse operation?
I. The major operating cost is labor.
II. Labor productivity depends on warehouse layout.
III. Capital costs are those of transport and space.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
2.
The operating costs of a warehouse will depend on:
I. The type of material handling equipment used.
II. The stock location system used.
III. The warehouse layout.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
3.
Which of the following is NOT a warehouse activity?
a. receiving
b. identifying
c. dispatching
d. order picking
e. transportation.
4.
Which of the following statements is best?
a. the complexity of a warehouse operation will depend on the number of SKUs
handled, the
quantities of each SKU and the number of orders received and filled
b. most of the activity in a warehouse is material handling
c. warehouse management is NOT concerned with space utilization and effective
use of labor
and equipment
d. a and b are true
e. b and c are true.
173
5.
Which of the following statements is best?
a. inventory is stored only on the floor
b. a pallet position is a position where pallets are stored
c. accessibility means being able to get at the goods with a minimum amount of
work
d. there is always a tradeoff between accessibility and cube utilization
e. none of the above statements is true.
6.
If items were stacked against a wall as shown, the cube utilization would be:
a.
b.
c.
d.
e.
100 percent
80 percent
20 percent
cannot be determined from the data given
none of the above.
7.
In a floating location system:
I. Goods are stored wherever there is appropriate space for them.
II. The same SKU may be stored in several locations at the same time.
III. An accurate and up-to-date information system is required.
IV. The system is appropriate for all warehouses.
a. all the above
b. I, II and III
c. I, II and IV
d. II, III and IV
e. none of the above is true.
8.
Which of the following statements is best?
a. among other things, warehousing labor productivity will depend on warehouse
layout
b. all warehouses need to keep accurate records of where each item is located
c. the space required in a warehouse will depend on the amount of labor used
d. all of the above are true
e. none of the above is true.
9.
Which of the following is a principle of merchandise location in the warehouse?
a. group functionally related items together
b. group physically similar items together
c. group fast-moving items together
d. all of the above
e. none of the above.
174
10. Which of the following is NOT a method of order picking?
a. area system
b. floating location system
c. zone system
d. multi-order system
e. all the above are methods of order picking.
11. Which of the following is NOT an advantage of point-of-use storage?
a. materials are readily accessible to users
b. material handling is reduced or eliminated
c. central storage costs are reduced
d. inventory record accuracy is easier to maintain
e. material is accessible at all times.
12. Among other things a good physical control and security of inventory will depend on:
I. A good part-numbering system.
II. A well-trained work force.
III. Free access to stock.
a. I and II
b. I and III
c. II and III
d. I only
e. II only.
13. Which of the following is the best statement?
a. a transaction occurs ONLY when goods are received or issued
b. the steps in a transaction system are: identify the goods, verify quantity, record
the transaction,
and physically execute the transaction
c. inventory is a tangible asset that is easy to lose track of unless properly
controlled
d. a and b are true
e. b and c are true.
14. Which of the following statements are true about inventory accuracy?
I. Inventory accuracy is essential for planning.
II. It is important to find the cause of record error.
III. Periodic audits of inventory will find the cause of record error.
a. all the above
b. I and II
c. I and III
d. II and III
e. none of the above.
175
15. Which of the following are causes of inventory record errors?
I. Unauthorized withdrawals of material.
II. Unsecured stockroom.
III. Audit capability.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
16. Which of the following statements is best?
I. It is not always practical to expect 100% inventory accuracy on all items.
II. Variance is the amount of variation between an inventory record and a physical
count.
III. Tolerance is the amount of permissible variation between an inventory record and a
physical count.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
17. The three factors in good preparation for a physical inventory are:
I. Housekeeping.
II. Identification.
III. Verification.
IV. Training.
a. I, II and III
b. I, II and IV
c. II, III and IV
d. I, III and IV
18. Which of the following techniques can be used to select items for cycle counting?
a. count all items once a year.
b. count only “A” and “B” items
c. base the frequency of count on annual dollar usage
d. count all items the same number of times a year
e. make a random audit of the items.
176
19. Which of the following are true when cycle counting inventory?
I. Inventory should be audited for count and location.
II. Cycle counts can be scheduled at regular intervals or special times.
II. A good time to cycle count an item is when an order is placed.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
20. Which of the following are advantages of cycle counting?
I. Timely detection and correction of problems.
II. Reduction of loss of production.
III. Making use of spare labor.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
21. Which of the following is NOT a basic stock location system?
a. group functionally related items together
b. locate all stock for fast access
c. group fast-moving items together
d. group physically similar items together
e. locate working stock and reserve stock separately.
