Production and Operations Management :MCQ-3

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101. We identified several internal benefits of objectives, goals and a sense of mission. Which is not included?

  1. Basis of plans and decisions
  2. Unity of direction
  3. Basis to resolve disputes
  4. None of the above.

Correct answer: (C) Basis to resolve disputes

102. Identify the best definition of planning.

  1. The core activity of planners and planning departments.
  2. Setting an organisation's objectives and the means of reaching them.
  3. Devising ways of achieving the objectives of an organisation.
  4. An integrated process in which plans are formulated, carried out and controlled.

Correct answer: (B) Setting an organisation's objectives and the means of reaching them.

103. Business cycle, price trends, National Economy are ___________

  1. Micro Factors
  2. Macro Factors
  3. Controllable Factors
  4. All of these

Correct answer: (B) Macro Factors

104. Which is not a part of 5R's of buying?

  1. Right Quality
  2. Right Quantity
  3. Right Source
  4. None of the above

Correct answer: (D) None of the above

105. Buying of the annual requirements of an item during its season.

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying

Correct answer: (A) Seasonal Buying

106. __________________ is concerned with the branch of economics relating the behavior of principals and their agents.

  1. Financial management
  2. Profit maximization
  3. Agency theory
  4. Social responsibility

Correct answer: (C) Agency theory

107. Corporate governance success includes three key groups. Which of the following represents these three groups?

  1. Suppliers, managers, and customers.
  2. Board of Directors, executive officers, and common shareholders.
  3. Suppliers, employees, and customers.
  4. Common shareholders, managers, and employees.

Correct answer: (B) Board of Directors, executive officers, and common shareholders.

108. _________________ also called part lists or building lists is the document generated at the design stage.

  1. MRP (Material Requirement Planning)
  2. BOM (Bill of Materials)
  3. MPS (Master Production Schedule)
  4. None of these

Correct answer: (B) BOM (Bill of Materials)

109. Purchasing responsibilities can be divided into Buying, Clerical and __________________ division.

  1. Packing
  2. Traffic
  3. Record
  4. Follow up

Correct answer: (B) Traffic

110. ________________________ are the basic materials which have not undergone any conversion since their receipt from suppliers.

  1. WIP
  2. Raw Material
  3. Finished Parts
  4. Work Made Parts

Correct answer: (B) Raw Material

111. Which of the following statements is correct regarding profit maximization as the primary goal of the firm?

  1. Profit maximization considers the firm's risk level.
  2. Profit maximization will not lead to increasing short-term profits at the expense of lowering expected future profits.
  3. Profit maximization does consider the impact on individual shareholder's EPS.
  4. Profit maximization is concerned more with maximizing net income than the stock price.

Correct answer: (D) Profit maximization is concerned more with maximizing net income than the stock price.

112. __________________ is concerned with the maximization of a firm's stock price.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder welfare maximization
  4. EPS maximization

Correct answer: (A) Shareholder wealth maximization

113. ___________________ is the scientific technique for planning the ordering and usage of materials at various levels of production and for monitoring the stocks during these transaction.

  1. MPS
  2. MRP
  3. BOM
  4. None of these

Correct answer: (B) MRP

114. Procuring an item in staggering deliveries according to the delivery schedule finished to the supplier by the buyer.

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying
  5. Speculative Buying

Correct answer: (C) Scheduled Buying

115. Which of the following statements is not correct regarding earnings per share (EPS) maximization as the primary goal of the firm?

  1. EPS maximization ignores the firm's risk level.
  2. EPS maximization does not specify the timing or duration of expected EPS.
  3. EPS maximization naturally requires all earnings to be retained.
  4. EPS maximization is concerned with maximizing net income.

Correct answer: (D) EPS maximization is concerned with maximizing net income.

116. __________________ is the time that elapses between issuing replenishment order and receiving the material in stores.

  1. Replenishment time
  2. Lead time
  3. Idle time
  4. All of these

Correct answer: (B) Lead time

117. __________________ is concerned with the maximization of a firm's earnings after taxes.

