Production and Operations Management Online MCQ Set 11

QN01. Which of the following is not a trend in job design?

1. Temporary Workers
2. 9 to 5 scheduling
3. Alternative workplaces (telecommuting, shared offices, etc)
4. Automation of manual work

Answer

(B)9 to 5 scheduling

QN02. Work measurement techniques include all of the following except:

1. On the job training
2. Time study
3. Work sampling
4. Predetermined motion-time data systems

Answer

(A)On the job training

QN03. One use of inventory is

1. To ensure that item cost is maximized.
2. To tightly link production and distribution processes.
3. To provide a hedge against inflation.
4. To tightly link a firm's production with its customers' demand.

Answer

(A)To ensure that item cost is maximized.

QN04. The appropriate level of safety stock is typically determined by

1. Minimizing expected stockout cost.
2. Taking the square root of the economic order quantity.
3. Choosing the level of safety stock that assures a given service level.
4. Carrying sufficient safety stock so as to eliminate all stockouts.

Answer

(C)Choosing the level of safety stock that assures a given service level.

QN05. Inventory carried for the purpose of providing flexibility to each decision-making unit to’manage its operations independently is known as

1. Safety inventory
2. Cycle inventory
3. Seasonal inventory
4. Decoupling inventory

Answer

(D)Decoupling inventory

QN06. Higher number of stock points required for risk pooling results in higher savings in terms of

1. Decoupling inventory
2. Pipeline inventory
3. Cycle inventory
4. Safety inventory

Answer

(C)Cycle inventory

QN07. A system that triggers ordering on a uniform time basis is called a

1. Fixed-quantity system.
2. Reorder point system.
3. Fixed-period system.
4. EOQ.

Answer

(C)Fixed-period system.

QN08. Extra units that are held in inventory to reduce stockouts are called

1. Just-in-time inventory.
2. Reorder point.
3. Demand variance.
4. Safety stock.

Answer

(D)Safety stock.

QN09. ABC analysis divides an organization's on-hand inventory into three classes based upon

1. Annual demand.
2. The number of units on hand.
3. Unit price.
4. Annual dollar volume.

Answer

(D)Annual dollar volume.

QN10. In the probabilistic model, increasing the service level will

1. Cannot be determined.
2. Have no impact on the cost of the inventory policy.
3. Increase the cost of the inventory policy.
4. Reduce the cost of the inventory policy.

Answer

(C)Increase the cost of the inventory policy.

QN11. Cycle counting

1. Provides a measure of inventory turnover.
2. Assumes that all inventory records must be verified with the same frequency.
3. Cannot be done in an independent demand situation.
4. Is a process by which inventory records are verified.

Answer

(D)Is a process by which inventory records are verified.

QN12. Policies based on ABC analysis might include investing

1. More in inventory security for C items.
2. More in supplier development for A items.
3. The most time and effort verifying the accuracy of records for B items.
4. Extra care in forecasting for C items.

Answer

(B)More in supplier development for A items.

QN13. Higher demand uncertainty provides higher savings by pooling which of the following inventory?

1. Seasonal inventory
2. Pipeline inventory
3. Safety inventory
4. Decoupling inventory

Answer

(C)Safety inventory

QN14. The two most important inventory-based questions answered by the typical inventory model are

1. When to place an order and what is the cost of the order.
2. When to place an order and how many of an item to order.
3. How many of an item to order and with whom the order should be placed.
4. How many of an item to order and what is the cost of this order.

Answer

(B)When to place an order and how many of an item to order.

QN15. Cycle inventory helps in

1. Taking care of any special event that does not occur on a regular basis
2. Taking care of uncertainty in demand and supply of products/components
3. Finding out the amount of stock required during a finite period in order to move the materials from one location to another
4. Taking advantage of economies of scale and reducing cost within the supply chain

Answer

(D)Taking advantage of economies of scale and reducing cost within the supply chain

QN16. Centralized system will provide benefits for the items which

1. Are fast-moving
2. Are slow moving and have high demand variability
3. Have low demand variability
4. Have high demand variability

Answer

(B)Are slow moving and have high demand variability

QN17. The difference(s) between the basic EOQ model and the production order quantity model is (are) that

1. The production order quantity model does not require the assumption of known, constant demand.
2. There are no holding costs in the production order quantity model.
3. The production order quantity model does not require the assumption of instantaneous delivery.
4. The eoq model does not require the assumption of known, constant lead time.

Answer

(C)The production order quantity model does not require the assumption of instantaneous delivery.

QN18. The inventory which is dependent on alternative modes of transportation is known as

1. Safety inventory
2. Pipeline inventory
3. Decoupling inventory
4. Seasonal inventory

Answer

(B)Pipeline inventory

QN19. Inventory record accuracy would be decreased by

1. Abc analysis.
2. Increasing stockroom accessibility.
3. Cycle counting.
4. reorder points.

Answer

(B)Increasing stockroom accessibility.

QN20. A system that keeps track of each withdrawal or addition to inventory continuously is

1. A perpetual inventory system.
2. A continuous inventory system.
3. A fixed period system.
4. A fixed quantity system.

Answer

(A)A perpetual inventory system.