22. In a cycle counting system:
a. all items are counted each month
b. item counts are determined by their ABC classification
c. the purpose is to correct inventory imbalances
d. count the A items first, then B’s then C’s
e. counts are done at the end of the business year
23. In a cycle counting system A items are usually:
I. expensive items
II. items which often experience imbalances
III. difficult to get items
a.
b.
c.
d
e.
I only
I and II only
I and III
III only
all of the above
177
24. Cycle counting uses which of the following methods?
a. ABC method
b. zone method
c. location audit method
d. a and b only
e. all of the above
25.
A simple method of determining when an item should be cycle counted is:
a. count when the item is ordered
b. count each time the item is picked
c. count each item once per month
d. count items which have been in storage for a given period of time
e. count items which don’t appear to be used often
26. The most important reason for cycle counting is to:
a. Correct inventory balances
b. Train warehouse staff in location methods
c. Correct inventory valuation
d. Find and correct errors
e. Keep stock in correct rotation
27. Which of the following is NOT an objective of a warehouse operation?
a. Provide timely customer service
b. Minimize cube utilization
c. Keep track of item location and quantity
d. Provide communication links with customers
e. Minimize warehouse effort
28. In a warehouse operation, which of the following is usually the largest capital cost?
a. Labour
b. Space
c. Materials handling equipment
d. Damage and loss of goods
e. Management overhead
29. What type of storage system is best suited for a Just in Time environment?
a. Zone method
b. Floating location
c. Central storage
d. Point-of-use storage
e. Bulk location storage
30. In which order picking and assembly method is the order picker NOT confined to one
location?
a. Multi-order system
b.
Zone system
c. Floating system
178
d. Area system
e. Mobile system
31. After picking the order and prior to shipment the goods are:
a. Sorted.
b. Put away.
c. Marshaled
d. Added to inventory
e. Dis-aggregated
179
Answers.
1 a
9 d
17 b
25 a
2 a
10 b
18 c
26 d
3 e
11 d
19 a
27 b
4 d
12 a
20 b
28 b
5 c
13 e
21 b
29 d
6
14
22
30
b
b
b
d
7 b
15 b
23 e
31 c
8 a
16 c
24 e
Chapter 13
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is best regarding distribution channels?
a. There are only two members in any distribution channel.
b. The transaction channel is concerned with transfer of ownership.
c. The distribution channel is concerned with the transfer of goods
d. all the above are true
e. b and c only are true.
2.
The particular way materials move will depend upon:
a. the channels of distribution the firm is using
b. types of markets served
c. characteristics of the product
d. all of the above
e. none of the above.
3.
Which of the following activities is NOT considered a function of physical distribution?
a. transportation
b. production control
c. distribution inventory maintenance
d. warehousing
e. order processing.
4.
The two criteria for establishing a particular physical distribution system are:
a. cost of the system and service level desired
b. service level and cost of carrying inventory
c. cost of transportation and cost of warehousing
d. cost of transportation and materials handling
e. cost of warehousing and cost of inventory.
5.
Which of the following statements is best?
a. the objective of distribution management is to provide the required level of
service at least
cost
b. there will be cost trade-off between the various activities in physical distribution
c. distribution can operate separately from marketing and production
d. a and b are true
e. b and c are true.
6.
Which of the following statements is best?
a. physical distribution provides a bridge between marketing and production
b. physical distribution contributes towards creating demand
c. replenishment orders to replace field warehouse stocks will not affect
production
d. a and b are true
e. b and c are true.
183
7.
Which of the following are elements in the cost of carriage?
I. Ways
II. Vehicles
III. Terminals
a. I, II and III
b. none of the above
c. I and II
d. I and III
e. II and III.
8.
Which of the following statements is true?
a. railways are best at moving small volumes of bulky goods over short distances
b. road transport is the least flexible of all the modes
c. air cargo should be used for fast service over short distances
d. all of the above are true
e. none of the above is true.
9.
A shipper moving expensive goods of small size from Boston to Seattle would likely use:
a. air
b. motor
c. rail
d. water
e. none of the above.
10. Considering the service desired and the relative cost of the item, which of the following
would you most likely ship by truck?
a. regular shipments of cut flowers
b. regular shipments of iron ore
c. regular shipments of grain
d. a and b above
e. b and c above.