  1. Shareholder wealth maximization
  2. Profit maximization
  3. Stakeholder maximization
  4. EPS maximization

Correct answer: (B) Profit maximization

118. The first activity of Purchasing cycle is

  1. Communicating requirement to the purchase
  2. Source Selection and development
  3. Recognizing the need for procurement
  4. Inspection of goods

Correct answer: (C) Recognizing the need for procurement

119. What is the most appropriate goal of the firm?

  1. Shareholder wealth maximization.
  2. Profit maximization.
  3. Stakeholder maximization.
  4. EPS maximization.

Correct answer: (A) Shareholder wealth maximization.

120. __________________ is the task of buying goods of right quality, in the right quantities, at the right time and at the right price.

  1. Supplying
  2. Purchasing
  3. Scrutinizing
  4. None of these

Correct answer: (B) Purchasing

121. Buying according to the requirements is called

  1. Seasonal Buying
  2. Hand to mouth buying
  3. Scheduled Buying
  4. Tender Buying

Correct answer: (B) Hand to mouth buying

122. Raw Materials and WIP can be classified under

  1. Indirect Material
  2. Direct Material
  3. Finished Material
  4. Standard Parts

Correct answer: (B) Direct Material

123. ___________________ establishes the overall production, workforce, and inventory levels.

  1. Production activity control
  2. Distribution requirements planning
  3. Master production schedule
  4. Sale and operations planning

Correct answer: (D) Sale and operations planning

124. The master production schedule requires all of the following input except

  1. Projected inventory levels
  2. Production quantities
  3. Forecasted demand
  4. All of the above are inputs into MSP.

Correct answer: (D) All of the above are inputs into MSP.

125. In a distribution requirements planning environment, forecasted demand at the plant level is equal to __________________ in the distribution centre level.

  1. Scheduled receipts
  2. Planned receipts
  3. Planned orders
  4. None of the above

Correct answer: (C) Planned orders

126. The difference between a gross material requirements plan (gross MRP) and a net material requirements plan (net MRP) is

  1. The net MRP includes consideration of the inventory on hand, whereas the gross MRP does not.
  2. The gross MRP doesn't take taxes into account, whereas the net MRP includes the tax considerations.
  3. The gross MRP may not be computerized, but the net MRP must be computerized.
  4. The gross MRP includes consideration of the inventory on hand, whereas the net MRP does not.

Correct answer: (A) The net MRP includes consideration of the inventory on hand, whereas the gross MRP does not.

127. An MRP system that provides feedback to the capacity plan, master production schedule, and production plans is called

  1. System nervousness.
  2. Closed-loop mrp.
  3. Lot-sizing.
  4. Load report.

Correct answer: (B) Closed-loop mrp.

128. ___________________ determines when specific products will be produced, when specific customer orders will be fulfilled, and what capabilities remain available to satisfy unexpected demand.

  1. Sale and operations planning
  2. Material requirements planning
  3. Distribution requirements planning
  4. Master production schedule

Correct answer: (D) Master production schedule

129. __________________ is the amount of new orders necessary to support production of the required output in the next higher level in the bill of materials.

  1. Scheduled receipts
  2. Available to promise
  3. Projected ending inventory
  4. Planning horizon

Correct answer: (A) Scheduled receipts

130. __________________ allows a segment of the master schedule to be designated as "not to be rescheduled."

  1. Pegging
  2. Regenerative MRP
  3. Time fence
  4. System nervousness

Correct answer: (C) Time fence

131. __________________ calculates the timing and quantities of material orders needed to support the master schedule.

  1. Sale and operations planning
  2. Distribution requirements planning
  3. Material requirements planning
  4. Master production schedule

Correct answer: (C) Material requirements planning

132. Which of the following lot-sizing techniques is likely to prove the most complex to use?

  1. Part period balancing (PPB)
  2. The Wagner-Whitin algorithm
  3. Economic order quantity (EOQ)
  4. Lot-for-lot

Correct answer: (B) The Wagner-Whitin algorithm

133. __________________ is a time phased approach to managing the physical distribution environment with dependent demand logic.