QN21. The best strategy of minimizing the amount of safety inventory to be kept in a store without hurting the level of customer service is

1. Minimizing the uncertainty inherent in supply
2. Minimizing the cycle service level
3. Reducing the supply lead time
4. Minimizing the uncertainty inherent in demand

Answer

(A)Minimizing the uncertainty inherent in supply

QN22. Which of the following is NOT a type of inventory?

1. MRP
2. Finished goods
3. Raw material
4. Work-in-process

Answer

(A)MRP

QN23. TQM refers to __________________

1. Total quantity management
2. Total quality management
3. Total quality marketing
4. Total quotient management
5. Total quantity marketing

Answer

(B)Total quality management

QN24. Through __________________ marketing statisticians can extract useful information about individuals, trends, and segments from the mass of data.

1. CRM
2. Prospecting
3. Datamining
4. Calculus

Answer

(C)Datamining

QN25. Which of the following is not one of the major categories of costs associated with quality?

1. Appraisal costs
2. Internal failures
3. External failures
4. None of the above, they are all major categories of costs associated with quality

Answer

(D)None of the above, they are all major categories of costs associated with quality

QN26. A successful TQM program incorporates all of the following except

1. Continuous improvement
2. Employment involvement
3. Benchmarking
4. Centralized decision making authority

Answer

(D)Centralized decision making authority

QN27. According to the manufacturing-based definition of quality,

1. Quality is the degree of excellence at an acceptable price and the control of variability at an
2. Acceptable cost
3. Quality depends on how well the product fits patterns of consumer preferences
4. Even though quality cannot be defined, you know what it is
5. Quality is the degree to which a specific product conforms to standards

Answer

(D)Even though quality cannot be defined, you know what it is

QN28. Customer churn refers to ________________

1. Customer defection
2. Customer mix
3. Customer anxiety
4. Customer loyalty

Answer

(A)Four

QN29. Companies can build interest and enthusiasm by using databases to remember customer preferences. This strategy helps to __________________.

1. Deepen customer loyalty
2. Reactivate dormant customers
3. Avoid serious customer mistakes
4. Identify prospects

Answer

(A)Deepen customer loyalty

QN30. Inspection, scrap, and repair are examples of

1. Internal costs
2. External costs
3. Costs of dissatisfaction
4. Societal costs

Answer

(A)Internal costs

QN31. The 20-80 rule states __________________

1. The top 80 percent of customers generate 20 percent of the company's profits
2. The bottom 80 percent of customers generate 80 percent of the company's profits while the bottom 20 percent of customers generate 20 percent of the profits
3. The top 20 percent of customers generate 80 percent of the company's profits
4. The bottom 20 percent of customers generate 80 percent of the company's profits

Answer

(C)The top 20 percent of customers generate 80 percent of the company's profits

QN32. One problem that can deter a firm from effectively using CRM is __________________

1. Having the resources to manage and train employees effectively
2. Not all customers want a relationship with the company
3. The expense of building and maintaining a customer database
4. All of the above

Answer

(D)All of the above

QN33. Which of the following is true about ISO 14000 certification?

1. It is a prerequisite for ISO 9000 certification
2. It indicates a higher level of adherence to standards than ISO 9000
3. It is only sought by companies exporting their goods
4. It deals with environmental management

Answer

(D)It deals with environmental management

QN34. __________________ is when a company works continuously with its large customers to help improve their’performance.

1. Basic marketing
2. Reactive marketing
3. Proactive marketing
4. Partnership marketing

Answer

(D)Partnership marketing

QN35. __________________ is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives.

1. Customer cost
2. Value delivery system
3. Value proposition
4. Customer perceived value

Answer

(D)Customer perceived value

QN36. Total Quality Management emphasizes

1. The responsibility of the Quality Control staff to identify and solve all quality-related problems
2. A commitment to quality that goes beyond internal company issues to suppliers and customers
3. A system where strong managers are the only decision makers
4. A process where mostly statisticians get involved

Answer

(B)A commitment to quality that goes beyond internal company issues to suppliers and customers

QN37. Frequency programs (FP's) are designed to provide rewards to __________________

1. Customers who need to be encouraged to buy more frequently
2. Customers who buy frequently and in substantial amounts
3. Customers who buy frequently but in small amounts
4. Customers who buy infrequently in large amounts

Answer

(B)Customers who buy frequently and in substantial amounts

QN38. All of the following costs are likely to decrease as a result of better quality except

1. Customer dissatisfaction costs
2. Inspection costs
3. Warranty and service costs
4. Maintenance costs

Answer

(D)Maintenance costs

QN39. __________________ is a company's ability to perform in one or more ways that competitors cannot or will not match.

1. Customer advantage
2. Customer relationship advantage
3. Customer lifetime value
4. Competitive advantage

Answer

(D)Competitive advantage

QN40. "Quality is defined by the customer" is

1. An unrealistic definition of quality
2. A user-based definition of quality
3. A manufacturing-based definition of quality
4. A product-based definition of quality
5. The definition proposed by the American Society for Quality Control

Answer

(B)A user-based definition of quality