11. Which of the following is true?
a. because of high capital cost, rail must have a large volume of traffic to justify
the expense
b. water transport requires low rates of energy per ton mile moved
c. operating costs per ton mile tend to be low for trucks
d. a and b above
e. b and c above.
184
12. Of the five modes of transportation, which one requires the lowest capital investment?
a. air
b. motor
c. rail
d. water
e. pipeline.
13. Which mode would provide the fastest service capability?
a. air
b. motor
c. rail
d. water.
14. Which of the following statements is FALSE?
a. pipeline capital costs are high in comparison with other modes
b. air cargo is generally used for low value bulky items
c. truck transport is suitable for distribution of small volume goods to a dispersed
market
d. water transport is slower than rail
e. rail transport is more suited to bulky low value items than road transport.
15. Which of the following is true?
a. the service capability of mode depends only on transit time
b. air transport is the most expensive mode
c. reliability of service and area covered are not important in selecting a mode
d. all of the above
e. b and c above.
16. Which mode would provide the slowest service capability?
a. air
b. motor
c. rail
d. water.
17. A contract carrier provides:
a. a service available to the general public
b. a scheduled service
c. published rates
d. all of the above
e. none of the above.
185
18. In which case(s) would you use common carriers instead of contract carriers?
a. regular delivery by a food chain to its stores
b. shipment to customers by a mail order house
c. regular shipment of paper from a mill to its warehouse
d. a and b above
e. a and c above.
19. Which of the following types of transportation will provide the best service capability?
a. common
b. contract
c. private
d. all of the above are equal
e. none of the above.
20. In which case(s) would you use contract carriers instead of common carriers?
a. regular delivery by a food chain to its stores
b. shipment to customers by a mail order house
c. regular shipment of paper from a mill to its warehouse
d. a and b above
e. a and c above.
21. Which mode of transportation would cost the MOST per ton mile?
a. air
b. motor (truck)
c. rail
d. water.
22. Which mode of transportation would cost the LEAST per ton mile?
a. air
b. motor (truck)
c. rail
d. water.
23. Which of the following are elements in transportation cost?
a. line haul
b. pickup and delivery
c. terminal handling
d. all of the above
e. none of the above.
186
24. Which of the following is correct?
a. consolidating shipments reduces billing and collecting costs
b. line-haul cost per hundredweight can be reduced by increasing the weight
shipped
c. shipping costs will be higher with common carriers than contract carriers
d. all of the above
e. none of the above.
25. A shipper wishing to reduce transportation costs will:
a. ship only in small quantities
b. ship to LTL lots
c. use trucks for all his shipments
d. all of the above
e. none of the above.
26. Consolidating shipments will reduce which of the following costs?
a. pickup and delivery
b. terminal handling
c. billing and collecting
d. all of the above
e. none of the above.
27. TOTAL line-haul costs will vary directly with:
a. the distance moved
b. the weight moved
c. the density of the goods
d. a and b above
e. b and c above.
28. The rate charged by a carrier will vary with:
I. The value of the goods.
II. The density of the goods.
III. The color of the goods.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
187
29. To decrease shipping costs a shipper will:
I. Increase the weight shipped.
II. Consolidate shipments.
III. Use a common carrier rather than contract carrier.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only.
30. Which of the following statements is true?
a. goods are stored in a distribution warehouse for long periods of time
b. a depository for documents is an example of a security warehouse
c. warehouses improve customer service
d. a and b
e. b and c.
31. Which of the following is NOT an important role of distribution centers?
a. transportation consolidation
b. in-transit inventory
c. product mixing
d. break-bulk storage
e. customer service.
32. The market boundary is:
a. a location beyond which a source cannot supply
b. the line between two or more supply sources where the laid-down cost is the
same
c. an agreed-upon boundary beyond which competition will not sell
d. the extent of a market area
e. a legal limitation placed on the delivery of goods.
33. Which of the following is a basic role of packaging in distribution?
I. Identify the product.
II. Contain and protect the product.
III. Contribute to physical distribution efficiency.
IV. Be an important part of the marketing program.
a. all the above
b. I, II and III only
c. I, II and IV only
d. II, III and IV only
e. none of the above.
188
34. The consolidation of several units into larger units for fewer handlings is called:
a. unitization
b. consolidation
c. cube utilization
d. packaging
e. materials handling.
35. Which of the following statements is best regarding materials handling in distribution
systems?