  1. Master production schedule
  2. Distribution requirements planning
  3. Sale and operations planning
  4. Material requirements planning

Correct answer: (B) Distribution requirements planning

134. The list of quantities of components, ingredients, and materials required to produce a product is the

  1. Bill-of-materials.
  2. Engineering change notice.
  3. Purchase order.
  4. Master schedule.

Correct answer: (A) Bill-of-materials.

135. When a bill-of-materials is used in order to assign an artificial parent to a bill-of-materials, it is usually called a

  1. Phantom bill-of-materials.
  2. Planning bill-of-materials.
  3. Modular bill-of-materials.
  4. Pick list.

Correct answer: (B) Planning bill-of-materials.

136. __________________ can be seen as the amount of new inventory created by production.

  1. Scheduled receipts
  2. Gross requirements
  3. Planning horizon
  4. Available to promise

Correct answer: (D) Available to promise

137. A lot-sizing technique that generates exactly what was required to meet the plan is

  1. The Wagner-Whitin algorithm.
  2. Economic order quantity.
  3. Lot-for-lot.
  4. Part period balancing.

Correct answer: (C) Lot-for-lot.

138. The operations manager has several tools available to deal with MRP system nervousness. Those tools are

  1. Pseudo bills and kits.
  2. Time fences and pegging.
  3. Buckets with back flush.
  4. Net and gross requirements.

Correct answer: (B) Time fences and pegging.

139. __________________ is the amount of materials necessary to support production of the required output in the next higher level in the bill of materials.

  1. Planning horizon
  2. Available to promise
  3. Net requirements
  4. Gross requirements

Correct answer: (D) Gross requirements

140. Breaking up the order and running part of it ahead of schedule is known as

  1. Operations splitting.
  2. Lot splitting.
  3. Pegging.
  4. Overlapping.

Correct answer: (B) Lot splitting.

141. A phantom bill-of-materials is a bill-of-materials developed for

  1. A subassembly that exists only temporarily.
  2. A final product for which production is to be discontinued.
  3. The purpose of grouping subassemblies when we wish to issue "kits" for later use.
  4. A module that is a major component of a final product.

Correct answer: (A) A subassembly that exists only temporarily.

142. The master production schedule is the schedule of production for what level product/material?

  1. Level 0
  2. Level 1
  3. Level 2
  4. Level 3

Correct answer: (A) Level 0

143. Managers can use work standards in which of the following ways?

  1. Scheduling
  2. Motivating workers
  3. Capacity planning
  4. All of the above

Correct answer: (A) Scheduling

144. Work-sample test

  1. Often use in-tray or in-basket exercises for selecting shop floor workers
  2. Normally make use of many different complementary predictors
  3. Require candidates to conduct a sample of the work required for the job
  4. Do not necessarily have any obvious link with the job in question

Correct answer: (C) Require candidates to conduct a sample of the work required for the job

145. Formal methods of work measurement exclude which of the following?

  1. Time study method
  2. Work sampling method
  3. Predetermined data approach
  4. Systems approach

Correct answer: (D) Systems approach

146. The work measurement method that is not usually used for setting standards for repetitive,'well-defined jobs is:

  1. The elemental standard data approach
  2. The predetermined data approach
  3. The time study method
  4. The work sampling method

Correct answer: (D) The work sampling method

147. Looking at socio-technical systems, which job design principle is not important?

  1. Skill variety
  2. Feedback
  3. Task autonomy
  4. None of the above (all are important)

Correct answer: (D) None of the above (all are important)

148. Which of the following is not a major personnel selection method?

  1. Graphology
  2. References
  3. Bio-data
  4. Focus groups

Correct answer: (D) Focus groups

149. Which is not an advantage of specialization?

  1. Upstream and downstream quality control
  2. Rapid training
  3. Ease of recruiting
  4. No education required

Correct answer: (A) Upstream and downstream quality control

150. Which of the following are reasons why an allowance should be added to determine the standard time?

  1. Unavoidable delay
  2. Rest period
  3. Fatigue
  4. All of the above

Correct answer: (D) All of the above

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