I. One objective of materials handling is to increase cube utilization.
II. Materials handling can increase the service level.
III. Gasoline powered industrial trucks are used indoors.
a. all the above are true
b. I and II are true
c. I and III are true
d. II and III are true
e. I only is true.
36. Which of the following statements is best?
a. materials handling costs are relatively constant as warehouses are added but
after a point will
start to rise
b. inventory costs remain constant as the number of warehouses increase
c. packaging costs increase as the number of warehouses increase
d. a and b are true
e. a and c are true.
37. As more warehouses are added to a physical distribution system we can expect the cost of:
a. TL and CL shipments to increase
b. LCL and LTL shipments to decrease
c. total transportation costs to decrease
d. all of the above
e. a and b above.
38. Which of the following is best?
a. as more warehouses are added to a system, TL and CL shipment costs increase
b. pickup and delivery costs are reduced by consolidation
c. water transportation requires less energy per ton mile moved than any other
mode
d. all of the above are best
e. none of the above is best.
189
39. Which of the following statements is true regarding goods in a reverse logistics system?
a. Volumes are equal to the forward logistics system.
b. They travel through the same terminals as the forward logistics system.
c. The goods tend to be small in quantity.
d. Little product information is required.
e. All of the above are true.
40. Reverse logistics:
a. calculates total delivery cost from customer to producer
b. is the return of goods
c. is easily automated
d. is always done by a company’s carrier selection
e. is best applied to small diverse markets
41. Which management area does NOT normally have transportation responsibility?
a. Logistics
b. Purchasing
c. Manufacturing
d. Marketing
c. All of the above normally have responsibility for transportation.
42 The distances in today’s supply chains produce:
b. Longer transit times.
c. Higher costs and more dispruptions
d. All of the above.
43. Transportation efficiencies promote:
a. Competition
b. Decreased capacity
c. KPIs
d. Slower services
e. Longer distances
44. The LTL costs a product moving through a supply chain are $1 per mile and there is a
warehouse 200 miles from Central supply. Truckload costs to the ware house are $50 and the
warehouse handling and storage costs are $10. The cost to ship the product to the warehouse $50.
The market boundary for this supply chain is:
a. 260 miles
b. 130 miles
c. 125 miles
d. 100 miles
e. 50 miles
45. Which of the following costs is NOT included in the total laid down cost of a product
shipped through a regional warehouse?
190
a.
b.
c.
d.
e.
Product cost.
Warehouse cost.
TL to warehouse
Warehousing cost.
Market boundary cost.
Chapter 13 Answers to multiple choice questions.
1 e
10 a
19 c
28 b
37 d
2 d
11 d
20 e
29 b
38 d
3 b
12 b
21 a
30 e
39 c
4 a
13 a
22 d
31 b
40 b
5 d
14 b
23 d
32 b
41 c
6
15
24
33
42
d
b
d
b
d
7 a
16 d
25 e
34 a
43 a
8 e
17 e
26 d
35 b
44 b
9 a
18 b
27 a
36 a
45 e
Chapter 14
MULTIPLE CHOICE QUESTIONS
1.
The process of making something less complex or less difficult is called:
a: standardization
b: simplification
c: specialization
d: any of the above
e: none of the above
2.
Which of the following statements regarding standardization is true?
I. All products made to a given specification will be interchangeable.
II. A range of standard specifications can be established so that the range covers the
majority of uses for the item.
III. Standardization results in a larger variety of parts.
a: I and II are true
b: II and III are true
c: I and III are true
d: I, II and III are true
e: none of the above is true
3.
The establishment of a common size for electric light sockets is an example of:
a: simplification
b: diversification
c: standardization
d: product focus
e: none of the above
4.
The concentration of effort in a given field of endeavor is called:
a: simplification
b: concentration
c: standardization
d: all the above
e: none of the above
5.
Specialization increases output and decreases costs by:
a: enabling labor to develop speed and dexterity
b: reducing setup time for each part
c: allowing a company to make a wide variety of different products
d: a and b above only
e: none of the above
196
6.
Which of the following is an advantage of product specialization?
a: it allows a large variety of finished goods to be made
b: it lets the firm pay only for the skills required
c: it allows labor to develop speed and dexterity
d: all the above
e: b and c above
7.
Standardization can reduce costs by:
a: reducing inventories
b: increasing lot sizes
c: allowing the use of general purpose equipment
d: all the above
e: a and b only
8.
Which of the following statements is true?
I. Serving similar customers with similar demand characteristics is an example of
market focus.
II. A company specializing in assembling cars is an example of process focus.
III. A focused factory specializes in a wide product mix.
a: I only is true
b: I and II only are true
c: I and III only are true
d: II and III only are true
e: all the above are true.
9.
Which of the following is an objective of product design?
a: to design a product that will function as expected in the marketplace
b: to design a product for minimum processing cost
c: to design a product that will have minimum design costs
d: all the above
e: a and b above
10. Tolerance is:
a: an allowable deviation from the desired result
b: specified by process designers
c: another word for variation
d: none of the above
e: a and b above
197
11. Which of the following are advantages of simultaneous engineering?
I. Time to market is reduced.
II. Avoids the need for marketing and design to work together.
III. Less communication is necessary.
a: I only is true
b: I and II only are true
c: I and III only are true
d: II and III only are true
e: all the above are true
12. Which of the following statements is/are true?
a: product design is a major factor in determining the cost of a product
b: product design is a major factor in the quality of a product
c: product design is a trial and error process
d: a and b above only
e: all the above are true
13. General-purpose equipment:
a: is designed for maximum flexibility
b: is used extensively in intermittent manufacturing
c: is designed and used to produce one or a few specific parts
d: a and b only are true
e: none of the above are true
14. Which of the following is a characteristic of special-purpose machinery?
a: it can perform a variety of operations on a variety of work pieces
b: capital costs are low compared to general purpose machinery
c: it generally produces better quality than general purpose machinery
d: all the above
e: none of the above
15. In designing a process, which of the following needs to be considered?
a: the volume to be produced
b: the degree of customer involvement
c: the desired quality level
d: all the above
e: none of the above
198
16. Which of the following statements is best about flow manufacturing?
I. Work stations are located in the sequence needed to make the product.
II. Work flows at a relatively constant rate.
III. They can produce a wide variety of different products.
IV. There is little buildup of inventory.
a. all the above
b. I, II and III are true
c. I, II and IV are true
d. II, III and IV are true
e. I, III and IV are true
17. Which of the following statements is best regarding intermittent manufacturing?
I. Goods are produced in lots or batches.
II. General purpose machinery is mostly used.
III. Each work station must be flexible.
a. none of the above are true
b. I, II and III are true
c. I, II and IV are true
d. II, III and IV are true
e. I, III and IV are true
18. In a particular process, the fixed costs are calculated at $40,000 and the variable costs at
$1.50 per unit. If 10,000 units are to be produced, what is the average cost per unit?
a: $1.50
b: $2.00
c: $4.00
d: $5.50
e: none of the above
19. Which of the following are reasons a firm would buy a product rather than make it in its
factory?
a: secrecy of design
b: utilizing idle workforce
c: providing known and competitive prices
d: all the above
e: a and b only
20. Which of the following is/are characteristic(s) of line-flow manufacturing?
a: requires less work-in-process inventory than intermittent manufacturing
b: is suitable for high-volume items
c: makes extensive use of special-purpose machinery
d: all the above
e: none of the above
199
21. What is the Cost Equalization Point for the two processes shown?
Process A
Process B
Fixed cost $30.00
$120.00
Variable cost $3.00
$2.00
a:
b:
c:
d:
e:
$90.00
90 units
100 units
120 units
none of the above
22. Intermittent manufacturing:
a: is particularly suited to the production of low-volume items
b: processes items in lots or batch
c: generally uses general purpose machinery
d: all the above
e: none of the above
23. The cost equalization point:
a: is used to show the potential profit of a process
b: shows the lot size where costs are minimized
c: is used to select the lowest cost of two or more alternative processes
d: is the point where unit cost of a process are at a minimum
e: uses all the above
24. Some purposes of continuous process improvement are:
a: the reduction of worker fatigue and effort without reduction of levels of output b:
the improvement of production processes and procedure
c: the improvement of factory, department, and work-station layout to improve
work flows
d: improvement of levels of worker safety
e: all the above
25. In selecting a project for method study, which of the following factors should be
considered?
a: human
b: economic
c: marketing
d: all the above
e. a and b only
200
26. Which of the following steps in method study ensures all elements of a job are studied?
a: install
b: select
c: record
d: examine
e: none of the above
27. A disadvantage of intermittent manufacturing is:
a. High inventories are required
b. High flexibility is required
c. No flexibility exists
d. Work place utilization is minimized
Answers.
1 b
2 a
10 a
11 a
19 c
20 d
3 c
12 d
21 b
4 e
13 d
22 d
5 a
14 c
23 c
6 e
15 d
24 e
7 e
16 c
25 e
8 a
17 b
26 c
9 e
18 d
27 a
Chapter 15
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is best regarding JIT?
I. It is a philosophy that relates to the way in which a manufacturing company
organizes and operates its business.
II. It is a set of techniques to make manufacturing more productive.
III. It is concerned with adding value to the product.
a. all the above are true
b. I and II are best
c. I and III are best
d. II and III are best
e. I only is best
2.
Which of the following statements is true?
I. Value starts in the marketplace.
II. Cost and value are the same thing.
III. Counting and storing add value to the product.
a. I and II
b. I and III
c. II and III
d. I
e. III
3.
If a company standardizes on the components that are used in different models it will:
a. reduce waste
b. reduce the variety of options offered to the customer
c. reduce the length of production runs
d. require the use of general-purpose machinery
4.
The ideal product is one that:
I. Meets or exceeds the needs of the customer.
II. Makes the best use of material.
III. Can be manufactured at least cost.
a. all the above
b. I and II only
c. II and III only
d. I only
5.
Overproduction causes waste by:
a. consuming unneeded raw materials and labor
b. creating excess inventory
c. causing confusion and hiding problems
d. a and b
e. all the above
205
6.
Which of the following are advantages of reducing inventory?
I. Engineering changes can be made sooner.
II. Quality can be improved.
III. Less space is needed in manufacturing.
IV. Lead time will be shorter.
a. all the above
b. only I, II and III
c. only I, II and IV
d. only II, III and IV
e. only III and IV
7.
Which of the following is NOT an advantage of work cells?
a. queue and lead time are reduced
b. production activity control is simplified
c. need for floor space is reduced
d. immediate feedback
e. maximum machine utilization
8.
Which of the following contribute to machine flexibility?
a. small general-purpose machinery
b. mobility of machines
c. automated high-capacity machines
d. a and b above
e. b and c above
9.
Reduced setup has which of the following advantages?
I. Reduced lot sizes.
II. Reduce lead time and queue.
III. Improved quality.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. I only
10. Which of the following statements is best about quality?
I. Quality can be inspected into a product.
II. Poor quality has no effect on work flow.
III. The process must be capable of producing the required quality consistently.
IV. Machinery must be maintained in excellent condition.
a. all the above
b. I and II only
c. II and III only
d. III and IV only
e. I and IV only
206
11. Which of the following concepts is needed to achieve uninterrupted material flow?
a. uniform plant loading
b. pull system
c. valid schedules
d. all the above are needed
e. a and b only are needed
12. Linearity in a JIT environment means:
a. produce small lot sizes
b. plan level schedules
c. each day achieve the plan, no more or less
d. eliminate all idle time
e. statistical process control
13. The buyer expects that a supplier will provide each of the following EXCEPT:
a. the quality needed at all times
b. information on competitors
c. frequent deliveries
d. improved quality and cost
14. Employee involvement in a JIT environment means:
I. Operators must take responsibility for improving the process.
II. Management must take more of a leadership role.
III. Staff must be trainers and assist line people.
a. all the above
b. I and II only
c. I and III only
d. II and III only
e. none of the above
15. Which of the following statements is best?
I. JIT and manufacturing planning and control cannot work together.
II. The JIT philosophy simplifies and reduces manufacturing planning and control
problems.
III. JIT requires a very good planning and control system.
a. all the above are true
b. I and II
c. I and III
d. II and III
e. none of the above
207
16. JIT will influence master production scheduling by:
a. reducing time fences and making the MPS more responsive to customer demand
b. making it possible to use daily time buckets
c. making the MPS more unstable
d. a and b only
e. b and c only
17. JIT practices will change the material requirements planning process by:
a. reducing the number of levels in the bill of material
b. making the bill of material more complex
c. increasing the need for offsetting
d. increasing the need for netting
e. eliminating the need for MRP
18. Which of the following is a benefit to the purchaser in supplier partnerships?
a. frequent deliveries on a just-in-time basis
b. better quality
c. improved performance and cost
d. all the above
e. a and b above only
19. A pull system is developed to provide which of the following?
a. an alternative to a classic MRP system
b. to provide only what is needed and when it is needed
c. can only be used when demand is constant and known
d. can only be used when demand is unknown
e. none of the above
20. The primary purpose for establishing small-group improvement activities among
production employees is:
a. direct labor efficiency improvement
b. improved scheduling
c. morale improvement
d. product improvement
e. work methods improvement
21. Bills of material used for MRP planning in a JIT environment are likely to have which of
the following characteristics?
a. fewer "phantom" or "blow-through" assemblies
b. increased complexity with regard to options
c. weekly time buckets
d. no need for where-used references
e. fewer levels in product structures
208
22. Each of the following contributes to machine flexibility EXCEPT:
a. ease of maintenance
b. mobility
c. variable speed
d. multipurpose
e. quick setup
23. The principle of cellular manufacturing is also known as:
a. work cell layout
b. clustered flow
c. functional organization
d. pull systems
e. continuous flow
Answers.
1 a
2 d
10 d
11 d
19 b
20 c
3 a
12 c
21 e
4 a
13 b
22 a
5 e
14 a
23 e
6 a
15 d
7 e
16 d
8 d
17 a
9 a
18 d
Chapter 16
MULTIPLE CHOICE QUESTIONS
1.
Which of the following statements is best?
a. the basic quality level of a product is specified by senior management
b. manufacturing is responsible for meeting at least the minimum specifications of
the product
c. the product designer builds the quality level into the product by design and
specification
d. all the above are true
e. a and b are true
2.
Which of the following is NOT a basic concept of total quality management?
a. customer focus
b. competitive supplier bidding
c. continuous process improvement
d. performance measures
e. involvement of the total workforce
3.
Which of the following statements regarding TQM is best?
I. TQM is organization wide and everyone's responsibility
II. Customer focus is not a requirement of TQM.
III. Only junior management is involved in TQM.
a. I only is true
b. II only is true
c. III only is true
d. I and II only are true
e. all the above are true
4.
Giving people the authority to make decisions and take action in their work areas is called
which of the following?
a. teamwork
b. organizational skills
c. empowerment
d. any of the above
e. none of the above
5.
Which of the following statements is best regarding performance measures?
I. They are not necessary for performance improvement.
II. They should be appropriate and useful.
III. They should be simple and easy for users to understand.
a. I and II only
b. I and III only
c. II and III only
d. all the above
212
6.
The cost of failure to control quality includes which of the following?
a. scrap, rework and spoilage
b. warranty charges
c. returned materials
d. all the above
e. none of the above
7.
The costs of controlling quality include which of the following?
a. prevention and appraisal costs
b. prevention and process control costs
c. appraisal and process control costs
d. any of the above
e. none of the above
8.
Which of the following is/are included in the cost of preventing poor quality?
a. operator training
b. final inspection
c. warranty charges
d. all the above are included in the costs of preventing poor quality
e. none of the above is included in the costs of preventing poor quality
9.
Which of the following statements is best regarding process variation?
I. All variation is due to chance.
II. Chance variation is inherent in the process.
III. Assignable variation is due to a specific cause.
a. I and II are true
b. I and III are true
c. II and III are true
d. I only is true
e. II only is true
10. Chance variation in a process can be caused by which of the following?
a. people
b. machinery
c. materials
d. all the above
e. none of the above
11. Which of the following can be used to describe the spread of the pattern of variability?
a. arithmetic mean
b. average
c. range
d. upper control limit
e. none of the above
213
12. Which of the following statements is true if the standard deviation of a process is .02 and
the average is 1?
a. about 68.3% of the output will be within 1± .02
b. the specification limits are ± .02
c. the upper control limit is 1.02
d. all the above are true
e. none of the above is true
13. The permissible limits of deviation from perfection is called which of the following?
a. spread
b. tolerance
c. control limits
d. process capability
14. Which of the following statements is best?
I. The capability of a process is related to the product specification limits.
II. Quality does not depend on the process used.
III. Defects can only be produced by a shift in the mean.
a. I only is true
b. I and III only are true
c. I and III only are true
d. all the above are true
e. none of the above is true
15. Which of the following statements is best if a process has a capability index (Cp) of 0.83?
a. the process is capable
b. the process is not capable
c. cannot tell whether the process is capable or not from the information
d. the product specifications are adequate
16. Which of the following statements is best if a process has a Cpk of between 1 and 1.33?
a. the process is not capable
b. the process is marginal
c. the process is capable
d. none of the above is true
17. The purpose of process control is to:
a. make sure the process does not stop
b. self-correct the process
c. to show when there is a high probability of an assignable cause for defect
d. to help designers develop the steps to automate a process
e. all the above
214
18. Which of the following statements is correct regarding control charts?
I. Specification limits are the same as control limits
II. If there is no assignable cause of variation the process is in control
III. A shift in the mean or average will show up on the X portion of the X and R chart
a. I and II are true
b. I and III are true
c. II and III are true
d. all the above are true
e. none of the above is true
19. Which of the following statements is true regarding sample inspection?
a. acceptance sampling requires 100% inspection
b. one reason to sample inspect is because of human error
c. the sample should be taken from the last parts produced because there is less
chance of error
d. there is no risk to either the consumer or producer
20. Which of the following statements is correct regarding acceptance sampling?
a. sample inspection is 100% accurate
b. the consumer's risk is that a lot with less than the acceptable number of defects
will be accepted
c. The producer's risk is that a batch with more than the acceptable number of
defects will be rejected
d. The cost of the sampling plan must be balanced against the consumer's risk and
the producer's risk
e. Lots are accepted when the consumer’s risk equals the producer’s risk
21. Under which of the following conditions is acceptance sampling appropriate?
a. testing of the product is destructive
b. time is available for 100% inspection
c. the sample can be taken from the top of the batch
d. the batch to be sampled is small
e. sampling is a natural part of the process
22. Which of the following statements is true concerning ISO 9000 standards?
I. They are intended to prevent nonconformities during all stages of inspection
II. There is only one ISO 9000 standard and it only applies to manufacturing.
III. ISO 9000 requires third party registration
a. I only is true
b. II only is true
c. III only is true
d. I and II are true
e. All of the above are true
215
23. ISO 9000:2000 is designed as:
a. a complete set of documentation to run any business
b. a process approach to management
c. a 12 step process
d. a method of sampling to prevent defects in any process
e. a set of technical standards to establish inspection limits
24. Which of the following statements is true concerning benchmarking?
a. it seeks improvement by analyzing the internal process
b. it studies only organizations in the same industry
c. it studies the "best in class" organizations
d. it is a process for determining performance measures for the shop floor
25. A House of Quality is used to:
a. Organize a company into departments focusing on quality.
b. Structure the engineering team.
c. Translate customer needs into design specifications.
d. Calculate specifications for desired cost reductions.
e. Calculate capability of a process to meet customer specifications.
26. The voice of the customer is:
a. The response heard from market promotions
b. An expression for customer wants.
c. The communication method used for network marketing.
d. A measure of capability of a process.
27. QFD is an acronym for:
a. Quality Function Deployment.
b. Quality For Design.
c. Quality Forms Development
d. Quality through Frequent Delivery
e. Queen For a Day
28. Six Sigma is a strategy designed to:
a. Reduce defects.
b. Measure the capability of the quality function.
c. Calculate productivity.
d. Increase the total output of processes.
e. None of the above.
29. Six Sigma:
a. Is only applicable if a process is repetitive.
b. Is an offshoot of the 5-S program.
c. Is an award sponsored by the Malcolm Baldridge Foundation.
d. Is about more than measurement of parts production.
e. a and b above only
216
30. The Top Six Sigma project managers are known as:
a. Black Belts
b. White Hats
c. Best-In-Class
d. World Class
e. Biero
31. The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards
showed an average length of 11.8 inches and a standard deviation of .1 inches. The C p for this
process is:
a. 5
b. 2
c. 2.33
d. 1.67
e. 1
32. A process has been sampled and it is found to have a Cpk on the upper side of 2.4 and a Cpk
on the lower side of 1.4. The Cp for this process would be:
a. 2
b. 1.9
c. 3.8
d. 4.8
e. The value of the process mean is needed to solve this problem.
33. The specification for the cut length of a board is 12 inches ± .5 inches. A sample of boards
showed an average length of 11.8 inches and a standard deviation of .1 inches. The Cpk for this
process is:
a. 7
b. 3
c. 2.33
d. 1
e. .42
34. Which of the following quality processes is part of QFD?
a. House of quality
b. Statistical Process Control
c. Lean
d. ISO:9000:2010
e. Quality for delivery
35. Which of
competition?
a.
b.
c.
the common quality decision making techniques compares products to the
Fishbone diagrams
Six Sigma
Quality Function Deployment
217
d. Statistical Process Control
e. Product sampling inspection
Answers.
1 e
10 d
19 b
28 a
2 b
11 c
20 d
29 d
3 a
12 a
21 a
30 a
4 c
13 b
22 c
31 d
5 c
14 a
23 b
32 b
6
15
24
33
d
b
c
d
7 a
16 b
25 c
34 a
8 a
17 c
26 b
35 c
9 c
18 c
27 a